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Oral Answers to Questions
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Nick Smith (Blaenau Gwent) (Lab)
1. What assessment he has made of the potential effect on levels of voter registration of not creating a legal offence of failure to return an individual electoral registration request.
The Deputy Prime Minister (Mr Nick Clegg)
Before turning to the question, I am sure that the whole House will wish to join me in echoing the tribute paid by you, Mr Speaker, to Alan Keen, the Member for Feltham and Heston, for his 19 years of service as a Member of this House.
We need to establish some facts about what is and what is not changing in electoral registration. At present, it is not an offence not to register to vote, and that will not change. It is an offence not to provide information when requested to give it, and that will not change either. The civic duty to register to vote, which everybody recognises, remains, and that will not change. There are suggestions, including from the Select Committee on Political and Constitutional Reform, to create a new offence—one that does not currently exist—of failing to apply to register to vote. Of course the Government will listen to that, but I would warn against thinking that the only solution is criminalising people, because only 144 people were prosecuted in the last year under the present offences. There are a whole lot of other things that we need to get on with to ensure that we transfer people on to the individual electoral registration system over the coming years, which is exactly what we plan to do.
Nick Smith
A high level of voter registration is fundamental to our democracy. Credit companies are concerned that if the electoral register is reduced, it will be more difficult to carry out credit worthiness checks. Have the Government considered data sharing with the credit companies, which have excellent personal address information, to increase voter registration in our democracy?
The Deputy Prime Minister
I certainly agree with the principle that we should try to use data sets to compare the data that electoral registration officers hold with the data held by other people in easily accessible databases, and that is exactly what we are piloting at the moment. However, I do not think that I can do any better than to quote the Electoral Commission, which said:
“We would not want to see a move away from the current approach—where electoral registration, though not compulsory, is regarded as an important civic duty”.
That is precisely what we are doing.
Mr Philip Hollobone (Kettering) (Con)
If we are to have a strong and thriving democracy, should it not be a civic duty for everybody to be obliged to register to vote? Whether or not they actually vote, they should at least have a duty to register.
The Deputy Prime Minister
As I said earlier, it is a civic duty, and that will not change, and the offence of not providing information when requested to provide it will remain as well. I just think we need to pause and reflect on whether we think it necessary, on top of that, to create a new criminal offence of failing to apply to register to vote. Those who feel that it should be up to individual citizens whether or not they vote, should pause and reflect on whether it is necessary to criminalise people to get them on the register in the first place. I am not sure, bluntly, whether that is the right way forward.
Mr Wayne David (Caerphilly) (Lab)
The Deputy Prime Minister has quoted the Electoral Commission, but when the Government publish their Bill on individual electoral registration will he take on board its advice and publish details on the implementation of IER and the necessary secondary legislation at the same time?
The Deputy Prime Minister
Of course we are considering that very carefully, and of course we will wish to prove to this House that we have thought through all the necessary steps, such that each and every voter is properly approached, initially through individual contacts or approaches to households. People will canvass door-to-door to ensure that those who have moved or not yet registered have the opportunity to do so. As we debated last time at Deputy Prime Minister’s questions, the Electoral Commission had concerns about the opt-out system. That was its main concern, and I think we have provided satisfaction on it.
Mr Edward Leigh (Gainsborough) (Con)
2. What recent discussions he has had on changes to the law on succession to the throne; and if he will make a statement.
The Deputy Prime Minister (Mr Nick Clegg)
As my right hon. Friend the Prime Minister announced on 28 October, the 16 Commonwealth realms have agreed in principle that we should modernise the Act of Settlement with regard to the rules of royal succession. That means that if the Duke and Duchess of Cambridge were to have a first-born daughter, she would eventually become Queen of our country. In addition, we will remove the barrier to those who marry Catholics retaining their position in the line of succession, thus repealing an explicit and unique discrimination against the Roman Catholic religion.
Mr Leigh
After many years of campaigning, I thank the Government most warmly for finally grasping the nettle and removing this unique discrimination against Catholics. Does the Deputy Prime Minister agree, however, that this issue and the wider issues have now moved beyond statute? The fact is that the monarch gave up appointing Anglican bishops in the 18th century, and the Prime Minister has recently given up that power. In the future, can we ever prevent anyone from holding a post that they are born into, simply because of their religion or beliefs?
The Deputy Prime Minister
As I have explained, this is a significant step. I understand that there is a perfectly legitimate debate to be had about whether there should be other reforms, but all the Commonwealth realms must move as a convoy on this. We must all translate it into exactly the same legislation, which is what we will be working on in the months ahead. It is important to welcome this step, as my hon. Friend has done. It removes a unique discrimination against people of the Roman Catholic religion, and we must ensure that we implement it in full.
Mr Nigel Dodds (Belfast North) (DUP)
May I ask what discussions have taken place with the devolved Administrations on these changes, which affect all parts of the United Kingdom of Great Britain and Northern Ireland? If the Deputy Prime Minister has not already held any such discussions, what plans does he have to do so?
The Deputy Prime Minister
I spoke to the First Minister shortly before the announcement was made at the Commonwealth meeting in Perth. He is also reflecting on whether there should be other, wider changes, but he welcomed this as a significant step, in and of itself.
Lorely Burt (Solihull) (LD)
May I express my delight that the coalition Government have at last ensured fairness and equality in succession to the throne? Does the Deputy Prime Minister share my disappointment, however, that although I and others raised this matter many times under the previous Government, they put it in into the “too difficult” box for 13 years?
The Deputy Prime Minister
I certainly think that most reasonable people would say that, in this day and age, it cannot be right to have rules that discriminate on the basis of gender or religion. This is clearly a sensitive area, however. I have always been explicit in my own view, which I have expressed publicly on several occasions over the years, that we needed to look at these rules. I am delighted that we have now been able to mobilise a consensus among all the Commonwealth realms, so that we can now put this into practice.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
3. What discussions he has had with local authorities on (a) voter registration and (b) maximising participation in local and national elections.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
We have been having regular discussions with local authority registration officers and those involved in our electoral data-matching pilots and the smooth implementation of individual registration. Everyone in the House has a responsibility to encourage people to participate in elections. Mr Speaker, you will know that the Electoral Commission has a particular role to play in that work, which the Government find very valuable and which I am sure is supported by every Member of the House.
Mr Sheerman
Surely the Minister realises that a party that seems to believe in the big society and in localism would want participation to increase. Local authorities are deeply unhappy about the effect that the changes that are being mooted will have on local participation. Is he aware that the Deputy Prime Minister’s constituency—the wealthiest constituency in the north of England—could manage only a 73% turnout? What are we going to do about the others?
Mr Harper
The hon. Gentleman is confusing two things. Clearly, the Government want to ensure that the electoral register is complete and accurate. As regards the turnout for elections, however, it is the responsibility of all of us in the House to ensure that we provide people with compelling reasons to vote. For example, we are taking the necessary steps to clear up the mess left for us by the Labour party.
Sir Paul Beresford (Mole Valley) (Con)
In seeking to maximise participation in elections, what action is the Minister taking, and considering, to counter voter fraud and what I call the farming of votes?
Emily Thornberry (Islington South and Finsbury) (Lab)
How many allegations of fraud were there last year?
Mr Harper
That measure was supported by all three parties in the House, despite what the hon. Lady might say from a sedentary position. The previous Government legislated to introduce individual registration in order to move away from the household-based system. In this way, we will have a register that is more complete and, importantly, more accurate.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
4. What recent representations he has received on progress towards the objectives of the coalition agreement.
The Deputy Prime Minister (Mr Nick Clegg)
The coalition agreement underpins all the work of the Government and is the subject of many ongoing representations to Ministers.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does my right hon. Friend agree that creating jobs in the economy is a vital objective of the coalition and that the private sector is indeed creating those jobs? Do the Government believe that the present system of tribunals to adjudicate on unfair dismissal is encouraging firms to take on new people or is it discouraging job creation in the economy?
The Deputy Prime Minister
As my hon. Friend will know, we are looking at all the measures that we think hinder growth and job creation. We have already announced a significant change in the tribunal system such that the qualifying period is extended from one year to two years. We have also announced that we will explore the establishment of what are called “protected conversations” so that employers and employees can talk, as the name implies, in a protected way about the performance of those employees, which employers have demanded for a long time. They have welcomed it because they think it will help them create more jobs.
Lindsay Roy (Glenrothes) (Lab)
The Deputy Prime Minister is appointing seven new special advisers. Some of his Conservative colleagues have described them as “spies”. Will the right hon. Gentleman tell us how those appointments match the coalition agreement’s proposal to limit the number of special advisers?
The Deputy Prime Minister
As with any new Government, both parties in the coalition Government—we have not had a coalition Government in a long time—have had to adjust the way in which they are supported in government to make sure that we deliver in full on the coalition agreement to which I referred.
Kevin Brennan (Cardiff West) (Lab)
5. What assessment he has made of the effect of introducing individual electoral registration on the completeness of the electoral register.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
The hon. Gentleman will know from listening to previous answers that we are taking a number of steps to ensure the completeness of the register, learning from the experience of the introduction of individual registration in Northern Ireland—including, for example, the carry forward of electors for a year—and looking at the data matching pilots to see whether they will be successful.
Kevin Brennan
Individual voter registration is worth pursuing only if, as well as making the register more accurate, it makes it more complete. I warned the Minister about this more than a year ago. Does he not realise that by combining this measure with a voter suppression policy such as not requiring people to collaborate with the electoral register, he is basically participating in the Florida-isation of UK electoral registers?
Mr Harper
That was not up to the hon. Gentleman’s usual standard—no, on reflection, I am afraid that it was. I made it clear from this Dispatch Box when I announced the policy that we are just as focused on completeness as on accuracy. As the Deputy Prime Minister set out, we are listening carefully to the responses to our consultation and to what was said by the Political and Constitutional Reform Committee, and we will bring forward our proposals in due course.
Dan Rogerson (North Cornwall) (LD)
The Minister will be aware that councils such as Cornwall are taking action to deal with multiple property owners being on the register in several places. I welcome the Government’s change of view on the 10% discount on council tax, but as that is one way of encouraging people to register their ownership of a second home, making it easier to cross-match data, has the Minister considered other ways in which councils could fulfil their duty of ensuring that the register is accurate?
Mr Harper
I have not considered any proposals arising from our council tax moves. The hon. Gentleman and I have had conversations about this matter, and I know that his electoral registration office has been making sure that the law is applied fairly but firmly in registering people who reside in Cornwall, thus ensuring that it is indeed more accurate as well as more complete.
Julie Elliott (Sunderland Central) (Lab)
6. What assessment he has made of the potential effect on levels of voter registration of not creating a legal offence of failure to return an individual electoral registration request.
The Deputy Prime Minister (Mr Nick Clegg)
As I have explained, we believe that individual electoral registration is the right thing to do. Her party does as well, as it was in her party’s manifesto. Preparations were made under the previous Government to introduce it. We brought it forward slightly and, as the Minister and I have explained, we are taking meticulous steps to ensure that it does not lead to a decline in overall rates of registration.
Julie Elliott
The Electoral Commissioner says that with these changes more than 10 million people will fall off the register. How will the Deputy Prime Minister protect people in urban areas such as mine of Sunderland Central from disfranchisement?
The Deputy Prime Minister
The hon. Lady must be careful not to misrepresent what the Electoral Commissioner said. It did not say that this system will lead to a drop-off on that scale. [Interruption.] No, the Electoral Commissioner clarified the point in subsequent publications. The Electoral Commission said:
“We would not want to see a move away from the current approach—where electoral registration though not compulsory is regarded as an important civic duty”.
We are maintaining that civic duty; we are maintaining the offence of failing to provide that information when asked for it; and we are seeking to address the Electoral Commission’s specific concern about the opt-out system.
Karl MᶜCartney (Lincoln) (Con)
7. What plans he has to reform the funding of political parties.
The Deputy Prime Minister (Mr Nick Clegg)
I consider reform of party funding to be very important in and of itself, and we made a clear commitment to it in the coalition agreement. I look forward to the contribution of the Committee on Standards in Public Life to the debate when it publishes its report shortly. It is immensely important for us to clear this up, because it has affected all political parties negatively, but it would not be right to ask our hard-pressed taxpayers to pay more to political parties at a time when they are having to deal with so many cuts and savings elsewhere. I should like to proceed with as much cross-party consensus as possible, and I am keen to work towards that aim, but I repeat that no one should doubt the determination of this coalition Government to deliver reform in this area.
Karl MᶜCartney
I thank the right hon. Gentleman for that interesting answer. Does he agree that it is time for the Labour party to be honest about the privileged influence that some of its larger donors have had on legislation that is debated in the House, and will the Liberal Democrats join the Conservatives—
Mr Speaker
Order. The hon. Gentleman must resume his seat.
Questions to Ministers should be about the responsibility of office-holders for public policies. It is no good the hon. Gentleman nodding at me; his question was out of order, and it is about time that he learned that fact.
Sadiq Khan (Tooting) (Lab)
The Deputy Prime Minister has previously endorsed the long-held convention that issues of party funding should—as he has just said—be resolved by cross-party agreement when that is possible. He has told us that the Committee on Standards in Public Life will report shortly: in fact, it will report next week. Is he concerned about the objections from the chairman of the Conservative party to the £10,000 cap proposed in the draft report, and is he worried about the possibility of a situation similar to that which arose in 2007 when the Conservatives walked away from the opportunity to secure a cross-party agreement? [Interruption.]
Mr Speaker
Order. It would help if there were not so much noise from Whips on the Treasury Bench, so that the Chair could hear what was being said. Questions must be orderly. The Deputy Prime Minister will answer that which is orderly, and not that which is not.
The Deputy Prime Minister
I wonder whether the right hon. Gentleman’s question was written by the GMB, because I hear that Opposition Front Benchers have got into the habit of asking their union paymasters what questions they should ask and what amendments they should table. If that happened in any other political party, Labour Members would say that it was an absolute scandal. We know that the trade unions can speak for themselves; it is time that we knew whether the Labour party can think for itself.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Deputy Prime Minister (Mr Nick Clegg)
I am sorry, Mr Speaker. I enjoyed the last answer so much that I temporarily forgot where I was.
As Deputy Prime Minister, I support the Prime Minister on a range of Government policies and initiatives, and, within Government, I take special responsibility for the Government’s programme of political and constitutional reform.
Michael Connarty
I am pleased to note that the Deputy Prime Minister remembers what his Department actually does.
One of the main topics of interest to people in my constituency is the commission that will consider the West Lothian question. Can the Deputy Prime Minister give us a firm timetable for consultation, and can he name all the parties that will be consulted, including the Labour party, the new Labour party leadership in Scotland and the trade unions, which are a fundamental part of the fabric of the Scottish people?
The Deputy Prime Minister
The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), will give more details about the commission in a statement before Christmas.
David Morris (Morecambe and Lunesdale) (Con)
T3. Will my right hon. Friend elaborate on the comments made by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) about industrial tribunals? If there is to be any reform, will he give us a timetable, and may I respectfully ask whether I may help out, given my experience in this regard?
The Deputy Prime Minister
I know that my right hon. Friend the Secretary of State for Business, Innovation and Skills is keen to proceed with the reforms that I mentioned earlier: the change in the timetable from one year to two, and the idea of protected conversations. I am sure that he would be delighted to benefit from my hon. Friend’s expertise.
Yvonne Fovargue (Makerfield) (Lab)
T2. Does the Deputy Prime Minister support the many charities and advice agencies—including most recently Scope—his party conference resolution and his Justice spokesman by opposing the complete removal of welfare benefits and the majority of social welfare laws from the scope of legal aid, even when the problems involved are interrelated and complex?
The Deputy Prime Minister
If we consider the recent massive expansion in legal aid and the budget for it, and the types of dispute brought within its scope, I think any reasonable person would agree that it is worth trying to put the budget on a more sustainable footing and that where there are alternatives to court—such as tribunals, mediation and citizens advice bureaux—they should be explored first, rather than immediately decanting people and disputes into the court system.
Tim Farron (Westmorland and Lonsdale) (LD)
T4. In Cumbria we are very proud of having close business and cultural ties with Scotland, but does my right hon. Friend share my concern that business confidence on both sides of the border is being badly affected by the uncertainty caused by the Scottish Government’s obsession with separatism?
The Deputy Prime Minister
I strongly agree with my hon. Friend. At a time of huge economic uncertainties in Europe and the world that are, understandably, creating anxiety among many families in this country, the last thing families in Scotland need is this constant guessing game—the First Minister’s cat-and-mouse game on the future of the Scottish people. What people want is certainty, because certainty is what delivers prosperity, jobs and growth.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I thank the Deputy Prime Minister for his tribute to our colleague, Alan Keen? He was proud to represent a London constituency, but he never lost his fierce, passionate commitment to social justice, which he brought with him from his roots in the north. We will miss him greatly, and our sympathies are extended to Ann and his family.
May I ask the Deputy Prime Minister about the shocking increase in the number of young people out of work for more than six months? In London, the increase has been 93%, in Warrington there has been a 200% increase since May, and the situation is even worse in many places. Because of this Government’s actions, the economy is too weak, and the Deputy Prime Minister’s programmes to help the young unemployed are too small. Will he admit that he urgently needs to take further action to help the young unemployed?
The Deputy Prime Minister
I accept that we need to take more action; it would be a real dereliction of duty if we did not do more to try to make sure that young people are given a real pathway into training, further and higher education or the labour market. As the right hon. and learned Lady will know, youth unemployment has increased pretty remorselessly since 2004, so it increased during the second part of the Labour Government’s time in office. Indeed, it increased by about 40% under Labour. There are some very big structural problems in the labour market that we need to address. I am leading some work on that in government, and we hope to make announcements on it very shortly, before the autumn statement. The right hon. and learned Lady was right to raise this subject.
Ms Harman
But long-term youth unemployment was going down, and, before the recession, was at its lowest level. As rising unemployment makes it harder to pay down the deficit, why have the Government cut work programmes by a third, and why are they closing jobcentres, including in my constituency of Camberwell? We expect it from the Tories—youth unemployment is a price worth paying—but how on earth can the Liberal Democrats be prepared to go along with this?
The Deputy Prime Minister
The right hon. and learned Lady should not be quite so pleased with herself. Under Labour the number of NEETs—young people not in education, employment or training—increased by 50%. Is that a record she is proud of? I think it is a good thing that we have delivered more apprenticeships than her Government ever did. We will deliver a quarter of a million more apprenticeships than were planned under Labour, and we are also creating a new network of university technical colleges to give young people the skills to get into work and rolling out a new Work programme aimed at supporting young people. As I acknowledged earlier, yes there is more work to do, and we must do more to support young people, particularly those aged about 18 or 19 who are making the difficult transition from full-time education to trying to find their feet on the first rung of the jobs ladder. We will do more—we need to do more—but the right hon. and learned Lady should not be quite so complacent about her Government’s record.
Karl MᶜCartney (Lincoln) (Con)
T6. I am concerned about the possible role that the EU foreign service had in recently deposing the elected Heads of two sovereign Governments. Can the Deputy Prime Minister confirm that he has sought assurances that EU officials based in this country do not abuse their positions here?
The Deputy Prime Minister
I do not think that there is any remote possibility of a coup being engineered from the European Commission office just around the corner. The whole world is looking at what is happening in Italy and Greece with growing alarm, and only Labour Members take it as a role model for their own behaviour. There is a big dividing line in British politics now between those on the Government Benches who believe that Governments should be in charge of their own economic destiny and those on the Opposition Benches who think that bond traders should be in charge of the economy.
Pamela Nash (Airdrie and Shotts) (Lab)
T5. We are just two weeks away from world AIDS day, in this the 30th year of the HIV epidemic. We now have scientific evidence to show that new HIV treatments are 96% effective at preventing the spread of HIV. Does the Deputy Prime Minister agree that the Prime Minister should support the United States Secretary of State Hillary Clinton and make the HIV generation a priority for the British Government in order to maintain our commitments to the millennium development goals?
The Deputy Prime Minister
As the hon. Lady may know, that is already one of the key priorities in our aid budget and programme. As she will also know, that budget is increasing substantially, even though we have such huge pressures on the public purse elsewhere, in order to meet the UN target of 0.7%. I know that a great deal of discussion is going on with the American Administration and others who are trying to work collectively. I am more than happy to look into the details of her question if she feels that there is more we should do on this front.
Richard Graham (Gloucester) (Con)
T7. I strongly support the principle of fairness in constituency size, which is behind the Parliamentary Voting System and Constituencies Act 2011, but does the Deputy Prime Minister recognise that the Boundary Commission’s proposal to relocate Gloucester’s entire city centre into the Forest of Dean constituency seriously damages the link between the Member of Parliament and the city, and the accountability of the MP for Gloucester’s regeneration? Does he agree that the Boundary Commission could split a ward? Will he confirm that that is in order?
Mr Speaker
Order. We have got the thrust of it. This is topical, so it has to be brief.
The Deputy Prime Minister
I feel in a slightly invidious position having to answer that question while the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper) is sitting next to me, because I know that he has an adjacent constituency. As my hon. Friend the Member for Gloucester (Richard Graham) knows, this is simply not a matter for Ministers. We have legislated—[Interruption.] I know that the idea of an independent Boundary Commission is alien to the Labour party, but that is what is going to happen.
Kevin Brennan (Cardiff West) (Lab)
T8. When a warning about the penalty was included on a letter to constituents of my hon. Friend the Member for Vale of Clwyd (Chris Ruane) in Rhyl West, the poorest ward in Wales, voter registration in that ward increased by 40%. If the Deputy Prime Minister really is a democrat, will he consider that startling statistic and make sure that there is not only a civic duty but a requirement for people to register to vote?
The Deputy Prime Minister
Only the hon. Gentleman thinks that you are a democrat by criminalising lots of people. Only the Labour party thinks that the solution to everything is to put more crimes on to the statute book. As I explained to him, the civic duty remains. It is not an offence at the moment not to register; it is an offence not to provide information where requested to do so.
The Deputy Prime Minister
Will he just listen? That offence will remain on the statute book.
Mr Speaker
Order. The House must come to order. Members must not keep shouting at the Deputy Prime Minister simply because they do not like what he is saying. It is called democratic exchange, and the hon. Member for Cardiff West (Kevin Brennan) should be used to it.
Andrew George (St Ives) (LD)
T10. The Deputy Prime Minister will be well aware that Cornwall is a distinctive region within the UK, with its own unique language and history, and that it has modest ambitions for devolution, not to cut itself off, but to cut itself into the celebration of diversity. Will he meet a delegation from Cornwall so that we can explore how Cornwall can help the Government to make better and more efficient decisions there?
The Deputy Prime Minister
I would be more than happy to meet a delegation such as my hon. Friend suggests. As he knows, this Government are pursuing a radical agenda of devolution, not just to the devolved Administrations within the UK, but to the regions and communities within England.
Lilian Greenwood (Nottingham South) (Lab)
T9. As a result of his Government’s economic policies, youth unemployment in Nottingham is back up to the level it reached the last time the Tories were in power. The Derbyshire and Nottinghamshire chamber of commerce is calling on Ministers to reprioritise their spending plans to promote growth, investment and exports. The Deputy Prime Minister would not listen to our concerns on police cuts. Is he going to listen to our concerns on growth and jobs?
The Deputy Prime Minister
As I have said, I accept that we need to do more. I do not believe that the generation born in the boom should suffer most in the bust, but I remind the hon. Lady that this is quite a complex issue. Youth unemployment has been increasing steadily since 2004; it increased by 40% during the Labour Government’s time in office. I am leading some work on this in Government and I hope to make an announcement soon, particularly in relation to youngsters who are trying to make the transition from education into work. If she has any ideas on this I am very keen to listen to her.
Mr Philip Hollobone (Kettering) (Con)
T11. May I relay to the Deputy Prime Minister the frustration, concern and anger of my constituents in Kettering that he is acting against the national interests by using his position to block the repatriation of powers from Europe and by preventing the scrapping of the Human Rights Act?
The Deputy Prime Minister
No Front Bencher in the coalition is talking about the unilateral repatriation of powers from the European Union. Why? Because it simply is not possible—it does not work like that. We have to seek agreement with 26 other countries to get that repatriation. The idea that one could simply get on to the Eurostar, go over to Brussels and come back with a bag load of powers simply is not feasible. Yes, let us examine the balance of powers, as we committed to do in the coalition agreement. I am a pro-European, but I believe in reforming the European Union. I do not believe the status quo is right, but I also believe that we need to act smart and move sensibly.
Lisa Nandy (Wigan) (Lab)
Last year, the Deputy Prime Minister, speaking in a professional capacity, set out how he would end child detention by May. It is now November. Does he still believe this practice is immoral and does he still plan to keep his promise? If so, will he tell the House when?
The Deputy Prime Minister
Compared with the previous Government’s record of thousands of young people being detained—yes, immorally—behind bars when they were entirely innocent, the new arrangements are a complete, humane, liberal revolution, of which I am very proud indeed.
Sheryll Murray (South East Cornwall) (Con)
T13. Currently, the new electoral register is published on 1 December each year. Will there be any change to this system in 2012 to allow the most up-to-date information possible to be available for the police commissioner elections due to be held on 15 November?
The Deputy Prime Minister
The plans for 2012 are just as they are for this year; there will be no change at all.
Chris Ruane (Vale of Clwyd) (Lab)
My hon. Friend the Member for Cardiff West (Kevin Brennan) mentioned the issue of Rhyl West. I put down a parliamentary question asking the Minister to look at the specifics of that case. To go from 2,500 to 3,500 registered voters in one year in the poorest ward in Wales, which has 900 houses in multiple occupation, is a fantastic achievement. If the Minister is serious about registration, he needs to look at best practice, so will he look at the issue of Rhyl West?
The Deputy Prime Minister
The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and I are more than happy to look at that example. The Select Committee on Political and Constitutional Reform has recommended that a new offence should be created and of course we will look at that—it is always right to look at suggestions from such a distinguished Committee. Under the current offences, only 144 people were prosecuted out of the millions of people on the electoral register last year. That suggests that some of the other things we are doing, such as data matching and making sure that everybody is approached in 2014 to get them on to the register, might be a higher priority than once again creating more new criminal offences on the statute book.
Stephen Williams (Bristol West) (LD)
Does my right hon. Friend agree that he has the opportunity in this Parliament to continue the work that was started a century ago by his predecessor, Asquith, and reform the House of Lords? Does he agree that the absolute bare minimum of progress would be the removal of the remaining hereditary peers and the Church of England bishops?
The Deputy Prime Minister
As my hon. Friend knows, our proposals are now subject to extensive scrutiny in a Committee that I hope will report in the early months of next year. I have always believed, as do many hon. Members on both sides of the House, that those who make the laws of the land should in some way or another be accountable to those who have to obey the laws of the land. That founding democratic principle, which is respected in legislatures all around the democratic world, is one that I should like to see installed in the other place as well.
Mr Dennis Skinner (Bolsover) (Lab)
Now that the Deputy Prime Minister has displayed a high state of excitement about party political donations, will he do the decent thing as leader of the Liberal Democrats and instruct them to surrender their ill-gotten gains of more than £2 million from that jailbird Michael Brown?
The Deputy Prime Minister
As the hon. Gentleman knows, that matter was independently examined; the Liberal Democrat party was entirely within its rights, and it was entirely reasonable, to accept the money at the time, even though, of course, we would not have done so if we had known then what we subsequently knew. Given that his colleagues on the Front Bench are tabling amendments and deciding how to vote according to what their paymasters in the trade unions say, we need to know whether he and other Labour MPs are voting for what they think is right, or what they think is right for the trade unions.
Mr Speaker
I am sure that the hon. Member for Bolsover (Mr Skinner) is duly flattered, but it is no part of his responsibility in the House to answer questions, or at least not at this mid-point in his parliamentary career.
Richard Drax (South Dorset) (Con)
Will the Deputy Prime Minister tell the House when he intends to join the headlong rush to join the euro?
The Deputy Prime Minister
I do not think that there is the remotest possibility that this country will join the euro while I am in government.
Mark Durkan (Foyle) (SDLP)
There are concerns that the net effect of the Government’s changes will be under-registration in England and Wales. Has the Deputy Prime Minister appraised the impact of that on the distribution of seats to the territorial boundary commissions under the Sainte-Laguë formula?
The Deputy Prime Minister
As the hon. Gentleman knows, I do not agree that moving to individual elector registration in the way we are—in the way advocated by the previous Government, too—will necessarily lead to the outcome he suggests. That is why we are putting so much time into data matching, making sure that there is a period of grace so that people can re-register on the other side of an election, and ensuring that people go from home to home to make sure that everyone has the opportunity to be individually registered.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Deputy Prime Minister told the House that he is responsible for constitutional and political reform. If the ambitious programme that he has set himself proves too ambitious, will he allow a little bit of slippage in reform of the Lords and the equalisation of boundaries?
The Deputy Prime Minister
It is important to be clear about our ambitions, and we have been, right from the outset, when the coalition Government were formed. We have five years to deliver the changes. Yes, they are major changes, but as we saw with the reforms to the Act of Settlement, even the most intractable issues that people believe are not susceptible to reform can be reformed if there is sufficient debate, and sufficient consensus in all parts of the House that reform is desirable. Most people believe, for instance, that reform of the House of Lords is long overdue; it is 100 years since it was first debated.
Paul Flynn (Newport West) (Lab)
1. What discussions he has had with the Secretary of State for the Home Department on the Baker report on extradition arrangements.
Graeme Morrice (Livingston) (Lab)
10. What discussions he has had with the Secretary of State for the Home Department on the Baker report on extradition arrangements.
The Attorney-General (Mr Dominic Grieve)
I have not had any such discussions with my right hon. Friend the Home Secretary.
Paul Flynn
Does the Attorney-General recall saying, in 2009, when in opposition,
“Our extradition laws are a mess. They’re one-sided. A Conservative government will re-write them”?
Will they? Or is this another example of this Government’s signature policy of promising miracles in opposition and delivering nothing in government?
The Attorney-General
The first thing the coalition Government decided to do on taking office was ask Lord Justice Scott Baker to preside over a report; of course, he was helped by others in that. We have now had that report. I will consider the recommendations that are specific to the Law Officers in conjunction with the Director of Public Prosecutions and the director of the Serious Fraud Office. That involves discussions with devolved jurisdictions. Of course, my right hon. Friend the Home Secretary will consult on the recommendations that touch on her responsibilities, together with other members of the Government who can provide some input.
Graeme Morrice
What consideration has the Attorney-General given to implementing a forum bar to give judges more discretion in deciding whether it is in the interests of justice for cases to be tried in the UK, such as the case involving Gary McKinnon, or where the offence was committed in the UK and it is difficult for the defence to bring witnesses and evidence to a foreign jurisdiction?
The Attorney-General
The hon. Gentleman makes an important point, which is touched on in Lord Justice Scott Baker’s report, and will have to be taken into account in the Government response. He will be aware that Lord Justice Scott Baker’s proposals are guidelines, rather than an implementation of the forum bar. That is something that the Government will have to consider.
Sir Menzies Campbell (North East Fife) (LD)
I have the misfortune to disagree with Lord Justice Scott Baker’s conclusion in relation to the standard of proof. May we have an assurance from the Attorney-General that in determining these matters proper account will be taken of the principle of reciprocity, and that it will be ensured that British citizens are not at a constitutional disadvantage in comparison with their American counterparts?
The Attorney-General
Mr right hon. and learned Friend makes another important point. Again, that is one reason why we asked for that matter to be looked into by Lord Justice Scott Baker and those who served with him. We are going to have to take account of his proposals, and I hope very much that my right hon. and learned Friend will make a contribution to that discussion.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Will my right hon. and learned Friend give the House the reaction, if any, from international counter-parties to the Baker report?
The Attorney-General
I am afraid that I cannot comment on the reaction from international counterparts. There is interest in the matter—indeed, I have been made aware of that by a number of sources, particularly in respect of people connected with the United States. Outside that, however, I cannot comment formally, and I think it is likely that any formal response would go to my right hon. Friend the Home Secretary.
Yvonne Fovargue (Makerfield) (Lab)
3. What recent discussions he has had with the director of the Serious Fraud Office on its procedures for investigating cases of bribery and corruption.
Mr Gerry Sutcliffe (Bradford South) (Lab)
4. What recent discussions he has had with the Director of the Serious Fraud Office on its procedures for investigating cases of bribery and corruption.
The Attorney-General (Mr Dominic Grieve)
I hold monthly meetings with the director of the Serious Fraud Office to discuss all aspects of the SFO’s work, including what it is doing to counter bribery and corruption. The Bribery Act 2010 came into force on 1 July 2011, and the SFO was well prepared for that. The SFO website provides detailed information, including joint prosecution guidance from the director of the SFO and the Director of Public Prosecutions.
Yvonne Fovargue
No one has faced prosecution as a result of the global financial collapse. Does the Attorney-General think that that is because there was no wrongdoing, because the SFO is not doing its job, or because we need a change in the law?
The Attorney-General
I have no evidence that there is any need for a change in the law. As and when matters are brought to the attention of the police or the SFO that require investigation and that may be linked to the global collapse, they will be investigated and inquired into. She will appreciate that I am not in a position to comment on individual cases in the House for obvious reasons.
Mr Sutcliffe
Is the Attorney-General not a little complacent, because the Bribery Act is a new measure that came into force in 2011? There is concern around the world about the way in which global markets have operated, so the SFO should at least have a look at changes that might need to be made to the law.
The Attorney-General
The law on bribery and corruption has been looked at extensively by the House, and new legislation has been enacted. I believe—and I think that this view is shared across the House—that the legislation is fit for purpose. It has been applied in one case domestically, and no doubt it will be applied in cases concerning global finance, too. As I said in response to the previous question, unfortunately, I cannot comment on individual cases, but I have seen nothing in my routine business meetings with the Serious Fraud Office to make me think that this is an area—I understand that it is of concern to the House—that has in some way been overlooked.
Sir Peter Tapsell (Louth and Horncastle) (Con)
Following the two questions that I put to the Prime Minister on this subject, will the Attorney-General liaise with the Chancellor of the Exchequer to widen the scope of liability for criminal action against financial institutions, as in the recently passed Dodd-Frank Act in the United States, so that the concept of the presiding mind can be introduced into British law, thus greatly facilitating the prosecution of top bankers who in future behave in a disgraceful way?
The Attorney-General
I thank my right hon. Friend for that. Section 7 of the Bribery Act 2010 already goes some way in the direction of what he suggests. In addition to that, I know that the Law Commission is carrying out research into this area, and I look forward to seeing its conclusions on what changes to the law might be required.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Attorney-General will recall that he once said about a case of bribery in Saudi Arabia that decisions balancing the national interest and the need to prosecute should lie with the director of the Serious Fraud Office alone. Indeed, as he has already said, there was cross-party support for Labour’s Bribery Act which enshrined that in law. If this is still his view, will he be instructing the Serious Fraud Office to proceed with a full investigation into the allegations by whistleblower Lieutenant Colonel Foxley of £11.5 million in kickbacks paid to senior Saudi officials? When does he expect to make a decision on the case of GPT? If he decides to stop the case, will he come to the House and explain why?
The Attorney-General
May I make two points to the hon. Lady? First, a decision on whether to investigate any matter—I am afraid I cannot comment on an individual case—is a matter for the director of the Serious Fraud Office and the Serious Fraud Office itself. Secondly, if, in the course of such an investigation, issues concerning the public interest were to come to light that required my being consulted and any decision being made, I can assure the hon. Lady that I would come to inform the House of any decision that I took, particularly if any such decision at any time were in any way to override a decision of the director of the Serious Fraud Office, or if there was a public interest matter which led to the case coming to a conclusion other than that which one might have expected.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
5. What discussions he has had with the Crown Prosecution Service on progress in issuing gang injunctions.
The Solicitor-General (Mr Edward Garnier)
None, is the short answer. The Crown Prosecution Service does not have a formal role in applying for or issuing gang injunctions. Those are a civil law tool applied for by the police and local authorities and ordered by the court. A failure to comply with the terms of an injunction is not of itself a criminal offence. That said, the CPS has an interest with other agencies in tackling illegal gang activity. The hon. Lady has been at the forefront in her own constituency and in the House in helping to deal with gangs, and I commend her for that.
Meg Hillier
I am pleased that in a letter to me the Attorney-General indicated that he would be willing to look at having specialist prosecutors from the CPS to deal with gang injunctions, and I hope that we may see that happen in my own borough, Hackney. What progress has been made on the transfer between courts of ASBO applications so that they can be dealt with alongside other crimes, where that is appropriate? We have seen some problems with the reorganisation of courts in our area, which may be contributing to the delay.
The Solicitor-General
From her knowledge of the subject, the hon. Lady will appreciate that there is a difference between ASBOs, which are a post-conviction instrument, and injunctions, which are anticipatory. I am not up to speed on the organisation of courts, which is a matter for HM Courts Service and the Ministry of Justice. None the less, the hon. Lady is right to point out that there is a need for co-ordination. The borough Crown prosecutor in her own constituency is now the central reporting point as far as she is concerned. I hope more progress can be made, and I am happy to discuss this further with her.
Tom Brake (Carshalton and Wallington) (LD)
Does the Solicitor-General agree that if gang injunctions are to be effective diversionary schemes and mentors must be available? What progress is being made on that front?
The Solicitor-General
As my right hon. Friend knows, the Home Secretary and the Secretary of State for Work and Pensions recently issued their report on the subject. Of course it requires a great deal of co-operation, diversion and the input of the criminal justice agencies, but we are doing our very best to ensure that this is dealt with.
George Hollingbery (Meon Valley) (Con)
6. What advice he has provided to ministerial colleagues on reform of the European Court of Human Rights ahead of the UK’s chairmanship of the Council of Europe.
The Attorney-General (Mr Dominic Grieve)
As the Minister responsible for conduct of litigation before the European Court of Human Rights, I have been involved in the discussions on the United Kingdom’s priorities for the chairmanship, which the Minister for Europe announced to the House on 26 October.
George Hollingbery
But does my right hon. and learned Friend agree that, despite the adoption of protocol 14, with 150,000 cases still outstanding at the ECHR, equating to a backlog lasting 40 years, further reform of the system of application is clearly needed, particularly with regard to the right of individual petition?
The Attorney-General
My hon. Friend is absolutely right that the backlog is now nearly 160,000 cases. It results in long delays for applicants, including many victims of serious violations, and effectively threatens to deny them access to justice. The Government are determined to try during our chairmanship to secure agreement to a set of efficiency measures that will help the Court deal with the backlog. In particular, we want to develop practical measures to strengthen subsidiarity. Primary responsibility for implementing the convention falls on national authorities in the Council of Europe’s member states, and the Court’s role should properly be to act as a safeguard for cases where a national authority fails to implement the convention properly. I think that that can be done without removing the right of individual petition, which is an important safeguard in countries that are members of the Council but where the human rights record is not good.
Jeremy Corbyn (Islington North) (Lab)
In view of the Attorney-General’s last answer, what pressure will Britain bring to bear during its chairmanship on eastern European countries where the treatment of Travellers, Gypsies and Roma people is so appalling and where many of them are unable to access local courts, never mind national ones, so that what happens in the European Court of Human Rights is completely beyond them? Does he not accept the need to pressurise those national Governments who are signatories to the European convention?
The Attorney-General
The hon. Gentleman is absolutely right that all 47 members of the Council of Europe need to observe the terms of the convention. If there were no violations of the convention, no successful cases would be brought before the Court. There are mechanisms—the Committee of Ministers is one—for enforcing judgments that have been handed down and preventing clone cases from coming back again and again and cluttering up the Court. Individual countries can try to take a lead, as I am sure the United Kingdom can, and of course the Human Rights Commissioner is central in trying to improve standards. It is worth bearing it in mind that, despite the hiccups and difficulties, standards are improving overall, which is a measure of the extent to which the convention has been a great success.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the Attorney-General recognise that, in seeking support from member states for necessary reforms of the Court, it would be helpful to make it clear that Britain is seeking not to abandon or leave the European convention, but to have a Court that can effectively safeguard against serious breaches of human rights?
The Attorney-General
I entirely agree with my right hon. Friend. That point is made repeatedly by Ministers. I represented the UK two weeks ago in the European Court of Human Rights on the intervention in the case of Skoppola. I took the opportunity to get that message across very clearly in subsequent meetings with a number of people connected with the Court and the Council of Europe.
Toby Perkins (Chesterfield) (Lab)
7. What steps he has taken to ensure that reductions in funding for the Crown Prosecution Service do not adversely affect front-line services.
Julie Hilling (Bolton West) (Lab)
9. What steps he has taken to ensure that reductions in funding for the Crown Prosecution Service do not adversely affect front-line services.
The Solicitor-General (Mr Edward Garnier)
The two key priorities of the Crown Prosecution Service over the spending review period are quality and efficiency. The CPS strategy is to protect front-line delivery. Savings were sought in the first instance from back-office functions. Savings made from the front line will be achieved through greater productivity and by maximising the gains from improved criminal justice system efficiency and better use of technology.
Toby Perkins
Under the POD system operating in the Crown courts, only the most serious cases are now allocated to an individual dedicated prosecutor. Can the Solicitor-General tell the House how many cases under that system have been dropped or delayed because evidence was not prepared in time?
The Solicitor-General
No, I cannot, because the CPS deals with hundreds of thousands of cases every year. The POD system is actually in the CPS’s offices, not the Crown courts, but I take the hon. Gentleman’s point. The point of the POD system is to enable more people to have ownership of cases so that they are dealt with more efficiently.
Julie Hilling
Under the Labour Government the CPS made great progress in prosecuting domestic violence, thanks in large part to the domestic violence training given to prosecutors and the use of dedicated domestic violence prosecutors. Does the Solicitor-General agree that the cuts to the CPS have placed a huge pressure on prosecutors, with the result that dedicated domestic violence prosecutors are now too overloaded with other work to give domestic violence cases the attention they need and deserve?
The Solicitor-General
I agree that the previous Government were particularly adept in dealing with domestic violence policy, and it is an area that my right hon. and learned Friend the Attorney-General and I have taken up with alacrity. I have appeared in the Court of Appeal to deal with unduly lenient sentences relating to violence against women, particularly sexual assaults. I broadly agree with her, but I do not accept that the system is under any strain in the prosecution of domestic violence cases. There are some really dedicated and hard-working lawyers and administrative staff in the CPS working to ensure that women are safe in their homes.
Mr Philip Hollobone (Kettering) (Con)
On the quality and efficiency of prosecutions, will the Solicitor-General ensure that parenting orders are pursued far more often in prosecution cases when young people are successfully convicted?
The Solicitor-General
We will endeavour to ensure that all appropriate orders and sentences are applied for and handed out. I am clearly not going to give a running commentary from the Dispatch Box on any particular case, but I agree with my hon. Friend’s broad point.
Jessica Morden (Newport East) (Lab)
8. What recent assessment he has made of the effectiveness of multi-agency risk assessment conferences in improving domestic violence prosecutions.
The Attorney-General (Mr Dominic Grieve)
I have not made any recent assessment of the effectiveness of multi-agency risk assessment conferences in improving domestic violence prosecutions. The most recent assessment, which the Home Office published in July, found that such conferences had the potential to improve victim safety and to reduce repeat victimisation, but that a more robust evaluation would be required. We see multi-agency working as a key component of the Crown Prosecution Service’s work to improve prosecutions in that area and to support victims, and we will continue to work with the Home Office on the matter.
Jessica Morden
Earlier this year the Attorney-General and the Solicitor-General visited Gwent police’s Onyx unit, which they declared to be one of the best in the country at delivering substantial change in the conviction rates for domestic violence and rape. The Attorney-General has repeatedly acknowledged the role that those services play, but can he confirm that he and the CPS are actively monitoring the impact of the cuts on them?
The Attorney-General
Yes, I can confirm that the CPS has very much in mind whether any areas of savings that may be made might have an adverse impact on the service that is provided to victims of violence against women and of domestic violence. My information is that the CPS does not believe that its own work has been in any way undermined or lessened by such measures. That service remains one of its high priorities, and it is a high priority for us as Law Officers as well.
Antibiotic Action Initiative
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Kevin Barron (Rother Valley) (Lab)
I am pleased to see that many hon. Members have turned up for the formal presentation of the petition tonight. I had the honour of having the parliamentary launch of the Antibiotic Action initiative on Wednesday last week, when a formal petition of more than 4,300 signatures was handed in at No. 10 Downing street.
The petition states:
The Petition of supporters of Antibiotic Action, a national initiative of the British Society for Antimicrobial Chemotherapy,
Declares that the Petitioners believe that the treatment of common and serious bacterial infections will be seriously compromised unless urgent steps are taken to stimulate investment in the discovery and development of new antibiotics, further declares that to support the discovery, development and bringing-to-market of new antibacterial agents, opportunities should be identified to safely streamline and accelerate the licensing processes for new antibiotics; declares that the commercial challenges faced by industry in developing and bringing new antibiotics to the marketplace should be addressed, and declares that more partnership between academia and pharmaceutical and diagnostics companies in the UK should be encouraged, in order to maximise the conversion of discovered-candidate molecules into licensed antibiotics available for use on the NHS.
The Petitioners therefore request that the House of Commons urges the Government to review the licensing processes for new antibiotics, conduct a review of the commercial challenges faced by the pharmaceutical industry in developing and bringing new antibiotics to the marketplace and encourage more partnership between academia and pharmaceutical and diagnostics companies in the UK.
And the Petitioners remain, etc.
[P000983]
Border Control Scheme
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
(Urgent Question): To ask for an urgent statement on border control this summer, covering private flights.
The Minister for Immigration (Damian Green)
Let me apologise for the fact that the Home Secretary cannot be here; she is attending an important meeting of the National Security Council.
It is simply not true that immigration and customs checks for all private flights were abandoned under this Government. In fact, the controls against high-risk private flights were strengthened, and that is entirely consistent with our overall approach to border security of using more intelligence-led checks against high-risk passengers and journeys. Far from weakening our border controls, those measures were aimed at strengthening our border.
Under the previous Government, it was clear that the UK Border Agency’s procedures for private flights meant that some high-risk flights were missed, and this left our country open to the risk of drug smuggling, illegal immigration and gun running. In fact, the previous Government did not even have agreed definitions of high-risk, medium-risk or low-risk private flights, and there were no standard operational procedures: flights landing in one part of the country might be met by a UKBA team; the exact same flight landing somewhere else might not.
Indeed, under the previous Government, Lord Carlile, the independent reviewer of counter-terrorism legislation, called private aviation the UK’s “soft underbelly”. To get a grip on that chaotic situation, in January the UKBA developed a new strategy for private flights, with the aim of meeting 100% of all high-risk flights through the use of better intelligence and increased compliance, the greater use of the warnings index and a standardised risk-assessment procedure. It gave us for the first time a consistent national system for dealing with private aviation, and it drew on the resources of the police and other agencies to make sure that all high-risk flights were met.
The strategy makes use of the legal requirement for pilots to submit records of their passengers. Those are checked against the warnings index, and a full, standardised risk assessment is carried out. The UKBA will deploy officers to meet any flight on which police or other intelligence causes concern, or on which there is a warnings index hit. Local UKBA teams, field intelligence officers and the police then work to ensure a high level of compliance with these procedures, which are, for the first time, consistent across the country. In the view of UKBA senior management, the new strategy is finally getting on top of the risk from private aviation.
Everything that Ministers in this Government have authorised has been done to strengthen our borders: resources focused on high-risk passengers and journeys, a new strategy to sort out private aviation, a new National Crime Agency with a border policing command, e-Borders to check passengers in and out of the country, and tough enforcement. Some 400,000 visas were rejected last year and 68,000 people with the wrong documents were prevented from coming to Britain in the first place.
These particular operational changes were made to address a problem that had existed for years and had been identified but not acted on by the Government of whom the shadow Home Secretary was a member. The border is safer now than it was two years ago. I commend this statement to the House.
Yvette Cooper
Last week, the Home Secretary told the House:
“the only incident of which I am aware when passengers were waved through passport control without any checks at all did not occur during my pilot. It happened in 2004”.—[Official Report, 9 November 2011; Vol. 535, c. 324.]
Yesterday, I was shown e-mails from the border agency from June 2011, which show that immigrations and customs checks were stopped on arrivals of private flights, in accordance with a new national general aviation strategy. That and the answer the Minister for Immigration has just given contradict the information given by the Home Secretary last week.
Why, then, does the Home Secretary not feel that she should come to this House to answer the growing number of questions about this borders fiasco? She has refused to come to the House and she has refused to do interviews for nearly two weeks. One e-mail from 14 June refers to the instruction not to see passengers arriving on private charter flights for either immigrations or customs purposes and states:
“we are not allowed to physically see the passengers”.
Does the Minister for Immigration agree that the Home Secretary was wrong to say that no passengers had been, as she put it, “waved through” on arrival? Will he now correct that?
According to Treasury figures, there are 80,000 to 90,000 private flights a year. Will the Minister tell the House how many of those flights went through with no checks on arrival and what the security and immigration implications are of not even checking whether the number of people getting off the plane is the same as had been advised? If there was a new general aviation strategy, why did the Home Secretary not refer to it last week? Did she even know it existed? Was it in the weekly updates we now know went to the Minister for Immigration? How does that strategy relate to the so-called pilot?
There are far more questions than answers in this continuing borders fiasco. How on earth can we have any confidence in what the Home Secretary says is happening at our borders? She will not come and answer the questions. She said that no one was waved through, but it is clear that many passengers were. She said that Brodie Clark went further than she authorised and admitted he had done so, but this morning Brodie Clark has said categorically that he did not. She said that the performance of the border agency improved this summer, but this morning the head of the statistics agency described that as a highly selective use of statistics that may, indeed, be in breach of the ministerial code. Did the Home Secretary knowingly provide wrong information or did she just not have a clue what was going on at Britain’s borders? She cannot keep running away. She must come to this House herself and answer these vital questions about what was happening at the border agency this summer.
Damian Green
It is a shame that the shadow Home Secretary wrote that rant before she listened to what I said in response to her first question. To say that the Home Secretary has not been visible in this House is palpably absurd. She was here twice last week—[Hon. Members: “ Where is she?”] She is attending a meeting of the National Security Council. I am sorry that the shadow Home Secretary does not seem to think that that is an important part of the Home Secretary’s responsibilities. I am sure that the House thinks it is an important part of the Home Secretary’s responsibilities. The right hon. Lady’s basic accusation that the Home Secretary has in any way not answered these questions is, as I say, palpably absurd.
The second question the right hon. Lady asked—indeed, the only substantive one in her rather scatter-gun approach —was about how many people were coming through without being checked. The answer, now, is that every private flight is checked against the warnings index. [Interruption.] I commend Opposition Front Benchers for saying that it is a bit late now. Yes, it is—for 13 years, nothing happened; the right hon. Lady has put her finger on it. There was a shambles in the immigration system, and private aviation was part of it. That was identified by the Government’s own counter-terrorism adviser, but they did nothing about it. We now have done something about it, and that means that every flight is checked against the warnings index and every high-risk flight is met. If there have been changes, as there have been this year, they have been for the better and they have made our borders safer.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome my hon. Friend’s statement on private flights and the need for consistency across the country with every flight checked, as he confirmed. Does he agree that the border force is responsible for allowing only legitimate entry and exit, and that that is what our constituents expect?
Damian Green
My hon. Friend is exactly right. He makes a good point about the border force. The men and women at the border are doing a very good job. All our changes are designed to ensure a more risk-based approach to immigration control—an approach that I was glad to hear commended by the former Home Secretary, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), on the radio this morning—and to make the border safer, precisely by using the expertise of the men and women in the border force who check people coming through the border. Using their expertise more intelligently, and not just having a one-size-fits-all border security system will make, and already is making, our border safer. I think that underneath their bluster, the Opposition agree with that.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Is it not a fact that what the Home Secretary and the Prime Minister said in this House last Wednesday has been completely undermined by the latest revelations, which demonstrate that either they did know what was going on but would not tell the House or they did not know what was going on and could not tell the House? Is it not a fact that our borders are now less secure under this Government, with people coming in who are not even seen by the border agency? This Government have let the country down, and it is about time the Home Secretary went.
Damian Green
The answer to both the right hon. Gentleman’s questions is straightforwardly no.
Tom Brake (Carshalton and Wallington) (LD)
Does the Minister agree that it is this coalition Government who are going to have to clear up the mess left by Labour, reform a Department deemed not fit for purpose, and secure our borders so that our debate on immigration can be about the skills that the UK economy and the public sector need, rather than about border controls?
Damian Green
My right hon. Friend is right. I am sorry that the Opposition cannot elevate the tone of the debate. As I say, it is interesting that when Labour Home Secretaries cease to be Home Secretaries and become former Home Secretaries, they commend the degree of consensus about using a risk-based approach to security control and immigration control. That would be a sensible way for this debate to go forward, because it is perfectly clear that the long-term solution to the many challenges at our border is to use our resources as intelligently as possible and to use the very good people we have at the border to cope with and combat the highest risks. That is what the general aviation policy was meant to do, as was our pilot over the summer, and the early signs are that they are indeed successful. The Opposition can argue about the details, but I would genuinely welcome some common sense and support for these principles from the shadow Home Secretary. That would be a more sensible approach that the one she has taken until now.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Given that the Home Secretary’s policy was consistent across the country, will the Minister confirm that a number of private planes were allowed to land at Manchester airport this summer without proper customs and immigration checks? If that is the case, will he tell me how many?
Damian Green
The point of the pilot and of the private jets policy was to improve checks. The idea that there were no immigration checks is simply wrong. It is wrong in relation to Manchester airport and wrong in relation to other airports. The right hon. Gentleman asked how many flights arrived without immigration checks. The answer is none.
Tony Baldry (Banbury) (Con)
Could the Minister kindly explain what happened under the previous Government before the change to the new general aviation policy that is based on a risk-based assessment?
Damian Green
What used to happen under the previous Government was that flights were designated as high, medium or low risk, but there were no criteria by which anyone could judge whether flights were high, medium or low risk. All the very good people at the border therefore took a view on an individual basis. The result was complete inconsistency between different parts of the country. I cannot think that anyone addressing this matter in a fair-minded way would say that having a decent set of national criteria about what is a high or a medium-risk flight is less sensible than the chaos that existed before.
Tony Lloyd (Manchester Central) (Lab)
The shadow Home Secretary asked the Minister a direct question. What he has announced this morning is inconsistent with what the Home Secretary told the House last week. Did the Home Secretary know?
Damian Green
Nothing that I have said this morning is in any way inconsistent with what the Home Secretary said last week.
Mr Rob Wilson (Reading East) (Con)
Has the Labour party passed on all the details that it says it has received from border agency staff about private flights? Has the Home Office had time to check the veracity and accuracy of those allegations?
Damian Green
The Labour party, predictably, has passed the information on to newspapers, so we know what it has. [Interruption.] I do know about that. I will not stand here and condemn people for using leaked information. I merely point out to the shadow Home Secretary that it is rather more effective when one produces documents that show that Ministers have done something wrong. Throughout this affair, she has so far signally failed to do that.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will the Minister please tell the House how many of our border operations he has visited in the past 18 months?
Damian Green
All the big ones. I have been to all the major airports and all the major UKBA centres, as well as to several of the biggest overseas visa operations. The hon. Lady is quite right to suggest that Ministers should get out and talk to people who are actually doing the job. I do that as often as I can.
Claire Perry (Devizes) (Con)
As somebody who has spent their fair share of time with wailing infants in long immigration queues, I think that families across the country would welcome a more rational, risk-based approach to delivering results with scarce resources. Does the Minister agree that the fake outrage from the Labour party sits badly with its track record of 2.2 million people coming to this country, half a million asylum seeker claims and an open border—
Mr Speaker
Order. We are grateful to the hon. Lady for getting her views on the record. Unfortunately for her, the Minister is not responsible for the record of the previous Government.
Mr Gerry Sutcliffe (Bradford South) (Lab)
The public know that this is a shambles. We are getting the facts today only because of an urgent question from my right hon. Friend the shadow Home Secretary. Will the Minister put on the record the times that he has met Brodie Clark to discuss the pilot and the change in aviation strategy so that we can get the truth? The only way we are getting the truth at the moment is by forcing Ministers to come to the Dispatch Box.
Damian Green
I am very grateful to the hon. Gentleman for that point. He said some disobliging things about me in the debate last week, which was sad because I have always got on with him. He has given me the opportunity to say that in the year that he spent as shadow Immigration Minister he did not put down one written question on immigration. I am therefore entitled to doubt his deep interest in this subject. The answer to his question is that there are investigations going on. Clearly, all the facts are being put to the investigators. John Vine will publish his investigation in due course. He is an independent investigator and he will decide what to publish.
Mark Pawsey (Rugby) (Con)
I have been contacted in the past hour by a constituent who is a photographer, who carried metal boxes full of photographic equipment on private flights and took them through Stansted, with no checks, in the years up to 2002. The problem has therefore existed for years, including when the Labour party was in power, and it is plain wrong for the Opposition to raise the issue in the manner in which they have.
Damian Green
My hon. Friend is quite right to point out the shambles that was in place before, but as you pointed out, Mr Speaker, that is not my responsibility. I am very grateful for that. What I am responsible for is what happens now, and my hon. Friend makes a good point. That is precisely why we are making the changes that we are across the borders system. As I have said, using risk-based and intelligence-based measures will give us safer borders in the long run. Stansted is one of the airports where there have already been significant changes to plug some of the loopholes that existed. There is certainly more to be done at Stansted, Manchester and other airports, and I am not saying that the system is now perfect, but it is getting better.
Alex Cunningham (Stockton North) (Lab)
Part of Durham Tees Valley airport is in my constituency, and today we are getting conflicting information from officials there, one claiming that security is very much compromised, particularly in the case of private flights, and another claiming in today’s Evening Gazette that the airport is 100% secure. Will the Minister please tell the House who is right, and at least try to reassure the people of Teesside and beyond that their airport has taken the necessary steps to protect them and our borders?
Damian Green
The hon. Gentleman actually makes a very deep and important point. Different people working at the front line, presumably alongside each other, can genuinely have different perceptions of how good the system is. I would not go as far as the optimistic one of his constituents who says that it is 100% secure all the time—it would be foolish for any Immigration Minister to say at any time that every part of our border is 100% secure. However, I can absolutely reassure him, his constituents and the workers at the airport that we are doing our best to set up systems that make it more secure, and that we will keep doing so.
Damian Green
Well, that is not what the hon. Gentleman’s constituent has told him.
Henry Smith (Crawley) (Con)
For years there has been contamination of people arriving at entry points on domestic and international flights. Can the Minister assure us that such contamination will come to an end, and that there will be segregation of incoming passengers?
Damian Green
I am indeed aware of that, particularly at Stansted and Gatwick, and it is one of the priorities at the moment.
Ian Paisley (North Antrim) (DUP)
May I push the Minister for a little further clarification on the issue of flight warnings? There are 80,000 to 90,000 flights entering the United Kingdom. Can he assure us that the new checks that he mentioned will apply to flights that land in Northern Ireland, that there is no loophole for entry into the United Kingdom without those checks and that devolution does not have an impact on this aspect of the matter?
Damian Green
Any overseas flight that arrives in Northern Ireland from outside the common travel area will be treated like any other flight. Of course, the hon. Gentleman will know that there are complications and issues to consider with the common travel area, and as part of the list of things on which we are now acting, I am considering how to strengthen it so that we properly address the various problems that I know he and his colleagues from Northern Ireland have identified.
Kris Hopkins (Keighley) (Con)
Does the Minister agree that the previous Government’s reckless open-door immigration policy resulted in problems in community cohesion in many of our towns, and that we should not be taking lectures from individuals on the Opposition Benches?
Mr Speaker
Order. The hon. Gentleman has put his concerns on the record, but we must stick to the Minister’s responsibility.
Bob Blackman (Harrow East) (Con)
Will my hon. Friend the Minister remind the House what lessons have been learned as a result of the pilot, and what changes he is making to the system to ensure that our borders are secure?
Damian Green
The pilot is still being evaluated, but my right hon. Friend the Home Secretary has already said that the initial reported information suggests that it led to more interception of illegal immigrants, fraudulent documents, drugs and guns. The initial signs from the management information that we have suggest that the pilot was extremely positive, but there will be a full evaluation and then we will decide what is best to do for the future.
Mr Kevan Jones (North Durham) (Lab)
Further to the question from my hon. Friend the Member for Stockton North (Alex Cunningham) about Durham Tees Valley airport, will the Minister say exactly how many private flights arrived and were not checked? If he does not have that information to hand today, will he publish it?
Damian Green
As I have said several times, every private flight is checked against the warnings index. [Interruption.] The shadow Home Secretary, characteristically chuntering from a sedentary position, as she does throughout, is talking about that happening when flights arrive. It is actually safer to check them before they arrive, and that is what the warnings index is for. All private flights are checked against the warnings index before they arrive, and I tell the right hon. Lady—[Interruption.] I will tell her, if she will stop talking for a second and listen, that it is safer to check them before they arrive. That was why her Government and the current Government spent hundreds of millions of pounds on the e-Borders project—so that we could get the information before people came to this country. That was how we managed to prevent 68,000 people from even getting on planes to come here. If the Opposition Front Benchers cannot understand that stopping people before they arrive here is a better system, I fear that they do not understand the first thing about immigration control.
Nick de Bois (Enfield North) (Con)
In his evidence to the Home Affairs Committee, Brodie Clark said that he had sanctioned the relaxation of fingerprint checks at Heathrow. Was the Minister made aware of that?
Damian Green
For understandable reasons I have not been following what Brodie Clark has been saying over the past hour. I think it would injudicious of me to comment on anything that was said at a Select Committee hearing this morning when I was concentrating on the urgent question.
Phil Wilson (Sedgefield) (Lab)
Durham Tees Valley airport is in my constituency. How secure can the people of Teesside and Durham be if people arriving at the airport are not checked, not passed through immigration—not even waved through—and not even seen, because they have arrived on a private jet?
Damian Green
For the fourth time, I will tell Opposition Members—I wish their Whips could have thought of more than one question for them to read out—that every private flight is checked against the warnings index before it arrives. That is what makes it safe.
Mr Philip Hollobone (Kettering) (Con)
My constituents want to know the definition of private flights, which of the main airports they fly to, and what proportion of total passenger numbers is made up of such flights.
Damian Green
The definition is a flight that is not a scheduled flight. The number of airports that they fly into is in the hundreds, because frankly anyone who puts up a windsock in a field can have a private airport, but the number regularly used for private flights is between 100 and 150. The biggest usage of private flights is into our biggest airports, because most of them tend to be business flights.
Owen Smith (Pontypridd) (Lab)
The Minister keeps reassuring us that the system he has put in place is now safer, but UKBA staff are clearly not reassured of that, because one e-mail from them states:
“we are not allowed to physically see the passengers…we have no way of checking whether the handling agent information is correct or even if the number of people arriving…matches the number we have been advised.”
How, in that case, can the Minister tell us that he knows who is arriving and exactly how many people are on the incoming planes?
Damian Green
Because we are working much better than ever before with airports overseas, so we can check who is getting on the planes in the first place. As I keep repeating, it is better to do that overseas than to wait until people are in this country.
Neil Parish (Tiverton and Honiton) (Con)
Is it not necessary for us to bring in these tighter controls, because of the 2.2 million net immigration between 1997 and 2009 under the last Government?
Damian Green
There are two separate issues here, both of which need addressing. One is the vast number of people who arrived legally under the previous Government’s conscious policy of increasing immigration to unsustainable levels. Secondly, there is what we are discussing this morning—the fact that our borders were not sufficiently secure. Just as important as bringing down the legal numbers is making our borders more secure by a number of methods, such as the use of technology, the pilots that we operated in the summer and changing how we look at private flights. The various actions that we are taking are all designed to make the border safer.
Karl Turner (Kingston upon Hull East) (Lab)
The question has been asked several times, and I know that the Minister is frustrated, but I wonder whether he will give an answer. Does he think it acceptable that on his watch the UKBA could not even check passengers coming off private flights? Any chance of an answer?
Damian Green
I am tempted to revive that old parliamentary chestnut: “I refer the hon. Gentleman to the answer I gave some moments ago.” As I keep saying, it is better to do it overseas, which is what we do. It is also safer, and all the experts agree it is safer—and frankly, if the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) were still sitting on the Government Benches, she would be saying that it was safer as well.
Mr Speaker
Order. I am sorry to disappoint some colleagues, but time is against us—there is heavy pressure on time from Backbench Business Committee business—and we must now proceed.
Metal Theft (Prevention)
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Graham Jones (Hyndburn) (Lab)
I beg to move,
That leave be given to bring in a Bill to introduce a licensing scheme for scrap metal dealers; to enable magistrates’ courts to add restrictions to licences to deal in scrap metal; to require that financial transactions in trade in scrap metals be restricted to cashless payments; to give police officers powers to search properties owned by scrap metal dealerships; to provide that scrap metal proven to have been obtained through theft may be classified as criminal assets; to introduce criminal charges for theft of scrap metal which take into account aspects of the crime other than the value of the scrap metal stolen; and for connected purposes.
The crime of metal theft is reaching a crisis point in this country. According to the Energy Networks Association, metal theft from electricity networks rose by some 700% between June 2009 and June 2011. Organised crime has been involved in scaling the tallest electricity pylons and cutting down heavy tensile cable from the top of 275,000 V towers. The Association of Chief Police Officers has conservatively put the national cost of metal theft at £770 million. Figures from the British Transport police show that theft of overhead power cables has risen by 70% over the last year, with 2,712 cable-theft-related crimes registered in 2010-11. There are eight thefts or attempted thefts of railway cable every day, which has so far caused 240,000 minutes of delays to rail passengers this year and cost Network Rail £43 million over the last two years.
Yesterday, representatives of South West Trains told me of an incident involving a train travelling at peak hours from London. Metal thieves cut and removed a signalling cable and then, while Network Rail repaired it, cut a further section. The live shock could have seriously injured or killed Network Rail staff, while packed commuter trains were left at a standstill. Delayed and besieged passengers began exiting trains by climbing the embankments, crossing the live third rail. The result was an even greater section of the rail network having to be switched off for safety reasons—and this seven months before the Olympic games. In Burnley last week, something as simple as the theft of seven £75 brass padlocks left electricity substations exposed to inquisitive children. The past year has also seen six fatalities and 50 serious injuries, and I am sure that everyone in the House has been shocked by the increasingly numerous stories of thefts from war memorials. War memorials are being stolen, sold and scrapped because the regulatory framework surrounding metal recycling is so ineffective. In combination with the soaring international price of metal, there are effectively incentives to steal.
Metal recycling is a valuable industry. It is a sustainable means of reusing an important and increasingly expensive commodity. However, the soft regulatory framework undermines that logic by encouraging thieves to take materials that are still in use. The problem lies precisely in the fact that it is stolen metal that is being recycled. My Bill will go some way to removing the incentives to steal created by weak regulation in the industry. This is not red tape; the intention is to reduce the costs to businesses and the public purse incurred through damage to the nation’s infrastructure. Such regulation would allow legitimate, law-abiding and socially responsible scrap metal dealers to flourish. Indeed, a few scrap metal dealers already perform much of the requirements of the Bill in best practice.
Yesterday I met with representatives of SITA UK, a company that recently entered the metal recycling industry. They told me that they were shocked and appalled by the level of malpractice in the sector. The chief executive of SITA UK gave his full backing for the six elements of the Bill. So far, there has been no opposition from the affected industries to any of my six proposals. In fact, quite the reverse: they have received almost universal backing, with the concern now being that if we do not go far enough now, the problem will continue to escalate. The consensus in the industry is that the six measures in my Bill are vital if anything is to be done to stop the escalating crime. I now turn to those six provisions.
First, the Scrap Metal Dealers Act 1964 must be amended so that the current registration regime can be replaced by a robust licensing regime that is funded by a licence fee paid by scrap metal dealers. That is the first step towards something resembling a regulated industry. Secondly, property obtained through theft should be regarded as criminal assets. Classifying stolen metal as criminal assets would allow the Proceeds of Crime Act 2002 to apply. Crucially, that will impact on those who think that they can evade any regulatory regime. Thirdly, police authorities should be given the power to search and investigate all premises owned and operated by scrap metal dealers suspected of dealing in stolen property, as well as the power to close scrap metal dealers where criminally obtained metals are discovered.
Fourthly—there is a great deal of consensus in the affected industries on this point—trade in scrap metals must be restricted to cashless payments, with a concurrent requirement that scrap metal not be sold or processed until payments have cleared. Ministers may think that onerous, but such a system has been successfully implemented in France, Belgium and much of the United States. Alongside that, dealers should operate CCTV and require photo identification of sellers. Those measures would remove the anonymity of the seller and require honesty of the dealer. I have been informed by the industry that scrap metal is a £5 billion industry, with an incredible £1 billion estimated to be exchanged in cash payments. That amount of cash usage is unseen in any comparable, legitimate industry, and should also interest the Serious Organised Crime Agency and Her Majesty’s Revenue and Customs, if for no other reason than to verify its legality.
Fifthly, magistrates should be given the power to add restrictions to licences to deal in scrap metal, should they feel it necessary. Local knowledge is indispensible in addressing such crimes. Finally, the Theft Act 1968 should be amended so that sentencing is proportionate to the consequences of the crime, not the value of the metal stolen. A tougher sanctions regime is central to combating metal theft. That is important, because there has to be a realisation that we cannot police Britain’s metal estate. We have to accept the reality that there will always be an opportunity to steal metal and get away with it. We must adjust the deterrent sentence accordingly. The tariff must also reflect the fact that the theft of scrap metal worth £20 may cause £500,000 of damage or risk lives.
There is widespread support for the Bill in its current form. Yesterday I held a meeting in Parliament attended by representatives of BT, Network Rail, the Energy Networks Association, the Local Government Association, South West Trains, E.ON, Arqiva, Ecclesiastical Insurance and SITA UK, among others. They fully support the Bill in its entirety. In addition, I have received vocal support from the Country Land and Business Association and Lancashire constabulary. It is now time for the UK to prevent this epidemic plague. Supporting the Bill is an important step in demonstrating that this House not only takes seriously the theft of our heritage, public art and vital infrastructure, and the protection of churches and war memorials against desecration, but is willing to support tough measures. Therefore, I commend this Bill to the House.
Question put and agreed to.
Ordered,
That Graham Jones, Margot James, Mr John Spellar, Steve Rotheram, Mr Tom Watson, Bill Esterson, Pat Glass, Mr Alan Campbell, Martin Caton, Chris Kelly, Kate Green and Andrew Percy present the Bill.
Graham Jones accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 249).
Backbench Business
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Fisheries
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Frank Doran (Aberdeen North) (Lab)
I beg to move,
That this House considers that the Common Fisheries Policy has failed to achieve its key objective of producing a sustainable European fishery; welcomes the review of the policy by the European Commission; and urges Her Majesty’s Government to ensure that a revised Common Fisheries Policy makes particular provision for—
(a) a move away from a centralised management system to a system of regional management of fisheries involving all stakeholders and strengthening of the local management of the 12-mile limit;
(b) a manageable and practical scheme to eliminate the problem of discarded fish; and
(c) the replacement of the current system of annual quotas with a multi-annual system of management focused on conserving fish stocks within a sustainable fishing industry, in particular to protect the viability of low impact fishing.
Before I address the issues in the motion, I want the House to remember the bravery of our fishermen, and the incredibly difficult and dangerous work that they do. Fishing remains the most dangerous occupation in this country, and we remember them for their brave work and send our condolences to the families of those who have died. I remember in particular the tragic circumstances in which the husband of the hon. Member for South East Cornwall (Sheryll Murray) died in a shocking accident recently. We send our condolences to her in particular.
The common fisheries policy was established in 1970, before Britain joined the then European Community. Many people believe that the industry was traded as part of wider negotiations on access to the community. That is certainly the view of many in the fishing industry today, and it has coloured their opinion of the CFP ever since. Whatever the circumstances, the British fishing industry changed for ever when this country acceded to the common market in 1973.
Experience tells us that the CFP has failed in its objectives. Its primary objective was the
“rational and sustainable exploitation of fish stocks”,
but, over the life of the CFP, fish stocks have deteriorated considerably, as has our fishing fleet. The system is broken in several places. Decision making is centralised in Brussels, and it is far too complicated. The management style is far too top-down. Decision making is short term, and there is a one-size-fits-all culture. There are also serious issues with the science, but the science determines at least the direction of Council decisions on quotas. We have a system that operates on the basis that management measures and plans for EU stocks can all be created centrally by the Commission, that member states will enforce those rules, and that fishermen will obey them. To put it mildly, that does not reflect the reality of the fishing industry in Europe.
I should like to focus on two issues. The first is the problem of discards, which is high on the agenda. We are all opposed to the principle of good, saleable fish being thrown back into the sea. Television programmes, celebrities and many others outside and inside the fishing industry tell us that that is a bad thing, and of course it is a very bad thing. It is offensive to most of us, it is wasteful, it affects the viability and sustainability of fish stocks, and it distorts the science and scientific advice. It also deeply affects our fishermen, who are forced to throw perfectly good fish back into the sea to rot. The discard of fish is a direct consequence of the one-size-fits-all management approach by the European Commission and its strict adherence to a system of quotas applied to single species over the past 28 years.
The principle of the total allowable catch—TAC—system is questionable in itself, but the refusal to recognise that many fisheries are multi-species and require a much more sophisticated response is a significant sign of the inability of the present system to meet the needs of the fishing industry. Despite the huge improvements made by fishermen, particularly in Scotland, to use more sophisticated gear and other methods to avoid by-catch, it is still a major problem that the Commission has failed to address.
Then there is the even more difficult subject of black fish. From the earliest days of the UK’s membership of the CFP, that has been a problem, not just in the UK but across Europe. Until relatively recently, the subject was ignored by successive Governments. In the1970s, it was estimated that over 20% of the haddock caught in the North sea was illegally caught. Recent inquiries set up by Grampian police, Northern police and Her Majesty’s Revenue and Customs have resulted in a number of convictions of fishermen and fish-processing companies.
One statistic from a report published in July by KPMG gives a good idea of the scale of the fraud that has been uncovered. The report looked at crime in the corporate world in the first six months of this year, and it showed that, in Scotland, company fraud rose from £2.8 million last year to £94.1 million this year, of which £91 million related to prosecutions for illegal fishing. The sums involved are huge. Everyone in the fishing industry knew that it was going on, and that goes right up to Ministers and their officials.
The fraud has had a number of consequences. One has been a serious distortion of the science, much of which is based on the recording of the details of individual landings. It is clear that, for many years, the recorded landings have been wrong. There have also been serious consequences for many of the businesses that refused to become involved in the black fish trade. Most of them lost trade, and many went bust because their customers could get cheaper fish on the black market. I wish to discuss the related issues in more detail with the Minister, and I will contact him later with a view to arranging a meeting.
It is extremely important to stress that illegal fishing is not unique to the UK, and that it happens in many other countries. Following new regulations introduced in Scotland in 2004 requiring the registration of fish sales companies, the problem of black fish seems to have been almost eradicated. However, black fish and discards are two areas in which the Fisheries Commission has been blind to the impact of its policies. The policies in both areas have been immensely damaging to the fishing industry, not just here in the UK but across Europe, and of course both practices distort the science on which the whole quota system is based.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
I congratulate the hon. Gentleman on securing the debate, and on the motion. Having identified some of the crucial failings of the common fisheries policy, the motion also identifies one of the key solutions—namely, regional management. That would involve those with a stake in the fishing having a say in the policy. In that way, they would know what was going on and have a vested interest in ensuring that the policy was successful.
Mr Doran
I agree with the hon. Gentleman. One of the key needs of the fishing industry is to remove the top-down system of management and to involve the whole industry, right down to the level of the fisherman on the fishing boat. I will address that issue in a minute.
We are now promised a radical review. The Fisheries Council seems to recognise some of the issues on management. For example—picking up on the hon. Gentleman’s point—the possibility of devolved decision making is explored in the consideration of the transfer of responsibility away from the centre to the regional seas level and of the inclusion of the fishing industry. There is a strong view in the industry that decentralisation is essential for the future of the UK fishing industry, but it must be decentralisation that is meaningful and that works.
Industry leaders are worried about the lack of detail in the proposals and also about the model put forward by the Commission, as it will require member states with an interest in the various regional seas to co-operate. This has led to fears that regionalisation will simply result in a further layer of bureaucracy and cost. There is concern that the European Parliament, having recently been given new powers, might be reluctant to give them up. There is a history of that happening.
The industry would like to see member states with an interest in regional seas co-operating with regional advisory councils at regional sea basin level to prepare comprehensive management multi-annual plans. The regional advisory councils have been incredibly successful, particularly here in the UK and in other European countries. They must play a vital part in any proposals.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I, too, congratulate my hon. Friend and his colleagues on tabling this motion. It has broad support across the House, not just across the parties but among those who sometimes have differing points of view on EU-related issues. Does knowing that the House is united not give the Government strength going into the negotiations to take the opportunity of what appears to be some movement with the Fisheries Commissioner to get the solution that has been demanded by our constituents and communities for so long?
Mr Doran
My hon. Friend is absolutely right. We have a habit in fisheries debates in sending the Minister off to Brussels with all our support and help. This is not a party political issue; there might be many issues we disagree on, but this is certainly not one of them. The hopefully full support of the House expressed in this motion today is important.
The consultation also proposes a complete ban on discards. Commissioner Damanaki suggests a gradual approach, starting with a limited number of fish species in the ban. The starting point will be in the pelagic fisheries, moving on later to the demersal fisheries. Of course we all want to see a ban on discards, but any proposal to ban them must take account of the reality of fishing. The proposal suggests that the Commission will not budge from its current policy of a species-by-species approach, which ignores the reality of mixed fisheries. Our current science is inadequate and is unable to deal under the current rules with mixed fisheries. A large amount of discards come from those fisheries; what is needed is an ecosystem approach that recognises that many different species of fish—
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Does the hon. Gentleman agree that much of the problem of discards comes from the EU rules themselves, particularly the catch composition rules, which mean that the seven target species are not caught to a certain degree, but so many other kinds have to be dumped as a result that it amounts to absolute madness from the EU?
Mr Doran
The hon. Gentleman is absolutely right. There are many reasons for the high level of discards, and what he suggests is certainly a major one.
What we need is much greater emphasis on the science and particularly on making the science fit the management purpose. We have had more than two centuries of fisheries science, but in the present condition I understand that there is no analytical assessment of around 60% of the stocks in our waters. The science needs to improve, it needs to consider the specific problems associated with mixed fisheries and it needs to inform a sustainable policy. Of course, the Fisheries Commissioner’s proposals will work with some fish stocks, but it will fail—and fail miserably—if the same rules are applied to mixed fisheries.
Andrew George (St Ives) (LD)
In that case, does the hon. Gentleman agree that the practice of taking scientists on fishing vessels should be extended throughout the industry, because it will help to provide the best possible data for the future management of fisheries, especially in circumstances where we cannot distinguish between the intentional and unintentional over-catching of certain species, particularly in the mixed fisheries?
Mr Doran
One major problem with the science is that there is not a close enough relationship between the science and the fishermen. The hon. Gentleman is absolutely right. Other countries such as Ireland do that, and I do not see why we cannot have scientists on our boats and secure much more co-ordination with them. As I say, the science needs to improve, it needs to consider the specific problems associated with mixed fisheries and it needs to inform a sustainable policy. Of course the Fisheries Commissioner’s proposals will work, but not in the mixed fisheries.
Let me say a brief word about the December Fisheries Council meeting. I know that other colleagues will enter the debate on various aspects of the Commission’s proposals, but this is the only opportunity we will have to say something to the Minister about the Fisheries Council in December. As usual, there are many issues on the agenda; let me run through them very quickly. As far as the industry is concerned, the major problems are the pre-programmed effort and total allowable catch reductions required by the cod recovery plan, the mismatch between the science and the Commission’s proposals for 2012 TACs, and the continuing saga surrounding Iceland, the Faroes and the pelagic stocks. I hope that the Minister will deal with all those issues in the meeting.
Ian Paisley (North Antrim) (DUP)
Does the hon. Gentleman agree that the success of this debate and the House’s attitude will be measured largely in December at the Council meeting? If the Council is allowed to ram through another 25% reduction in our total allowable catch, it will effectively put more fishermen out of business and completely ignore the wishes of this place?
Mr Doran
I have two quick points for the hon. Gentleman. The Commission says that it will follow the ethos and philosophy of the recommendations in the consultation document. Yes, there is a mismatch between the science and what the Commission is proposing.
I was about to say that, in the 20 years of my attendance at fisheries debates in this place, I cannot remember a single good word being said about the common fisheries policy. I think that that reflects the views of most of my colleagues here. For a number of years the former Prime Minister, Ted Heath, attended these debates—not to support the fishing industry in Bexley or even to defend the CFP, but to defend his decision as Prime Minister to sign up to the CFP when the UK joined the then European Community. He put up with a lot of abuse and many attacks over the issue, particularly from his own side, but he stood his ground and maintained that the decision he made was in the best interests of the country. The current CFP review gives us an opportunity to argue for a much more radical change to the CFP—one that recognises the past failures of the system and puts in place a CFP that is fit for purpose in the 21st century.
The three issues set out in the motion—regional management, a practicable scheme to end discards and a multi-annual system of management—are a good starting point and we look forward to a positive outcome from the negotiations. In the meantime, there is work to be done at the December Council, and I wish the Minister well.
Mr Speaker
Order. Given the level of interest in this debate, I have imposed a five-minute limit on each Back-Bench contribution.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I congratulate the hon. Member for Aberdeen North (Mr Doran) and my hon. Friends, especially my hon. Friend the Member for South East Cornwall (Sheryll Murray), on securing this timely debate? The Select Committee, which I have the honour to chair, hopes that we might return to debate the work it is currently undertaking on this very subject. I hope that the hon. Gentleman and others will follow the direction of travel of the current EU negotiations, which seems very positive indeed. These are ground breaking and should command the support of all member states. The challenge to the Minister who will be leading these negotiations for the whole of the United Kingdom is to ensure that it is not just the northern member states that support these ground-breaking proposals from the Commission, as it is important for the southern member states to do so as well.
At the outset, I draw the House’s attention to the Select Committee’s initial report, “Implementation of the Common Fisheries Policy: Domestic Fisheries Management”, which was adopted on 18 May. We urge the Government to continue the work to find a market for less popular fish. I am delighted to see that that is part of Commissioner Damanaki’s current thinking. It is also important to implement the excellent work done under the previous and the present Government on “Project 50%”. Fantastic work was done in a short period of time to reduce discards by employing more selective gear. We would like to see that project pushed out widely across English fisheries.
We press for a reduction in discards as a key element in the current common fisheries policy negotiations and we want to ensure that the interests of the under 10 metre fleet are represented in them. There is common ground in what the hon. Member for Aberdeen North said about the eye-watering lack of scientific evidence. We must have the means to improve the scientific evidence before we agree any further round of reform.
I would like to sound a note of caution to the Minister—in a personal capacity, if I may. I think it is misleading for the UK to talk about under 10 metre boats when the European Union talks about under 12 metre boats. Will the Minister address the issue of whether we are disadvantaging our own fishermen in that regard?
In representing the six families who fish out of Filey Coble Landing and all who fish the Yorkshire coast from Scarborough, Whitby and Bridlington, I urge the Minister to reflect very carefully indeed before contemplating for the UK any introduction of a quota for lobster, crab and shellfish. I believe that the Minister is going forward in absolutely the right way by looking at pilot schemes. It has been put to me by the local fishermen that they are excluded at the moment from the cod and other quotas and that they are doing very nicely on a sustainable basis from lobster, crab and shellfish, so they do not wish to see their incomes penalised or jeopardised in any way.
I entirely agree with the hon. Member for Aberdeen North that we have not seen enough flesh on the bones of the Commission’s proposals. That is causing great anxiety. We need to know how the European fisheries fund will be replaced, and in particular how it will apply to active fishermen and coastal communities. I should like to know how the Minister thinks that we will navigate around the legal base, and how regionalisation will work.
This is the first occasion on which co-decision will rule the operation of these ground-breaking negotiations, so let me end my speech on a positive note. I hope for a maximum sustainable yield, an end to discards, and regionalisation of the industry.
Katy Clark (North Ayrshire and Arran) (Lab)
It is a pleasure to speak in the debate. I shall do so mainly on the basis of representations made to me by constituents, especially those who have been actively involved in marine conservation. My constituency contains a very active community-based organisation called COAST, which has campaigned successfully for Scotland’s first no-take zone in Lamlash bay on the isle of Arran. Many of those involved in the campaign come from a fisheries background, or have been involved in marine conservation issues as divers or scientists.
One of the main points that I shall make today is that sustainability—and, indeed, the approach taken by both the Scottish and the United Kingdom Governments to the creation of ecosystem-based marine conservation areas and zones—should be at the heart of our policies. Unless we start to address more seriously and effectively the significant conservation problems that exist in our seas, we will not have a fishing industry in this country. I believe that Members on both sides of the House, and both the United Kingdom and Scottish Parliaments, want a policy that is more effective in terms of sustainability than the common fisheries policy, which, as is well documented, has not been successful in its own terms.
There has been much talk of quotas, and specific species have been cited. Unless we take an ecosystem-based approach and recognise the inter-relationship of different species, we will not solve our problems. The Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), mentioned the lack of scientific evidence, but another problem is the lack of transparency. We need much more information about, for instance, who holds the UK’s fishing quota.
The fishing rights that we have as a country belong to the general public, not to individuals, but I fear that unless we are careful, the proposed individual transferable quotas may lead to the effective privatisation of our fishing rights. I remind the Government that although transferable quotas have worked well in some ways in other countries, particularly the United States, they have also had a devastating impact on many communities.
I represent a part of the world where there used to be massive fishing fleets. Now only six vessels operate from my constituency. The seas have been fished out. We need to state clearly that we have a fishing crisis and a conservation crisis. I hope that the British Government will enter the negotiations on the CFP with an ecosystem-based approach at the top of their agenda, because that is the only way in which we shall be able to create the space that will enable our ecosystem to redevelop. Although we have had a no-take zone for only two or three years in Lamlash bay, we are already seeing an increase in the number of scallops and some species of marine life that have not existed in that part of the world for many years.
I urge the Government to look closely at the Marine and Coastal Access Act 2009, and to bring together policies not just to defend those whose livelihoods depend on the fishing industry, but to ensure that we have a fishing industry in the future, and plentiful supplies in our seas.
Ian Swales (Redcar) (LD)
I want to speak about the local inshore fishing industry in the Redcar area. One of my constituents in particular, Peter Rolph, has drawn the issue to my attention. He lives in Redcar but fishes out of Hartlepool, which a recent Sunday Times article cited to illustrate the problem. Another Hartlepool fisherman, Phil Walsh, told the newspaper that he was allowed to go fishing, but was not allowed to land most of his catch. He said:
“We’re discarding perfectly good cod by the basketful…We’re dumping plaice—we’re allowed only 100 kg of those a month—and haddocks, they’re getting dumped, too. The job’s a mess. The way the quotas are, we’re in a terrible situation. We’re on the verge of bankruptcy.”
I want to talk about inshore fisheries partly because of local interest and partly because the 75% of fishing boats under 10 metres long work inshore, but also because I think that the solution to some of our problems lies in such fisheries. We should bear it in mind that most inshore fishermen have a vested interest in sustainability. They want to go out day after day, and they want their sons and brothers to go out as well. They want a sustainable industry. The problem is the boats that do not care about sustainability: the Spanish trawlers that arrive once a year and take everything in sight. Whatever policies we favour should take account of the inshore industry.
My constituent has explained in great detail techniques that he has developed for targeted fishing—catching particular species—and very clever they are too. That is the way to reduce the number of discards. Because the time spent in nets is so short inshore, the number of dead discards is much lower.
Seasonality is another issue. Both the Sunday Times article and an earlier speaker said that the quotas should take account of the variation that takes place during the year. Specific quotas for the whole year would cause fishermen’s incomes to fluctuate in a way that they could not possibly manage. There should also be more flexibility in regard to the cost of licences. Fishermen need to be able to make a return, and, as we know, many with small boats are finding it extremely difficult to make a living.
I support the plea from my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). We certainly do not need quotas for lobsters, crab and shellfish. Those who put lobster pots out each day do not want to kill off the lobster communities in their areas: they have a clear interest in sustainability.
Localisation is vital. Fishermen in my area tell me that cod are abundant there, but they are simply not allowed to catch them. We all recognise the need to rebuild the cod stocks in the North sea, but that has now been achieved in many areas, and the quotas have not caught up.
I welcome some of the Minister’s recent comments, particularly his comments on inshore fisheries. The solution seems to me to be more and more local management. Local areas know their own ecosystems and have an interest in preserving them as they have a long-term interest in there being viable fisheries for their children and future generations. I hope the Minister will take that into account in any policies he develops.
Ian Paisley (North Antrim) (DUP)
I welcome this timely debate. It is important that we set out some red lines before the December Council meeting so that the Minister is emboldened to make representations there on behalf of our industry, which is very important to coastal towns and villages around the entire United Kingdom.
In October there was a significant displacement of the scallop fishing effort from the Irish sea on to the north Antrim coast because British scallop dredgers had exhausted their area VII effort pot of 2011. That effort pot was agreed in the late 1990s under what was called the western waters regime. Uptake of it has accelerated because a growing number of vessels have diversified into the scallop fishery to escape restrictions introduced in other fisheries, such as the long-term cod recovery plan and the western channel sole recovery plan. Also, the Department for Environment, Food and Rural Affairs is considering recommendations for a chain of marine-protected areas, which would have to be mirrored by the Minister’s colleagues in the devolved Administrations. That could create further displacement.
It is easy to become confused by all these issues, and I do not envy the Minister’s responsibilities in having to deal with what is a huge range of very complex and interconnected areas. Yet, as I heard when I was chairman of our agriculture Committee in Northern Ireland, and as I regularly hear from my colleagues in Parliament and fishermen across the country, there is concern about how the common fisheries policy operates, and people are saying, “Enough is enough.”
The Minister’s website carries a colourful photograph of a fishing boat he saw on his travels. On the vessel’s side there is a picture of a Tasmanian devil, which is represented as a trawler skipper who is being questioned by a fisheries officer. He asks the skipper, “What are you landing today?” The skipper replies, “One box of whiting and six boxes of paperwork.” [Laughter.] We laugh, but we know that our fishing fleet is hampered by red tape and paperwork, and that that paperwork comes from one place and one place only: Brussels. We need to recognise that enough is enough; this has got to stop. We hope the Minister will be emboldened to stand up against the weight of EU bureaucracy that has been created.
Miss McIntosh
I am carefully following the hon. Gentleman’s remarks and I welcome much of what he says. Does he not accept that if we were to introduce a UK register, which I believe the Minister is minded to do, that would cut through a lot of the bureaucracy and we would find out who is fishing in UK waters?
Ian Paisley
That is an interesting proposal, and I shall be interested to hear the Minister’s response; I see that he is writing a note as he wishes to respond to it.
Do we really believe that a solution to the problems of paperwork or discards will be delivered by a commissioner who, in my view, is led by media hype, and by a Commission that, together with the other EU institutions, clearly wishes to exert even more influence over member states?
Mr Nigel Dodds (Belfast North) (DUP)
Given what has been said—and, no doubt, what will be said—in this debate, is it not clear that the common fisheries policy should be at the top of the list of policy areas to be repatriated from Europe?
Ian Paisley
My right hon. Friend’s point hits home with great force given what has been going on recently in the eurozone—or the “euro crisis zone” as it should be called.
There will be support from across this Chamber if the Department goes to Brussels in December and says that the 25% cuts in total allowable catches in the Irish sea alone are no longer acceptable. I hope the Minister succeeds in pausing the implementation of any further cuts in the so-called cod recovery plan and days-at-sea provisions, and the reduction in the Irish sea prawn quota. I hope the Commission will listen to those representations, and that our Minister will be able to bring home from Europe a catch that means our fishermen will be able to fish successfully.
Mr Charles Walker (Broxbourne) (Con)
It will not have escaped your attention, Mr Deputy Speaker, that Broxbourne does not have a rich maritime history. However, I enjoy our seas very much. I have a 16-foot Orkney made by Gus Newman of StormCats on the island of Islay, and a beautiful boat it is, too. I am proud to give him a plug in the Chamber this afternoon.
The common fisheries policy has been an absolute disaster for this country. It has been a failure of politics. Commercial fishing in this country is now almost a minority pastime. In saying that, I do not intend any disrespect to those brave men and women who fish commercially, but the fact of the matter is that over the past 40 years our commercial fishing fleet has been laid low.
Too often, scientific advice about the state of our commercial fishery stocks has been ignored. I know there are concerns about the merits of certain scientific advice. However, legend has it that 100 years ago in the North sea it was possible to stand an axe up on the backs of herring, and, as we know, the North sea was stocked to the gunwales with cod, pollock and other commercial fish. That is no longer the case. Too often, we are removing fish from our oceans and seas before they have had a chance to spawn even once, and that is not sustainable.
In the last Parliament, I and the Minister, my hon. Friend the Member for Newbury (Richard Benyon), served together on numerous Joint Committees considering marine conservation zones. I know Members hold different views about the merits of marine conservation zones, but they do provide a safe place for fish to breed—for fish to restock not only the conservation zone itself, but the seas around those zones.
Fiona O'Donnell (East Lothian) (Lab)
Does the hon. Gentleman therefore agree that today’s written ministerial statement delaying announcements on marine conservation zones for a further six months creates even more uncertainty?
Mr Walker
I know that the Minister faces an enormously challenging job in reconciling the various interests of fishermen, conservationists and recreational fishermen, but, having served with him on those Committees for the best part of two years, I also know that his heart is in the right place. If anyone is capable of doing the right thing and making the right argument and putting the interests of this country first, it is my hon. Friend the Member for Newbury. I doubt anyone in this Chamber could meet a finer man. [Interruption.] Yes, or would wish to meet a finer man.
We must give our seas the opportunity to restock themselves by providing a mechanism for them to do so. If in 100 years or 50 years—nay, in 20 years—we are to continue to have a commercial fishing fleet, then sustainability is essential.
Besides owning a small Orkney fishing boat, I am also chairman of the all-party group on angling. There are many hundreds of thousands of recreational anglers, who spend many millions—indeed, hundreds of millions —of pounds each year in our seaside communities.
Mr Marcus Jones (Nuneaton) (Con)
My hon. Friend is making a compelling argument, but does he not agree that recreational sea angling is far more than just a hobby? Rather, it is an industry that brings £1 billion into the UK economy, and it supports many of the 37,000 jobs that angling creates in this country. Does he therefore agree that our Ministers should work hard to try to protect that industry for the benefit of future generations?
Mr Walker
My hon. Friend makes a fine point. It is estimated that recreational sea fishers spend about £1 billion a year on fishing tackle and staying in the many wonderful seaside resorts and communities around our coastline. Their interests cannot be separated from this debate, because they did not create the problem but they are now living with it. So this debate goes beyond our commercial fishermen and stretches into almost every community in this country, because the hundreds of thousands of people who enjoy our coastline live in every community in this country.
So sustainability must be the key to this debate, but we do need a certain robustness in our dealings with the European Union. Forty years ago, we brought to the party the richest fishing grounds in the world—that is no exaggeration. As was pointed out by my hon. Friend the Member for North Ayrshire and Arran (Katy Clark)—I call her my hon. Friend—too many parts of our seas are now the equivalent of ocean deserts, and that is simply not acceptable. However, we do still have the opportunity to restore our once proud fishing industry to the position that it once occupied. We can do this—it is within our powers—but we must be robust in our dealings with the European Union. Things cannot continue as they have done for the past 40 years. We need to get our act together and we need to sort this problem out while we still can recover the position.
Austin Mitchell (Great Grimsby) (Lab)
I have always thought that the best possible way to reform the common fisheries policy was to come out altogether. Before the previous election that was Conservative party policy and I was sorry to see it changed, although it is still a policy to which the Government are attached. They wish to repatriate powers from Europe, and if ever there was a case for doing so it is in respect of fishing, because the blanket command-and-control policy operated from Brussels, with centrally decided political decisions, is not working, cannot be made to work and has to be ended. That means that we have to transfer power down to the regional advisory councils, which have been very successful, having been established only in 2002. They have been a major success but they need powers to allocate quotas, to impose conservation and technical measures, and to enforce those quotas. That means that they must have not only some fast-track powers of implementation, so that the whole thing does not get held up in the Brussels bottleneck, but the finance and staffing to do the job properly.
Therefore, we must, first, fulfil the rather vague aspiration in the Commission’s own document of transferring powers down to the RACs to give them the control of management. They need to work with the producer organisations; they need to involve the industry in deciding and managing its own fate. That is best done through the producer organisations, by giving them power. They have been very good at managing their quotas in their own areas and that power needs to be extended. If we are to have transferable quotas, as the Commission specifies, there have to be transfers within the producer organisations, rather than sales to foreign owners, as happened so much in respect of Spanish vessels. There needs to be a transfer of quotas within the individual POs so that we keep quotas locally. The producer organisations have to play a part, with the industry taking the lead.
We have to point out to the Minister—I am sure that he is aware of this—that the last vestiges of this command-and-control economy are the Commission’s proposals to cut the quotas, which were mentioned by the hon. Member for North Antrim (Ian Paisley). They are the last vestige of the ancien régime that the Commission is trying for, and they have to be imposed at the December Council. That is because the cuts in the quota that the Commission is proposing do not follow the advice of the International Council for the Exploration of the Sea. ICES says that there should be no increase in quota, but the Commission has translated that into a 25% reduction, which is ludicrous. So, too, is the other proposal, for which ICES does not provide an analytical assessment of what has to be done, that there should be a 15% cut. If that is passed by the December Council and comes into the process of co-determination with the European Parliament, we could be stuck with that decision until 2014, which would be ludicrous. It would be damaging to the industry and it would leave us with a huge cut in domestic fleets.
The Scottish Fishermen’s Federation—the hon. Member for North Antrim has just concurred with this point—calculates that if the proposed cuts are enforced on the white fish and the prawn fleets in Scotland, they will be able to fish for only four days a fortnight. They will not be able to make a profit and they will be forced to lay up. This will decimate our fleet for a goal that is mistaken and has no scientific basis, so it is vital that the Minister overturns those cuts and opposes further cuts as part of the cod recovery plans. Cuts in quota will mean more discards.
I have two other points to make. One is that we have to accept that all fish should be landed, not discarded. The fishermen can be paid a management fee—the cost of landing and marketing, and no more—but that will allow us to record all the catches actually made. Secondly, we need to end the system of buying quota from poor African countries, which is a kind of fishing imperialism, where huge Spanish vessels are going in, damaging the local industry, crushing the local boats, in many cases, and stopping the recovery. There can be management arrangements to assist people in managing their stocks and to help them, but there should be no buying of quota, at our expense, to crush the local industry. The times are better than how they have been portrayed and the stocks are recovering, but now is the time to take a firm stand and get the powers transferred back down to the regional advisory councils to save our industry.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am going to reduce the time limit to four minutes. I want to get everybody in, so I ask for brevity, where possible, and fewer interventions. Where people intervene and then expect to speak, I am going to drop them down the list. Please, let us see if we can get everybody in.
Zac Goldsmith (Richmond Park) (Con)
I strongly support the motion and I congratulate our fisheries Minister on his continued and dogged determination to reform the common fisheries policy—it has not gone unnoticed by everyone who cares about this issue.
I never miss an opportunity to be rude about the CFP, but I am going to restrict my comments to one point. On 12 May, this House unanimously passed a motion calling, among other things, on the Government to restore our control over the 12 territorial miles that surround this country. That was a key part of the motion, but since the EU Commission published its proposals it has curiously slipped off the agenda and out of the debate. I asked the Minister about this matter in a recent letter and his response implied that I, and by extension the House, wanted to achieve this control by removing the historical rights of other countries. I want to make it very clear that that is not at all what I voted for and it is not what the House voted for. Those rights should absolutely be retained, but they must also come with responsibility.
The responsibility on other countries is to adhere to the rules that we set for those 12 miles. So whatever rules we apply to our fishermen must be applied to others. I repeat that we have to avoid the situation, which has been well documented, where we impose laws to protect dolphins and porpoises, and restrict the trawling for bass. Our fisherman, naturally, had to adhere to the rules imposed by our Government, but within days Spanish and French fleets were continuing with the same practices and the effect on porpoises and dolphins was recorded and was depressing.
We have a one-off opportunity, given the huge public demand for reform on an issue that does not normally capture the public imagination, to fight for real change. I simply ask the Minister to remember that the unanimous vote—the unanimous passing of the very radical motion on 12 May—gives him a mandate to be tougher than any of his predecessors have been able to be. So I urge him to take that message with him to Europe and to give the people there a very hard time, as he will almost certainly have to do so.
Mrs Mary Glindon (North Tyneside) (Lab)
I should like to put forward briefly the perspective of our local fishing industry. I was born in the former county borough of Tynemouth, which is now part of the Tynemouth and North Tyneside constituencies. The motto on the coat of arms of the former county borough was,
“Our harvest is from the deep”,
and the coat of arms proudly displayed the figures of a coal miner and a fisherman. Sadly, we no longer have any coal mines and our fishing fleet is very much diminished, but this diminished industry is still important to the local economy and local culture.
The recently formed Northumberland inshore fisheries and conservation authority, or IFCA, has put forward its views on the reform of the common fisheries policy to the Department for Environment, Food and Rural Affairs, after extensive consultation with officers from the Marine Management Organisation and representatives from the commercial and recreational fisheries and the marine science and councillor sectors.
IFCA’s vision is to
“lead, champion and manage a sustainable marine environment and inshore fisheries, by successfully securing the right balance between social, environmental and economic benefits to ensure healthy seas, sustainable fisheries and a viable industry”.
That vision has parallels with the aims of the EU Commission to reform the common fisheries policy. But Northumberland’s IFCA knows from local experience that achieving the vision and reform of the common fisheries policy is subject to practical limitations and it is clear that local factors need to be taken into account.
The area covered by the Northumberland IFCA stretches along the north-east coast from the Scottish borders to, and including, the Tyne. It is a mixed fisheries area, so the aim of achieving a maximum sustainable yield by 2015 would be unrealistic in that area. A more flexible date for that target would therefore be of great help to our fishing industry. Northumberland IFCA also feels that achieving maximum sustainable yield will be crucial to determining multi-annual plans, which, with an ambitious target date of 2015, could create the danger of unnecessary fisheries closures. The emphasis should be on local measures that will ensure sustainable and viable fisheries, such as the lobster V-notching permit scheme and pot limitation, with buy-in from the local industry, which currently operate in Northumberland. The idea of regionalisation cannot be stressed strongly enough, and not only in relation to large areas such as the North sea. Within regions, the specific needs of districts such as the IFCA areas must be taken into account to strike the right balance and involve stakeholders.
I am pleased that the Northumberland IFCA is continuing the interest shown by the former sea fisheries committee in the EU’s commitment to reform the discards policy. However, our fishermen feel that the Government must stress to the Commission that there must be investment in appropriate infrastructure to enable local fleets to dispose of unwanted catch. Technical advances must also be taken into account. The Government should play a role in consumer education to ensure that extra catches that are landed can be marketed more effectively.
Mark Lazarowicz
My hon. Friend’s point about consumer education is very important, because this issue is relevant to others as well as to fishing communities. I think that the number of fishermen left in my constituency can be counted on the fingers of one hand, but this issue concerns the wider community, and that is precisely what is behind this idea—the motivation of communities as a whole to stop the scandal of fish discards.
Mrs Glindon
Yes; the Fish Fight campaign has demonstrated that nationally.
Consumer education would, one hopes, help with marketing the catch that is currently discarded. Ultimately, however, our local fishermen believe that the prospect of a complete end to discards has not yet been set out in sufficient detail to be a viable prospect, and that further debate with the industry is needed.
Livelihoods have been diminished in our fisheries, with resulting economic and social downturns across communities. As the Government are committed to localism, that should be extended to DEFRA’s approach to the common fisheries policy on behalf of our fishing communities. I firmly believe that our prosperity does not depend simply on creating new industries and businesses but on sustaining those that already exist, which are trying hard to survive. It is in the hands of the Government to negotiate a fair deal for the reform of the common fisheries policy, to ensure the future of our fishing communities in a way that meets the vision of IFCA.
Andrew George (St Ives) (LD)
First, I congratulate the hon. Member for Aberdeen North (Mr Doran) and other hon. Members on securing the debate. I strongly support the motion, which highlights the key points in the broad-brush approach of responding to the failure of the common fisheries policy, addressing in particular the problem of centralised management, the need for a more regionally controlled method of eliminating the problem of discarded fish and the need for a multi-annual basis for the future management of the common fisheries policy. Those who, like the hon. Member for Aberdeen North and I, have engaged in these debates over many years will reflect on the degree of consensus that has emerged in the past decade. That will not only strengthen the position but will provide a greater sense of purpose and direction for the Minister. I agree with the hon. Member for Broxbourne (Mr Walker) that not only is the Minister up to the task, but he will have the full support of the House in his work.
I am disappointed that we will not have a further opportunity to discuss this issue, other than today’s inevitably truncated debate. I hope therefore that the Minister will make himself available to the all-party parliamentary group and other groups around the House so that we can discuss the impact of the European Commission’s proposals regarding the future of total allowable catches and quotas around the UK coast.
I want briefly to address two issues, the first of which concerns the Government’s consultation on domestic fisheries and management reform for the under 10 metre sector, which clearly needs to be tidied up and regularised. I have taken a delegation from my constituency to see the Minister about this and he knows that there is significant alarm and concern about the impact that the reforms might have on the under 10 metre sector, not least in relation to the reference period that has been used by the Government for the possible future allocation of quota in forthcoming years.
In the Government’s response to the consultation, which came out a fortnight ago, the Minister announced the intention to try alternative management approaches before introducing far-reaching changes to the current system. The intention is to launch three pilot schemes next year. Having discussed this with fishermen around the coast of my constituency, I know that there is enthusiasm for putting forward the west of Cornwall and the Isles of Scilly as a potential area in which a pilot scheme might be advanced. That could be a means by which the area has some influence over the future development of that policy.
The second issue I want to address is the need to make sure not only that scientists work with fishermen but that fishermen work with scientists. My constituent Shaun Edwards and his crew saved 47 passengers in heavy seas from the dismantled Fryderyk Chopin vessel 100 miles south-west of the Isles of Scilly on 28 October last year. He spent more than 60 hours taking them back to harbour at Falmouth, but sadly lost his job as a result of doing so. He was working for the Centre for Environment, Fisheries and Aquaculture Science as an accomplice fisherman—I think the Minister knows about this case—and that is a great loss to science, as he was assisting CEFAS in its work.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I shall try to keep my remarks brief. I want to make two points about the west coast of Scotland: about mesh sizes in the Minch for prawns and about catch composition, particularly for haddock. There seems to be an abundance of haddock on the west coast of the Hebrides inside the area known as the French line, which is about 100 fathoms or 200 metres deep, and it seems that the haddock are migrating into the Minch and around the prawn fishery. It should be good news that there is an abundance of haddock, but that abundance is becoming very bad news indeed, because EU catch composition rules mean that no more than 30% of catches can consist of haddock, cod or whiting. If a trip catches quite a lot of haddock, what should have been good news is not good news if there are not enough prawns to get that haddock landed, because it is not allowed to make up more than 30% of the catch. In that case, only a fraction of the haddock caught can be landed.
Haddock is abundant and tasty, and many people in Scotland prefer it to cod, but if they cannot get haddock they will eat cod, and that makes the situation worse. The basis of the problem is the cod recovery plan. Surely we should take haddock out of the catch composition rules, particularly for the west coast of Scotland, where many fishermen’s leaders and merchants tell me there is an abundance of haddock. That underlines the silliness, folly and lunacy of the common fisheries policy. The cod recovery plan prevents haddock from being landed, which will probably mean that more cod is eaten. That is almost a comedy, but, as we all know, it quickly ends up in the usual common fisheries policy tragedy.
Fishermen’s leaders on the west coast have expressed concern to me about a potential increase in mesh size in the Minch from 80 mm to 95 mm for prawns, especially as the size increased from 70 mm to 80 mm two years ago. The change would, of course, have catch implications for the smaller community boats, on which many local islanders work. The change should not be made now, just when Scottish Government scientists are undertaking technical trials, and in particular it should not apply to boats with an engine of under 300 hp, due to the disproportionate cost of gear change for them.
The prawn area in the west coast fishery seems to be in balance at the moment; people seem reasonably happy, although they are worried about some of the measures on the horizon, such as the mesh size proposals. However, they feel that there is a major problem with haddock. Ironically, the problem is caused not by a lack of haddock but by an abundance of it. I would be particularly grateful to the Minister if he looked at ways of removing haddock from the catch composition rules on the west coast.
I have participated in many debates on the common fisheries policy and fishing, and I feel that not a blind bit of notice is ever taken of them in Europe. Earlier this year I was in the Faroe Islands for the “Seas the Future” conference with people from Iceland, Norway, the Faroe Islands, Denmark and Scotland. At the end, officials from the EU talked about the CFP. They asked why I was complaining about the CFP in Tórshavn in the Faroe Islands; would I not come to talk to them in Brussels? It occurred to me that surely there are places besides this Parliament—democratically elected places—where the common fisheries policy is discussed, but are we talking into a vacuum? Surely we should have people in this Chamber listening, at least, to the complaints that Members of all parties express about the common fisheries policy. What actually happens is that one person leaves this Chamber, meets people from other chambers, and ends up having to horse-trade on the common fisheries policy. Ultimately, as we have seen over the years, fishing has been the loser.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you for inviting me to speak, Mr Deputy Speaker. I congratulate hon. Friends from across the political divide on this truly excellent motion. My constituency hosts one of the principal fishing ports in the south-west. Plymouth is a global leader in marine science and engineering research. Our fishing industry is very much part of that, and part of our maritime heritage. I am delighted that the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), is working so hard to protect the industry’s interests in Europe.
Last month I received an extensive briefing from the Plymouth marine laboratory. People there explained to me how plankton—the staple diet of our fish—is being lost from our seas. When my hon. Friend is next in the south-west, I would be delighted if he came with me to meet people at that laboratory, and to see that excellent research facility.
My local commercial fishermen face real challenges. They are concerned about the marine protected areas, and the quality of evidence being offered to my hon. Friend by his statutory advisers at Natural England and the Marine Management Organisation. Two weeks ago, in an Adjournment debate secured by my hon. Friend the Member for South East Cornwall (Sheryll Murray), I raised my concerns about the lack of transparency in the evidence-gathering process. All MPAs should be based on sound evidence, and the research should be of the highest quality.
I thank the Minister for commissioning from Dr Graham-Bryce an independent review of the process used to gather the evidence. Dr Graham-Bryce confirmed in his July report that
“the process used…fell short of best practice in many respects.”
Will my hon. Friend tell the House what progress the Department has made in ensuring transparent, robust processes? Will he confirm that any effects of displacement from MPAs will be covered fully, and that the work will be conducted by professional personnel?
Another incredibly important issue is scallop fishing. The scallop-fishing industry is an important export market that brings much-needed revenue and jobs to the Plymouth travel-to-work area. I am told that it is worth about £20 million. Recently, for the first time, western waters area VII was closed to UK vessels for scallop fishing. The area has recently been reopened, but problems and challenges remain. I hear that the UK has been at risk of reaching the kilowatt-days limit since 2009, which is before my hon. Friend took up his post. Will he explain why local fishermen were only recently alerted to that? Will we make sure that they are looked after much better, and have much more notice, in future? They can certainly be flexible, but they cannot quite turn on a sixpence immediately.
I have never missed an opportunity to call on my hon. Friend to press for the UK’s fishing waters to come back under the UK’s control. I urge him to carry on pressing for that, and for reform of the EU fisheries policy. That is the only way to make sure that we conserve and protect our fishing stocks and our industry.
Ms Margaret Ritchie (South Down) (SDLP)
For my constituents in the fishing ports of Ardglass and Kilkeel, the reform of the common fisheries policy is a somewhat distant process. That is not to say that they do not recognise the importance of the subject, but in what has become for many a struggle to survive, the common fisheries policy and the accompanying rules and regulations are matters for policy development in Brussels. What is vital to those in the industry, their families and the wider community in both fishing towns are issues to do with quota allocations, limits on days at sea and fuel bills. Those are the immediate priority, and they require resolution.
We have heard from the Commission that decisions made now should fit in with the spirit of what the new common fisheries policy will deliver. Given the current proposals for fishing opportunities in 2012, it is easy to conclude that that does not bode well for the future. The Commission’s failure to address the flaws in the long-term cod recovery plan, and the intention of imposing more of the failed medicine prescribed in that plan, which involves ill-thought-out discard policies and an inability to recognise the significant contributions made by many of my constituents to ensuring sustainable fisheries in the Irish sea, do not appear to reflect a Commission willing to surrender its centralised decision-making powers and make provision for the devolution or transfer of power to the regions.
On the other hand, the European Commission argues that it is precisely its light touch with regard to the detail of the Green Paper that signals its intention to allow the regions to decide their own management regime, within the broad framework of rules in the new common fisheries policy. In that context, who are we to believe? Is it the individuals, including some in the Commission, who offer up European Union treaties as the reason why any meaningful decentralisation is illegal? Or it is those who yearn to be regarded as the voices of reason within the Commission, and ask for our trust? For me, so far the evidence suggests that it is the former, although I want it to be the latter. I welcome the fact that the Minister is to respond to the debate, and I suggest to him that it would be helpful for the House to learn the Government’s legal opinion regarding the degree of decentralisation of the common fisheries policy that is possible after the Lisbon treaty.
I say to the House, and the Minister in particular, that for my constituents involved in the fishing industry—onshore and offshore—in Ardglass and Kilkeel in South Down, the industry is vital to their livelihood and their families, and to the wider community. It is a multi-million-pound industry that has to survive. I ask the Minister, in the negotiations, to do all he can to ensure that the fishing industry in the Irish sea is sustained for this generation—and, hopefully, for future generations.
Neil Parish (Tiverton and Honiton) (Con)
I congratulate hon. Members from all parts of the House who helped to secure this debate, especially my hon. Friend the Member for South East Cornwall (Sheryll Murray), who takes a particular interest in fishing.
May I tell the Minister to be careful of the European Commission bearing gifts? He must look that gift horse in the mouth, as he will find that the proposals on devolving powers to regional advisory councils and others are short on detail. When the Select Committee on Environment, Food and Rural Affairs took evidence on this issue, the producer organisations for the south-west were convinced that there were no real powers coming from Brussels, and that things were going the other way. I know that the Minister fights hard for British interests, and I commend him for doing so, but we have to introduce much more local control over fishing so that the fishing industry and people going out to fish have the ownership of conservation measures and are keen to see them work. At the moment that is done far away in Brussels, and if fish are saved in one member state the fishermen there will be convinced that someone else from another member state will come along and take them away. However, there is no proposal to devolve those powers at present.
Sarah Newton (Truro and Falmouth) (Con)
My hon. Friend is making a good point. Does he agree that it is important to include in the balance the needs of recreational fishermen? In my constituency, for generations, people, including me, have enjoyed going out with their fathers and their grandfathers to catch fish to eat at home?
Neil Parish
My hon. Friend makes a good point. A year or two ago I went to Falmouth, where we were trying to secure more help for sea anglers, who play an important part in the fishing industry, not only by catching fish but by bringing people down to Falmouth, the west country and other parts of the United Kingdom, where they stay in hotels and so on. The value of a fish caught by an angler can be a great deal more than that of a fish caught by a professional fisherman. I know that the Minister takes that dimension very seriously.
I want to discuss the change in fishing gear and the 50:50 process in Devon, where discards have been reduced by 50%, which is good news. Until we ban discards and land everything that we catch, how do we know what there is in the seas? Up to 2 million tonnes of fish throughout the European Union are discarded every year, which is a huge waste of resources, and means that we never quite know what the stocks are.
I welcome the Commission’s proposal on landing fish that is not fit for human consumption, suggesting that it should be made into fishmeal to be fed to farmed fish. However, I question its proposal on the landing of fresh fish, which would be kept and distributed to poor people throughout Europe—not that I am against poor people throughout Europe and the UK having fish, but the idea that the Commission will organise that in every port in the EU, especially in the UK, fills me with horror. Some of those proposals need to be considered carefully.
Of course we should ban discards—I know that the Minister has done a great deal of work on this, as have celebrity chefs—but about 70% of the fish landed in Newlyn harbour goes straight in a lorry to Spain, because we do not eat that type of fish. The more fish we can eat in this country, the more we can keep the fish that we land.
We all feel strongly about the issue of the under 10 metre fleet, and the Minister is looking at ways of getting a better share for that fleet, which is essential to the south-west community, including Devon. It is key that those family-run boats have more fish to catch because, in the end, there is a limited amount of fish in the sea, and we must make sure that there are options for that fleet. I look forward to what the Minister can offer us, because in the end, the sea and fish resources have to be shared out between all the fishermen.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I do not think that we could make this debate more timely if we tried. Negotiations to reform the CFP are under way, and it is vital that the voices of the fishing communities that we represent are heard in this debate.
The challenges that we face need to be seen in the context of a common fisheries policy that has systematically damaged our marine ecosystem for 30 years. It has eroded the livelihoods of fishing communities and fishermen, and it has been applied inconsistently in different EU states. There is a growing consensus, even in the House, that a decentralised approach offers a better way forward than the one-size-fits-nobody approach that we have at the moment, as it would allow coastal states to develop workable solutions and, crucially, it would allow the expertise of fishing industry leaders and other local stakeholders to come to the fore.
In my view the reform process will stand or fall on the strength of the regionalisation proposals, but it is not clear how regionalisation will work in practice, given the treaty constraints raised by the hon. Member for South Down (Ms Ritchie). I hope that the Minister will spell out the mechanisms and processes that are under consideration and how they might be made fit for purpose, because there is a great deal at stake for our fishing communities.
There is a great deal to be learned from the experience of regional advisory councils on the value of long-term planning and the need to bring fishing industry representatives into the decision-making process. There is a great deal, too, that we can learn from the efforts of our fishermen in recent years to put the industry on an environmentally sustainable footing. The Scottish fleet has been at the forefront of efforts to push alternatives to discarding, but when we discuss discards it is crucial to remember that they are a direct consequence of the impositions put on fishermen by the failed CFP. No one gains from discards.
In that respect, the catch quota pilot schemes in Scotland and England have shown real potential. They were trialled to see how good they were at cutting discards and improving the economic viability of vessels, and they have been extremely effective. So far, however, only a relatively small number of vessels have been able to benefit from them. More boats could benefit, and I urge the Minister to prioritise the issue with our international partners, particularly the Norwegians and the European Commission, and drive it forward so that we can expand the catch quota system and build on the success of the model across the EU.
The Scottish fleet has been more successful than any other European fleet in ending discards. Catch quotas are only one factor in that success: the conservation credit scheme, using selective gear and real-time closures, is the thing that has really made a difference by improving the sustainability of our fisheries, as has longer-term planning and sound science. Too often, science has been used to justify policy making of dubious quality, and it has sometimes been used as a blunt instrument. It has been made to say what policy makers want it to say. There is now widespread recognition that good science and sound scientific data are beneficial to everyone, but if we want to build trust in scientific data we have to use them consistently. When the scientific data show that stocks are healthy and fish are plentiful, we need commensurate increases in total allowable catches. The forthcoming Council meeting could not be more timely, as we should not have more quota cuts if the science says that that is not necessary.
Consistency is required. I have concerns about transferable fishing concessions, as the Commission is now calling them.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I urge the hon. Gentleman to think before intervening. He has already made a speech, and we are running out of time. More Members have indicated that they wish to speak. It is up to the Member in charge but, to be honest. I would be disappointed if the hon. Gentleman intervened.
Dr Whiteford
I shall move on, Mr Hoyle.
Exaggerated claims have been made about the benefits of transferable quota schemes. Some are more successful than others. The proponents tend to ignore the unintended consequences, especially for fishing communities—a point that was made earlier—but the key factor is improved governance. I therefore urge the Minister to look carefully at that. I welcomed his comments last week on this, and I urge him to—
Mr Deputy Speaker
Order. We are struggling for time, and if Members shrink their speeches so that everyone who wishes to speak can do so, I shall be very happy.
Sheryll Murray (South East Cornwall) (Con)
I have cut my speech from about eight minutes to three or four, but I cannot fail to pay tribute to the Royal National Lifeboat Institution, the coastguard and the Fishermen’s Mission, as well as all the families of fishermen who have been lost or injured at sea this year.
I am on record saying that my ultimate goal for fisheries is to restore national control, but that debate is for another time, and for another Minister. Turning to the motion that we are debating, I shall deal first with regional management. There is no scope in the treaty to achieve the transfer of decision making to regional level. The National Federation of Fishermen’s Organisations has suggested that member states co-operating with regional advisory councils at sea area level to prepare multi-annual management plans could result in de facto regional management. Will the Minister please explore these alternative routes with the NFFO?
On the 12-mile limit, there is a case for ending the 40-year-old access rights. We see from the regulations that France has access to 15 areas within our territorial waters, Ireland to two areas, Germany to six, the Netherlands to three and Belgium to five for a variety of species, whereas the UK gains access to two areas within German waters and one area within French waters. This is not fair. I have even heard that some Belgian vessels working in the Bristol channel have changed from beam trawling to demersal twin rigging to work inside the 12-mile limit. Some of these could be Netherlands- owned Belgian-registered flag of convenience vessels. Exclusive access to the 12-mile limit could help the under-10 metre fleet.
I welcome the move to ban discards, but that is not as simple as it may seem. May I have an assurance from the Minister that he will work with the industry so that a proper solution can be found? Banning discards must not destabilise the market.
I shall briefly mention transferable fishing concessions. The UK, the Netherlands and Denmark already operate a similar system, which has been shown to control effort, but this was always preceded by decommissioning. Does the Minister agree that for a system of transferrable fishing concessions to work, there needs to be substantial decommissioning beforehand?
This is the only chance that we have to raise the 2012 quotas. I welcome the move by the Commission to abandon the 25% compulsory reduction in stock, but I must point out that this could exacerbate the annual horse trading that takes place.
Let me make one last point about the waters off my own constituency. Any reduction in cod effort in the Irish sea, the west of Scotland or the North sea could serve to displace effort into area VII e and g, and disadvantage Cornish fishermen.
Finally, in 1991 I was widely quoted as telling a previous fisheries Minister that British fishermen were brave, honourable, hard-working men who deserve respect. My words are as true today as they were when they were first spoken. I am pleased that we have a Minister who has already shown that he shares my sentiments. I wish him well in the negotiations, and I hope the whole House will support the motion today and give him our full backing for the important and difficult task that he will be engaged in over the coming months and years.
Jim Shannon (Strangford) (DUP)
One good thing that the CFP managed to do was to unite all the fishermen, fishing bodies and elected representatives in opposition to a policy that has reduced the ability to make a living on the sea and continues to squeeze life out of the fishing sector. There will be no mourning its loss by anyone I know or have come into contact with.
Much has been made of the issue of decentralising or regionalising fisheries management, which I agree would be a positive step forward. The hon. Member for Great Grimsby (Austin Mitchell) and others have mentioned that, but there are those in the European Commission who suggest that post-Lisbon it is illegal to decentralise any meaningful responsibilities to the regions. Therefore, although I fully support the motion and join in the call for the Government to ensure that particular provision is made for regional management, I too would like to hear what the Minister believes is legally possible and how we can achieve that collectively. What discussions are being held with the legal experts to ensure that what is tantalising uncertainty will become cold, hard reality?
Last Saturday I held an advice surgery in Portavogie. The fishermen come to meet me with their list of things that they want me to do every month. They are concerned about the increase in bureaucracy, the changes in the net mesh size, more paperwork, more cost, more policing, more monitoring and less fish catch. All those are key issues for the fishing industry.
Northern Ireland’s fishing industry has instituted measures that have been introduced voluntarily which have cut discards of haddock and whiting by over 60%, yet go unrecognised by the European Commission—nobody in the European Commission seems to have any idea what is going on. As with most other good points concerning the fishermen, if the scientists have not marked it in their book, it could not possibly be happening. If the 25% cuts go ahead, the white fish sector in Northern Ireland is finished for ever. I know the Minister will be batting for us in the meetings in December.
Locally, to address the issue of discards, our fisherman have had to incorporate various EU-legislated panels in their nets, which did little, if anything, for discard reduction, before they could deploy the gear designed specifically for use in the Irish sea. So it was true—the net designed by our fishermen, which would have reduced discards, was effectively outlawed by Europe. That concerns me.
On 10 November there was a meeting to impose emergency technical conservation measures in western waters. I am told that national Administrations will have little input into the process, which is politically driven by the EU’s Greek Fisheries Commissioner. Let us be honest: if we pair the word “Greek” with the words “Fisheries Commissioner”, we can understand why fishermen’s knees are knocking.
The industry, like fisheries managers, has as a goal the reduction of unwanted catches to a minimum, but the fishing industry will not be made greener by driving it into the red. We must be honest about what we are doing. In a little over four weeks the Minister will be leading the UK team at the EU’s annual December Fisheries Council. I urge him to support the industry at home.
Finally, the three-point plan for the Irish sea is clear. There should be a pause in further implementation of the long-term cod recovery plan. We should secure a rollover on the area VII nephrop TAC, which has been successfully managed for more than 40 years and remains stable, and we should seek an increase in the Irish sea herring quota, a stock which is at its largest for 18 years. It is time our fishermen saw some reward for the sacrifices they have made in the face of the EU’s ever-moving goalposts. I support the motion and urge the Minister to do his best for the fishermen in Northern Ireland, as I know he will.
Peter Aldous (Waveney) (Con)
I had intended to talk about discards and the local management of fisheries, but as the points that I would have raised have been well made by other Members, I shall move quickly to my final point—securing a fair deal for the under-10s.
At present the under-10 metre fleet is treated poorly—as a second-class citizen comprising 85% of the national fleet, but with access to only 4% of the UK quota. The fleet needs to be enfranchised and we must move away from the current system of quota control that lacks flexibility and transparency. The Minister has commendably put forward proposals for the future management of English fisheries. He is right to attempt to do what most of his predecessors have put in the “too difficult to tackle” category. I commend him for introducing the pilot scheme that will operate from January.
However, there is a real concern that a rights-based method of control is not in the best interests of the under-10s. The problem is that there is no easily defined starting reference point on which to base a fair allocation for them. There is also the worry that globally there is evidence that rights-based systems do not work and quickly result in the loss of quota for the inshore sector. The evidence from Denmark is contradictory at best.
I commend Jerry Percy, now fishing in Wales but originally from Lowestoft in my constituency, for responding constructively to the consultation and coming forward with NUTFA’s—the New Under Tens Fishermen’s Association—proposals, which provide a way forward for the under-10s. The phrase, “If you can’t beat them, join them” springs to mind, but he is right to propose a dedicated inshore producer organisation.
I conclude by saying that there are three considerations on which the future management of domestic fisheries should be built. First, there must be recognition that quota is public property. Secondly, we must replace the current system whereby no one appears to know who holds quota with a transparent system—a register of holdings. Finally, quota should be only in the hands of working fishermen.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I need to bring the Minister in at 2.50 pm. I call Kelvin Hopkins.
Kelvin Hopkins (Luton North) (Lab)
I shall be brief. Hon. Members will have seen the Library’s Parliamentary Office of Science and Technology note 357, citing a European Commission report that stated that 88% of European fish stocks were being fished beyond sustainable levels and 30% of stocks were close to collapse. I have been quoted before as saying that this is an unmitigated disaster and these figures prove it. The only effective solution is to seek the abolition of the common fisheries policy and return fisheries to member states. All talk of reform at this stage is mere tinkering at the margins.
I welcome the motion, but it does not go far enough. The UK already has opt-outs in a number of EU areas, such as the euro and Schengen, so surely we could negotiate a simple opt-out for the CFP. If we cannot, we should tell our European partners that we will withdraw unilaterally from it in, say, three years’ time. We have much more to gain than they have to lose, because our fisheries are among the largest in the EU and the restoration of a 200-mile limit, or a 50% limit where there are adjacent countries, would solve the problems for us, certainly for our fishermen and for our fish stocks.
I had wanted to say much more but realise that time is short. I urge the Minister to mention in his negotiations that Members of this House are calling for the abolition of the common fisheries policy and will do so until we get it.
Fiona O’Donnell (East Lothian) (Lab)
I begin by congratulating my hon. Friend the Member for Aberdeen North (Mr Doran) on securing the debate and all Members on both sides of the House who have spoken. I realise that many did not speak for as long as they had hoped to, but they all did the right thing by speaking up for their fishing communities. I pay particular tribute to the hon. Member for South East Cornwall (Sheryll Murray). Anyone who knows her even a little will not have been surprised by the courage and passion she has shown in the debate.
There is clearly significant cross-party support for a debate on fisheries before the EU Council meeting in December, and I welcome the opportunity to speak about it today. It is widely accepted that the current CFP has failed to achieve its objective of ensuring that the fishing industry is environmentally sustainable and economically viable for the benefit of society now and for future generations, as the hon. Member for South Down (Ms Ritchie) said.
My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) spoke about marine conservation zones and referred to a conservation crisis. I hope that the Minister will apologise to the House and to all the stakeholders who took part in the consultations to identify marine conservation zones for yet another target that DEFRA has not been met. It really is not good enough. On the day when we are appealing to stakeholders to take part and contribute—[Interruption.] The Minister asks me whether I really want to go there. It would perhaps have been easier to go there if the scientific advice that he claims supports the decision had been available at the time. I hope that he will at least give us an explanation when he comes to the Dispatch Box. I also thank the Environment, Food and Rural Affairs Committee for its contribution to the debate and look forward to its report.
Sheryll Murray
Does the hon. Lady not appreciate that getting marine conservation zones right for our fishing industry is far more important than meeting artificially set deadlines?
Fiona O’Donnell
Getting it right also requires political leadership, which has been sadly lacking from the Minister on this matter. What we have instead is more uncertainty and delay for the fishing sector, which is not welcome.
Food security has not featured heavily in the debate, so I want to take the opportunity to mention it. In Europe we are eating more fish than ever before. We have hit an historic peak and the projections for the next 30 years show that consumption will continue to rise. With the EU already importing two thirds of its fish and growing demand in big markets such as the US and China, the reforms must address the issue. I hope that the Minister will address that when he comes to the Dispatch Box.
Reform is long overdue, as all Members have said—it is one concern that unites the House. That is the hope, but as ever the devil will be in the detail and in how strongly the Government argue and negotiate for UK fisheries and use regionalisation to respond to the needs of fishing communities. We support the reform process and stress the need for a strong voice for the interests of UK fisheries and a clear move away from the top-down management and control that pervades the current CFP.
I have no hesitation in acknowledging the hard work and commitment of the Minister in engaging with the devolved Governments and with stakeholders. It is essential that the UK has the strongest possible voice in these negotiations. I read yesterday that the Secretary of State is bending over backwards in representing the interests of the UK in reform of the common agricultural policy, but where is she on CFP reform? Can the Minister assure the House that the Secretary of State is fully engaged and will perform similar political contortions to get the best possible deal for the UK on fisheries reform? It would also be helpful if he put more flesh on the bones of his negotiating position. Four months on from the publication of the Commission’s proposals, does he have a clear view of what he wants to come out of CFP reform, which of the proposals he agrees with, and which he wants to strengthen? I am aware that the impact assessment closed only last Thursday, but can he update us on its progress? Any information would be welcome.
I would like to turn to some of the key areas of the reforms set out by the Commission. Regionalisation is a key element of the new CFP, as the hon. Member for Tiverton and Honiton (Neil Parish) and my hon. Friend the Member for Great Grimsby (Austin Mitchell) mentioned. The current top-down approach has failed to achieve its objectives. Radical reform is necessary. The new CFP must ensure that fisheries management is dealt with at the most appropriate level. Without genuine decentralisation of fisheries management, it is difficult to imagine that sustainable management will be achieved. To that end, I welcome the proposals for multi-annual plans devised by member states, which the Commission intends as a central tool for ensuring that fish stocks are kept at sustainable levels and achieve maximum sustainable yields. It is vital that the Minister works closely with stakeholders in that process.
The collaborative approach will be particularly important in the plans to eliminate discards under the basic regulation within the multi-annual plans. In some EU fisheries 60% of catches are discarded. Discarding is a symptom of the poor management and practice of the current CFP. Much of the focus of the current proposals is on landing all catches of the main commercial species, but there is a real danger that discards overboard will become discards ashore.
Mr John Redwood (Wokingham) (Con)
Given that all previous Governments have not wanted that policy but failed to get rid of it, does the shadow Minister have any idea how the Minister will be able to do so?
Fiona O’Donnell
I am sure that the Minister will be glad to answer that question, but I will say that what we are seeing now is a phased-in approach on three levels, which gives us a real opportunity. I share concerns that Members have voiced in the debate on how we can achieve that, but that is not an excuse for a lack of political leadership in achieving the aim.
The Commission’s proposals place a legal duty on the UK to implement a tradeable system of quotas, known as transferrable fishing concessions, which some Members have touched on. They have raised concerns in other debates and argued that we should not end up with a situation in which a vast share of our concessions is in the hands of a few and multinational organisations can buy up the rights to our national resource. There is a proposal that member states should maintain an accurate register of holders of transferrable fishing concessions. Does the Minister support and welcome those plans for transparency, and what preparatory plans and assessments have been undertaken by his Department? Has he come to a view on the transfer of concessions to other member states?
My hon. Friend the Member for North Tyneside (Mrs Glindon) spoke about reaching maximum sustainable yield, and like her I have concerns about how we achieve that, given the nature of our mixed fisheries. The scale of the challenge must not again be an excuse for a lack of political will from the Government in driving forward to achieve maximum sustainable yields wherever possible by 2015. Ensuring that decisions are based on the best possible data and scientific advice requires Government agencies and the Government to work with fishermen, and as the hon. Member for Banff and Buchan (Dr Whiteford) mentioned, there is good practice in the pilots in Scotland to build on.
I am pleased that my hon. Friend the Member for Great Grimsby mentioned external waters. It is proposed that fishing partnership agreements will be replaced with sustainable fisheries agreements, which will put more emphasis on achieving the aims of the CFP outside EU waters. I welcome the new legal framework introduced by the Commission to ensure that European fishermen fish responsibly, but there is another concern relating to employment rights—perhaps not the Government’s strongest cause—which I would like to raise with the Minister. We know that on EU vessels there are many workers from developing countries and there is concern about their employment rights.
Fiona O’Donnell
I am afraid that I must press on, as I have little time remaining.
I want also to mention—last but by no means least—the under 10 metre fleet and how pleased I am that so many Members have made the case for it today. We wait to see how the pilots work, but I hope that the Minister will draw on the experience and skills of the co-operative and mutual movements in making them a success.
Fish are not territorial; they move across borders and seas, as do fishing fleets. As the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), recently remarked, “Fish do not wear Union Jacks”; and nor do they wear Scottish saltires, and that is why we need a common fisheries policy and a single strong voice speaking up for UK fisheries.
The measures under discussion look set to form the biggest shake-up of the CFP in its history, and the Commission’s proposal shows a welcome shift from annual decision making to longer-term management plans and ecosystem-based decisions, with policies that pledge to raise all fish stocks to a sustainable level by 2015, to stop discarding, to offer improved consumer information on the sustainability of seafood and to impose rules that offer financial support to environmentally sustainable fisheries.
I wish the Minister and the Secretary of State well in their negotiations, and I commend the motion to the House.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I commend the hon. Member for Aberdeen North (Mr Doran) and his colleagues on the all-party fisheries group for bringing this issue to the House, and the Backbench Business Committee for supporting it. This debate leads on well from our debate in May, which my hon. Friend the Member for Richmond Park (Zac Goldsmith) brought to the House, and if Members support the motion they will give me and the Government a mandate to continue our work to introduce some common-sense reform to a failed policy, and to take forward proposals that will greatly advantage the industry and our marine environment.
I should like to take this opportunity, however, to recall the six fishermen who have lost their lives this year in the line of their work at sea and in the harbour. We must remember the courage and sacrifice of individual fishermen, who put their lives in danger to bring food to our tables. Today is especially poignant, given our memory of Neil Murray, the husband of my hon. Friend the Member for South East Cornwall (Sheryll Murray), to whom many Members have referred, and I know that the House will wish to join me in sending sincere condolences to all those families and friends who have suffered losses.
I shall try to cover as many points as I possibly can. I shall not be able to cover them all, but at this vital time, as we move toward the December round and, of course, through the wider CFP reform negotiations, I remain absolutely willing to meet the all-party group of the hon. Member for Aberdeen North and any other groups of hon. Members.
The hon. Gentleman talked about the manifest failing of the common fisheries policy and found a ready audience in the House and, certainly, with me. He spoke about discards, as did several hon. Members, and it is important that our reforms on discards—I think that these were his words—reflect the reality of fishing. It is absolutely vital that we do so on a stock-by-stock, sea-basin and species-by-species basis and secure a workable result that delivers not just what the 700,000 people who signed up to the Fish Fight campaign want, but a sustainable solution for the fishing industry.
The hon. Gentleman spoke about the landing of black fish, and let the House be absolutely clear: those who land fish illegally are stealing fish from their fellow fishermen, so it is absolutely vital that we do all we can to crack down on that practice. He spoke also about regionalisation, as did a great many other Members, and about the welcome addition of the regional advisory councils in the 2002 reforms, and I absolutely agree that that is the basis on which we should talk, using a sea-basin approach to the management of our fisheries.
I want to see regionalisation work, but I concede the concerns, raised by hon. Members from all parties, that regionalisation in its current form could lead perversely to an increase in the Commission’s powers. That is not what we want, and we will push very hard to ensure that regionalisation is effectively that.
The hon. Gentleman and several others raised another point, about the proposed cuts in the December round to those stocks where there is data-deficiency. We won a very important argument in the Baltic round of negotiations last month, noting that the arbitrary 25% or 15% cuts on the basis of a lack of evidence was completely illogical. It results in more discards, in poverty and in people going out of business, and we won that point. It remains on the table for the December round, but the principle has been won and we will drive it home, because it is really important.
My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, made a very important point when she spoke about her Committee’s desire to see more work on marketing less popular fish. DEFRA is doing that. We set up the “Fishing for the Markets” project, and among other things we are undertaking a land-all scheme in North Shields. Indeed, we have been doing so for a long time—for well over a year—and it is paying dividends. As Members have pointed out, 54% of discards are nothing to do with quotas; they are species that are not eaten in this country.
Richard Benyon
If my right hon. Friend will allow me, I will not, because I have only five minutes and a lot to get through.
My hon. Friend the Member for Thirsk and Malton mentioned the lobsters and brown crabs off the coast of her constituency, and I assure her that we are thinking again about that issue, because we want to ensure that we carry people with us and our measures work.
The hon. Member for Redcar (Ian Swales), my hon. Friends the Members for South East Cornwall, for Waveney (Peter Aldous) and others spoke about the under 10 metre plan, as did the hon. Member for East Lothian (Fiona O'Donnell), who spoke for the Opposition.
Richard Benyon
If my hon. Friend will forgive me, I really do not have time.
The important thing is that those reforms really work. A lot of work has gone into the issue, not just by this Government, I am first to concede, and the three pilots will be taken forward. My hon. Friend the Member for St Ives (Andrew George) said that there is enthusiasm in his constituency, as there is around the coast, to ensure that they work, and we are recruiting coastal liaison officers, who will assist people not only with managing their fishing opportunity or quota, but with marketing their catch and getting a better price for what they land.
Richard Benyon
I am sorry, but I shall not give way.
The hon. Member for North Ayrshire and Arran asked about marine conservation zones, and that represented the one note of discord in the debate, but I think that I can address it precisely. The hon. Member for East Lothian, who leads for the Opposition, asked me to take forward proposals on which there is no scientific basis or not enough of one to sustain them, but that position was not taken during the lengthy hours of debate, in Committee and on the Floor of the House, about provisions that became the Marine and Coastal Access Act 2009. Neither the Wildlife Trust nor anyone else took that position. What we will do—[Interruption]—and the hon. Lady would do well to listen to this—is obtain the evidence so that we can take forward an ecologically coherent network of marine conservation zones. I assure her that it will be something of which she can be proud—and so can we.
The hon. Member for North Antrim (Ian Paisley) spoke with concern about the displacement effect of scallops, and he is absolutely right: our management of one area of the seas will impact on another. I assure him that I take that issue very seriously.
We secured a review of the cod recovery plan a year ago, and I—naively perhaps—thought that it might have manifested itself by now, but unfortunately there will be dramatic cuts in days at sea unless we can improve it.
I am grateful to my hon. Friend the Member for Broxbourne (Mr Walker) for his praise. There is a terrifying hidden threat when Members are nice to Ministers, because they are saying, “If you fail, boy do you fail” but I take his comments at face value and absolutely assure him that recreational sea angling is key to what we want to do—not just because of the enjoyment that it provides, but because of its social and environmental benefits and what it does for coastal communities.
The hon. Member for Great Grimsby (Austin Mitchell) mentioned the 25% and 15% cut, but I hope he is reassured that we are going to fight it. On the point that my hon. Friend the Member for Richmond Park made, I intend to get more management control out to 200 miles. With the marine conservation zones, it is vital that we get buy-in from the European Union, otherwise we might have the perverse case of conservation zones that are just for fishermen from the United Kingdom, not for those on vessels that fish from other parts of the EU.
Member states must be able to work regionally to develop management plans and to implement measures that are appropriate to their fisheries, but currently the proposals lack crucial detail on how regionalisation will work. I understand that there are legal constraints to devolving power, particularly to the regional level, but proposals must enable nations fishing in the same areas—often for the same fish, as Members have said—to come together and agree on how to manage their fisheries.
This debate is, of course, also important for allowing us to set out clearly that our partnership with fishermen, both in terms of science and how government works, is vital. This is a critical time for fisheries management and I am sure that the House shares my commitment and enthusiasm to take this once in a decade opportunity to overcome the structural failings of the CFP. It is a long and challenging road ahead, but the UK has a major role to play in influencing the new policy and, with negotiations under way, progress is being made.
However, there is a lot more we can and must do to deliver the reformed CFP that we want. We need continued engagement with the European Commission, other members states and the European Parliament to exert maximum influence throughout the negotiations. We also need to continue working closely with NGOs, fisherman, retailers, processors and others with an interest in fisheries and the marine environment to secure a policy that will deliver a real change for the future of fisheries and the marine environment. I hope that hon. Members will continue to support the Government’s view that fundamental reform of the CFP is required. I fully support the motion.
Mr Doran
With the leave of the House, may I say that we have had an excellent debate? I am deeply sorry to those who were not able to contribute. We seem to have had half an hour taken off our debate because of the urgent question. In the 20 years or so I have been attending fisheries debates, this is the one in which there have been the most speakers, which clearly underlines the importance of the issue we have been discussing.
The message to the Minister is loud and clear: we support radical reform. That has come from all hon. Members’ contributions. The Minister can go to the negotiations in December and in 2012 in the full knowledge of that support. He can afford to be brave. The Commission has put very little meat on the bones, but that could be an opportunity. He can be brave and bring the radical reform that we all want to see.
Jim Shannon
On a point of order, Mr Deputy Speaker. Last year, this debate took place in Westminster Hall and lasted for three hours. The request was made to have the debate here in the House, to which everybody could contribute. Will the Deputy Speaker consider the process and the time scale, because we thought we were going to have a three-hour debate here as well?
Mr Deputy Speaker (Mr Lindsay Hoyle)
I understand the feeling running through the House today. A lot of Members wanted to contribute and the debate has had to be cut short. I am sure that that will be taken on board for future debates.
Question put and agreed to.
Resolved,
That this House considers that the Common Fisheries Policy has failed to achieve its key objective of producing a sustainable European fishery; welcomes the review of the policy by the European Commission; and urges Her Majesty’s Government to ensure that a revised Common Fisheries Policy makes particular provision for—
(a) a move away from a centralised management system to a system of regional management of fisheries involving all stakeholders and strengthening of the local management of the 12 mile limit;
(b) a manageable and practical scheme to eliminate the problem of discarded fish; and
(c) the replacement of the current system of annual quotas with a multi-annual system of management focussed on conserving fish stocks within a sustainable fishing industry, in particular to protect the viability of low impact fishing.
Royal Assent
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Localism Act 2011
Education Act 2011
Fuel Prices
(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have to tell the House that no amendments have been selected.
Robert Halfon (Harlow) (Con)
I beg to move,
That this House welcomes the 1p cut in fuel duty at the 2011 Budget, the abolition of the fuel tax escalator, the establishment of a fair fuel stabiliser and the Government’s acknowledgement that high petrol and diesel prices are a serious problem; notes that in the context of the Government’s efforts to tackle the deficit and put the public finances on a sustainable path, ensuring stable tax revenues is vital for sustainable growth; however, believes that high fuel prices are causing immense difficulties for small and medium-sized enterprises vital to economic recovery; further notes reports that some low-paid workers are paying a tenth of their income just to fill up the family car and that high fuel prices are particularly damaging for the road freight industry; considers that high rates of fuel duty may have led to lower tax revenues in recent years, after reports from leading motoring organisations suggested that fuel duty revenues were at least £1 billion lower in the first six months of 2011 compared with 2008; and calls on the Government to consider the effect that increased taxes on fuel will have on the economy, examine ways of working with industry to ensure that falls in oil prices are passed on to consumers, to take account of market competitiveness, and to consider the feasibility of a price stabilisation mechanism that would work alongside the fair fuel stabiliser to address fluctuations in the pump price.
I would not be here today without the 116 MPs from all parties who have signed the motion; the many other Members who have Government posts who would have liked to have signed it; the 110,000 people who signed our e-petition; The Sun newspaper’s “Keep it Down” campaign; the FairFuelUK group led by Quentin Willson, who is in the precincts of Westminster today and who has been one of the leading campaigners for lower petrol prices; and Peter Carroll supported by the Daily Express. I also want to thank the Backbench Business Committee and its excellent Chair, the hon. Member for North East Derbyshire (Natascha Engel). Above all, I want to thank my hon. Friend the Member for Cleethorpes (Martin Vickers) who has been instrumental in helping me to secure this debate and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) who I am pleased will be summing up. I want to consider why fuel duty is the No. 1 issue in Britain. I also want to talk about the financial impact, the economic impact and, finally, the social impact.
With the agreement of FairFuelUK, today’s motion has been framed to unite the House and to win as much support as possible. As I said, that is reflected by the fact that 116 MPs from all parties have signed it so this has been successful. Last week, a poll in The Sun showed that 85% of people now believe that the duty rise in January should be cancelled. Other polls show that people are more concerned about petrol and diesel prices than anything else. We have the highest diesel price in Europe and one of the highest petrol prices. The Government’s figures show that sales of petrol and diesel have been falling since 2008 because fuel is becoming unaffordable.
Mr Lee Scott (Ilford North) (Con)
Does my hon. Friend agree that another problem is the difference in price of the same brand at different garages? At one garage on a motorway, we could see £1.50 a litre and, locally, we might see £1.29 a litre. Surely that is also a big problem.
Robert Halfon
I agree with my hon. Friend. Often if someone is driving up the M11—as I often do—or any other motorway, they are hostage to the various petrol stations. As I will say later, we need a market study into competitiveness.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Does my hon. Friend agree that rural areas, such as Shropshire, where there are limited bus services, are adversely affected by these expensive prices?
Robert Halfon
Absolutely. I welcome the fact that the Government are going to introduce pilots in some rural areas. I know that people will talk more about that today, but I thank my hon. Friend for his remarks.
In real terms, adjusted for inflation, motoring fuel has never been this expensive, apart from twice in history during historic crises of supply—Suez in 1956 and the OPEC strike in 1973. The current situation is being driven by higher taxes and we have to be realistic and truthful about who pays the lion’s share of fuel duty: it is ordinary families driving to work, mums taking their children to school, small businesses that cannot afford to drive vans or lorries, and non-motorists who depend on buses and who are also being crushed by rocketing food prices as the cost of road haulage goes through the roof.
Tony Cunningham (Workington) (Lab)
The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) mentioned restricted bus services. Can I tell him that in large parts of Cumbria and other rural areas, there simply are not any bus services and people have to use their cars?
Robert Halfon
The hon. Gentleman is absolutely right. I was pleased to bump into him on holiday in Cumbria not so long ago. In certain areas, we cannot simply say, “People should use public transport.” People depend on their cars.
Brandon Lewis (Great Yarmouth) (Con)
I thank my hon. Friend for being so generous with his time. He mentioned small businesses. Coach companies in places such as Great Yarmouth are also affected. That affects the local economy because current prices make it difficult for them to have the money to invest further in their business and create more jobs and bus services for people locally.
Robert Halfon
My hon. Friend is exactly right. Later, I will show that transport firms are closing because of the high cost of petrol and diesel. His constituents are lucky to have him to represent them. As I said, small businesses have no choice but to use their vans and lorries, and non-motorists depend on buses and are being crushed by rocketing food prices.
Robert Halfon
Let me just carry on for a bit.
The jobless, who are struggling to get off benefits and out of the poverty trap, cannot afford to drive to work. Fuel duty is a tax on hard-working and vulnerable Britons. I accept that the Government need to raise revenue, but let us at least be honest about who pays this tax. When fuel duty was first introduced in the 1920s, it was a third of its current level in real terms. However, as ever, tax increases have had the engine of a Rolls-Royce but the brakes of a lawnmower. The fuel tax escalator was introduced in 1993. Labour then accelerated it to 6% above inflation, and it was finally halted in November 2000, when massive fuel protests brought the country to a standstill. That was when petrol was just 80p a litre.
Ian Paisley (North Antrim) (DUP)
Like everyone else, I welcome this debate. Does the hon. Gentleman accept that rural areas and the regions of this nation—places such as Northern Ireland—have the lowest salaries per worker but the highest fuel costs? That means fuel pricing has a disproportionate impact on people living in those parts of the United Kingdom. Importantly, Government taxation policy is encouraging fuel fraud, fuel laundering and fuel smuggling, meaning that the Exchequer is losing hundreds of millions of pounds each year.
Robert Halfon
As ever, the hon. Gentleman hits the nail on the head. He sets out how fuel prices are creating a more unequal society.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Further to the point raised by the hon. Member for North Antrim (Ian Paisley), does the hon. Gentleman agree that this disproportionate taxation is absolutely unjustifiable for people in rural areas who have no choice but to drive, particularly those in poorer households and small businesses?
Robert Halfon
I absolutely agree with the hon. Lady, and I thank her for coming with me to the Backbench Committee to try to get this debate.
Robert Halfon
A lot of people want to speak, so I do not want to take too many interventions.
The coalition Government abolished the fuel escalator—we welcome that—and cut duty by 1p. They also introduced a semi-stabiliser, which means that duty will rise quicker than inflation only if oil prices are low for a sustained period. Thanks to this, motorists will pay £274 less on fuel duty during this Parliament than if the previous Government had been re-elected and stuck with their plans—but for most people filling up the family car, our prices are still the most expensive in Europe. Even bankrupt socialist nations such as Spain now have lower rates of fuel tax than Britain.
Albert Owen (Ynys Môn) (Lab)
I congratulate the hon. Gentleman on securing this debate. Does he acknowledge that in January there was a hike in VAT that affected individual motorists right across the country?
Robert Halfon
I am glad that the hon. Gentleman raises that. The majority of businesses that are suffering from fuel prices get their VAT refunded. Sadly, as I mentioned, the last Labour Government increased the fuel escalator by 6% ahead of inflation. When we cut fuel taxes in the last Budget, Labour Members voted against it.
Research has shown that residents in my constituency of Harlow are now paying £42 million in fuel taxes every single year. However, tax is not the only problem. There are suggestions that some of the big oil companies are behaving like a cartel, with a stranglehold over the market. Brian Madderson of the Retail Motor Industry Federation says that the small forecourts that he represents are now forced to buy fuel from the big players at a set wholesale price on a daily basis rather than on weekly or monthly terms. There is no competition from wholesalers on these terms. The Enterprise Act 2002 gives Ministers powers to ask for an independent market study, and that is what we need.
Another factor is that fuel prices are quick to rise but sluggish in coming down.
Neil Parish (Tiverton and Honiton) (Con)
Devon has as many roads as the whole of Belgium. We have very low wages, and many rural people are affected by fuel prices, in particular. There is also the question of diesel for lorries. Everything that goes by lorry uses diesel, so what about reducing its price in the way that it has been in many other countries?
Robert Halfon
My hon. Friend will be pleased to know that I prefer Devon to Belgium. Of course, he is exactly right.
In the past four months, the price of oil has fallen by 8% but fuel prices have stayed static. Oil firms protest that they are forced to buy raw materials in dollars and that currency fluctuations have made price cuts impossible, but analysis shows that this is false. The cost of Brent crude has fallen by nearly 20% since April this year, and yet the dollar has just risen by 6%.
Robert Halfon
Let me carry on for a moment.
Big oil firms should not hide behind currency fluctuations. Statistics from the UK Petroleum Industry Association, which is funded by the major oil companies, show that in early 2010 the price of crude oil fell steadily, and yet retail fuel prices stayed high for months. Why was that? Ultimately, the only way to resolve this is through open-book accounting. If the big oil companies want to prove their innocence, why do not they volunteer to publish the financial data?
I want to turn to the financial impacts. Since 2008, our consumption of diesel and petrol has declined, and the Government forecast that it will continue to plummet next year.
Tim Farron
My hon. Friend is being unfathomably but characteristically generous with his time. He says that consumption has gone down. Does he agree that consumption in rural areas has probably gone down as far as it is going to? Demand for petrol is so inelastic because people have only one way of getting to work, and that is by driving, even if they are on the minimum wage. This is now no longer an issue of environmental concern—it is about social justice.
Robert Halfon
I am pleased to say that I was also in the constituency of my hon. Friend for my holidays; it is such a wonderful part of the world. There is absolutely no doubt that fuel prices are threatening rural communities and preventing people from meeting and gathering together. Petrol is now so astronomically expensive that it is driving people off the roads and costing the Exchequer money.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are not meant to be waving around the Chamber, Mr Carmichael. I am sure that you have already caught Mr Halfon’s eye.
Neil Carmichael
I wanted to invite my hon. Friend to Stroud for his holidays, as well, if he has not already been. If he does come, he will see that we have a large number of road haulage firms that are very concerned about the price of diesel. Of course, they are having to pass that on to small and medium-sized firms, which, in turn, means difficulties for them. We need to understand that and give further strength to his case in this House.
Robert Halfon
My hon. Friend makes the point better than I have; I completely agree with him.
In the run-up to this debate, lots of people came to me and said, “We all want lower fuel duty, but how can we pay for it?” In fact, this is back to front. Evidence suggests that we are on the wrong side of the Laffer curve and that lower taxes might increase revenues. The Government’s own figures show that between January and June this year 1.7 billion fewer litres of petrol and diesel were sold compared with the first half of 2008. The AA has done its analysis and says that this equates to £1 billion in lost revenue for the Treasury. As the Chancellor said earlier this year, we must put fuel into the tank of the British economy, and cutting fuel tax is the way to do it. The economic impact of this is disastrous. The ex-Tesco boss, Sir Terry Leahy, told The Sun:
“I don’t think people fully appreciated what an oil shock we’ve had. Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways.”
As some of my hon. Friends have said, UK haulage companies are being driven out of business as they face higher taxes here than in nearby countries such as Ireland, with which we share a land border. To their credit, the Government have taken some action, and foreign lorry drivers are now charged up to £9 a day to use our roads. But still the insolvency firm SFP has said that three quarters of transport business failures in the last year have been caused by excessive fuel prices.
Fuel prices are adding to our dole queues. In 2006, when petrol was just 95p per litre, experts at the London School of Economics published research showing that unemployed workers who could not afford to drive or to commute to jobs stayed unemployed for longer. Since then, fuel prices have surged by 40%, despite the recession, and many workers have suffered from redundancy or wage freezes. The Government are working on a rural fuel duty rebate for remote outer islands such as the Outer Hebrides and elsewhere. This is welcome, but it will help only a tiny number of motorists.
Tessa Munt (Wells) (LD)
I should like to add my comments to those of my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron). I want particularly to draw attention to the fact that young people in my constituency, which is very rural, are limited in their choice of education because there are no bus services to speak of, and they are sorely tested in trying to get to their schools and colleges if they choose to use a school outside their area. This was highlighted even more by the fact that they brought transport—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. This is far too long an intervention. We want to get through a lot of Members who wish to speak. Some people are trying to intervene who wanted to catch my eye early on, and I will put them further down the list if that carries on. I want to get as many people in as possible.
Robert Halfon
I understand and agree with the sentiments expressed by my hon. Friend the Member for Wells (Tessa Munt). I am grateful to her for supporting the motion and for backing me at the Backbench Business Committee.
Robert Halfon
I will not give way again because of what Mr Deputy Speaker has just said. I apologise to my hon. Friend.
I will turn to the social impact. In Harlow, the cheapest unleaded petrol costs £1.33 per litre. Most Harlow motorists are therefore spending £1,700 a year just to fill their tanks. For most people, that is the equivalent of £2,200 of income before tax—a tenth of the average Harlow salary. I met a Harlow man called Mr Barry Metcalf a few weeks ago. He is self-employed and uses his own car to commute to West Ham for work. He spends nearly £60 a week on fuel and has seen a 35% increase in the past year or two. The Government define fuel poverty as spending a tenth of one’s income on heating bills. What about spending a tenth of one’s income just on driving to work?
Of that £1,700, about £1,000 is taxation. That is why fuel duty is like a second income tax. The Office for National Statistics confirmed yesterday that fuel duty is regressive and that the poorest are hit twice as hard as the richest. Fuel duty is not just about economics; it is an issue of social justice. That is especially true in rural communities, which are being destroyed by fuel prices.
In conclusion, there is a strong financial, economic and social case for cutting fuel taxes. That is why we urge the Government to scrap the planned 4p fuel duty increases that are scheduled for January and August 2012; to create a genuine price stabilisation mechanism that smoothes out fluctuations in the pump price; to pressurise the big oil companies to pass on cheaper oil to motorists; and to set up a commission to look at market competitiveness and radical ways of cutting fuel taxes in the long term. There is an ethical case too. We must show that tax cutting is a moral creed. We must show that this is a Government for the many, not for the few; a Government who cut taxes for millions of British people, not just for millionaires. I urge the Government to listen to the 116 MPs who have signed the motion; to the 110,000 people who have signed the FairFuelUK e-petition; and to the many millions of families, small businesses and pensioners who are struggling with fuel costs. I urge the House to support the motion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind the House that there is a four-minute limit on speeches. Members should restrict the amount of time that they use wherever possible. Brevity will be helpful in this debate.
Mr Dave Watts (St Helens North) (Lab)
I am sorry that my amendment was not selected by Mr Speaker, because I believe that the motion is wishy-washy. I will explain the reasons for that later. My amendment went into some of the details that need to be addressed to help hard-working families.
Like many Members, about four or five weeks ago I started to receive letters from constituents on this issue, mainly prompted by the FairFuelUK campaign. At the time I wrote back to my constituents to tell them that I could not support the campaign because it called for tax cuts without saying how they would be paid for. I have little time for campaigns by the Daily Mail, the Daily Express, FairFuelUK or the TaxPayers Alliance, which are extreme right-wing organisations that promote tax cuts at the expense of public services.
However, I have now changed my mind after speaking to some of my constituents. There is no doubt in my mind that high fuel prices are having a tremendous impact on many low-paid and middle-paid families in my constituency. It is clear that the Government have no idea about the impact that high fuel prices are having on many constituents around the country. It is also clear that they have no understanding of the impact that wage freezes, high inflation, tax increases and high unemployment are having on the general public and the economy. Many of my constituents will have no pay increase for two years. Prices go up in the shops virtually every week. Heating and petrol prices are a particular problem for many of my constituents, and many of them are struggling to stay afloat.
The second reason I support the campaign is the decision by the Liberal Democrats and the Tories to raise VAT to 20%, which has had a massive impact on the cost of living and on my community. It has made the situation worse. We have now had a flatlining economy for 18 months and unemployment is at a 17-year high. Those who believe that the motion will address those issues are sadly mistaken. What we need is a complete review of economic policy in this country, taking on board something like the Labour plan for jobs and growth. Unlike Labour, the Government parties have no policies for growth. Labour’s policies of providing 100,000 jobs for young people, bringing forward investment in major projects and schools, a temporary reversal of the VAT rise—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We need to stick to fuel prices.
Mr Watts
I am sticking to them, because the people promoting the motion believe that it will address their constituents’ problems. We have heard many Members talking about the impact that high fuel prices are having on their constituencies. I know that to be the case, but it is only part of the problem that people face on a daily basis. We need a review. At the last election the Tories promised to cut fuel costs and to stabilise them in the immediate future and the long term.
Many families depend on cars to get themselves to work and to deliver their children to school—
Mark Garnier (Wyre Forest) (Con)
Speaking as somebody whose combined family mileage approaches 50,000 miles a year, and as a Member who represents a semi-rural constituency, I am acutely aware of the burden placed on local households by fuel prices. The cost of fuel does not just affect those who use cars; it affects everyone through food prices and prices on the high street, and it affects those who use public transport.
Some argue that if we want to move towards a more sustainable economy, high fuel prices will encourage a greener outlook. I do not disagree with that. However, when we are doing everything we can to improve our economic prospects, now is not the time to allow rising fuel prices to limit the mobility of our work force and hinder manufacturers and retailers through increased transport costs.
Mr Mark Spencer (Sherwood) (Con)
Does my hon. Friend agree that young people in particular feel the pressure of high fuel prices when they are trying to find their first job, which is often low paid? Does he also agree that the cost of insurance adds a burden to young people who have to get to and from employment?
Mark Garnier
My hon. Friend raises a very good point. The cost of car insurance is unbelievably high for young people. That is a particular problem when they are trying to get on the job ladder. We should certainly be doing everything we can to help young people.
The price of oil, as we have heard, is determined by commodity markets as well as by the sterling-dollar exchange rate. The only way to control pump prices is therefore through fuel duty. However, the country has incredibly little room for manoeuvre. I am convinced that helping economic growth through tax breaks works, especially when those tax breaks are targeted at specific areas such as fuel duty.
A cut in the price of fuel at the pump would reduce manufacturing and distribution costs, increase the mobility of our work force, increase household disposable income and lessen, overall, the headwind facing our economic recovery. Taking into account the work that we are trying to do in Kidderminster to promote advanced manufacturing and help boost the retail industry, I would welcome any reduction in costs, including fuel and transport costs. However, given where our economy is, any reduction in fuel revenue would have to be met by an increase in revenue elsewhere. Everything that the Government do has to be fiscally neutral. We simply do not have the resources available to cut fuel duty significantly without putting in jeopardy our low borrowing rates, which mean that we are in greater control of our own destiny than some of our European neighbours.
Although I support the efforts that the Government have already made in cutting 1p off the fuel duty in March and suspending the fuel duty escalator—a reduction of £1.9 billion in fuel duty—I urge them to see whether more can be done to help. The rising price of oil leads to increased profit for the oil companies from existing oilfields, as we have heard, and that extra profit gives the Government more opportunities to look again at tackling the high pump price of fuel, either through encouraging price reductions by the oil companies or through the tax system.
What has recently been causing a great deal of anguish among my constituents is that it costs more to run a car in Wyre Forest than in nearby Dudley. The average of 134.8p per litre of unleaded is about 6p higher than in Dudley, just 10 miles up the road. I have written to the petrol companies to see whether they can explain why they want my constituents to pay more for their petrol than people in nearby Dudley or Wolverhampton. Just one has taken the trouble to reply, to say that it has received my letter, but I have had no other replies, and certainly no explanation as yet.
It is right that we are debating the overall cost of fuel duty to our economy, and it is right that we are looking for ways of reducing that burden. However, I want the oil companies to explain why they see fit to charge my constituents in Wyre Forest more for their motoring. Can they justify subsidising more urban areas, not just in the black country but in the country as a whole, at the expense of our semi-rural and rural communities? Can they please let us all know when they intend to remove that rural surcharge on fuel?
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to follow the hon. Member for Wyre Forest (Mark Garnier). I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, and I was one of those who signed the motion and helped him to do so. I believe that the motion is a little broad and weak in its application, but I understand the reason for that—securing this debate.
I wish to talk about two main issues to do with how fuel prices hit peripheral areas—not just isolated communities but other areas on the periphery. They suffer from a double whammy of high energy costs—particularly for those who are off the grid and have to pay for heating oil and liquefied petroleum gas—and having to pay more for their petrol.
Road journeys are a necessity in communities such as the one that I represent. We are not talking about Chelsea tractors or luxury vehicles; we are talking about the necessity of getting from A to B in rural and semi-rural areas, where alternatives do not exist. If the hon. Member for Harlow were to come to my constituency, along with the hon. Member for Crewe and Nantwich (Mr Timpson) and others, he would see the price differences as he moved west from Chester to Anglesey. Only yesterday, the difference was 7p per litre of petrol, and far more for diesel. We need to do something about that.
I welcome any reduction in fuel duty, for which I have campaigned for many years, but the March reduction was wiped out by the January VAT increase. That was a real problem for real motorists. I understand what the hon. Member for Harlow said about businesses reclaiming VAT, but ordinary motorists were unable to reclaim that extra 2.5 percentage points.
Andrew Miller (Ellesmere Port and Neston) (Lab)
My hon. Friend knows that fuel prices go up when he travels westwards from the Chester area to his constituency. However, there are also people in urban areas who are trapped by fuel prices, such as the lady who came to see me at my last surgery, who has to travel to Liverpool for medical treatment and also has to travel regularly to Bolton to see her daughter, who is in a mental health hospital. Such people need support, and some of them live in urban areas. I am sure he would not want to exclude them.
Albert Owen
Sure—and I was not making a rural versus urban argument, I was talking about peripheral areas, particularly those far from refineries. Indeed, I want to talk about British refineries. Quite often, crude oil from the North sea is actually refined in faraway countries and brought back here, which adds cost. We therefore need to improve our refinery capacity in this country, to keep prices down.
I welcome the fact that the escalator has been done away with. It was introduced in 1993, perhaps for good reasons: it was felt that people could move from private to public transport. However, in semi-rural areas that is just not possible. That is why motorists have been enraged by the rise in the escalator. It went up, I think, by 5% under the Conservatives and 6% under Labour.
The Government could deal with VAT now. We can talk about the effect that a semi-stabiliser would have on North sea oil and the prices at the pump, but the Government can take measures now to reduce VAT to help motorists today. When the previous Government lowered VAT from 17.5% to 15%, fuel prices came down, helping to stimulate the economy. [Interruption.] They did. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) is laughing, but he needs to compare the prices. Prices came down and businesses were able to trade more. Individuals could also use their cars more, and not just for work but for leisure. [Interruption.] The hon. Gentleman says from a sedentary position that fuel duty went up, but the calculation shows an overall saving to the motorist at the pump, and that is what we are talking about. We can argue the complicated and technical aspects, but at the end of the day people want lower prices at the pump.
Toby Perkins (Chesterfield) (Lab)
Government Members may well be laughing too, but people in Chesterfield are not laughing, because they are paying through the nose. It is not just the general public who are affected by the current level of VAT. Small businesses up and down the country that are not VAT-registered and do not qualify to get their VAT back are paying huge amounts. We should not be laughing about this; we should be taking the point seriously.
Albert Owen
I am grateful to my hon. Friend. The Government need to look again at changing the rate, because it worked. If we in this House are serious about stimulating the economy, we need to look at such mechanisms—which can be used now—because the economy is flatlining.
Areas such as mine are paying extra for energy and fuel, and we need to do something about it. We had a debate the other week about energy prices, and we agreed that we needed to investigate what is called the “rocket and feathers” effect—that means that when prices go up they shoot up quickly, but when they come down they come down slowly—for domestic energy users and retailers. As the hon. Member for Harlow said, we also need to look at that effect in relation to crude oil prices, which also escalate quickly but come down slowly. We need some sort of commission to examine that mechanism.
The three points that I wanted to make today are as follows. We need to look at the differentials between areas close to refineries and those on the periphery. I understand that a rebate is being considered for remote islands, but, as has already been said, that does not help the many motorists around the coastal areas of the United Kingdom who are paying considerably more. I heard one of my colleagues from Northern Ireland say that Northern Ireland has higher prices, but according to the website that compares prices, Bangor in north Wales pays 3p or 4p a litre more than Bangor in Northern Ireland. I say good luck to the people who live in Bangor in Northern Ireland, but my constituents are paying 7p a litre more, week in week out, to trade, to do business, to move people and goods across the area and to take young children to amenities and leisure facilities of a night.
It is time the Government did something. I will back them when they do the right thing. They can consider whether more could be done on refineries. We need to look at transport costs and VAT, and we need to help the people today.
Mr Alan Reid (Argyll and Bute) (LD)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his campaign to secure today’s debate.
I represent a sparsely populated constituency where long drives for essential business are common, so I am well aware of the impact of high fuel prices on individuals and businesses. For example, the price of fuel on some of the larger islands in my constituency, such as Mull and Islay, is typically about 15p to 20p a litre higher than in a city centre supermarket, and on the smaller islands, such as Coll and Colonsay, the price is usually about 30p a litre higher. It should be stressed that this is not because of profiteering by the local filling stations. The reasons for the higher prices are low turnover, compared with all the fixed costs that a rural filling station has to pay, and the costs of the distribution network. The costs of fuel distribution in the highlands and islands are very high, and I hope that the Office of Fair Trading will investigate them.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I understand exactly what the hon. Gentleman is saying about Coll and Colonsay, but he will know that a newspaper on Coll and Colonsay costs the same as in the city centre. Should the Government not move towards more parity and equality between islands such as Coll and Colonsay—or, indeed, Na h-Eileanan an Iar—and city centres?
Mr Reid
I agree with the hon. Gentleman, and I hope that he will give credit to the Government for what they are doing on fuel duty on islands. The high price of fuel obviously has a great impact on people’s living standards, and makes it difficult for anyone trying to run a business on an island or in a remote rural area.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
My hon. Friend is making the important point, which has come out again and again in the debate, that people in remote rural areas in constituencies such as ours have no choice but to use a car. Does he agree that, in the long run, the Government will have to look at a system of variable road user pricing that is based on the choices available and that will enable essential users to pay a lower price?
Mr Reid
I certainly agree with my hon. Friend.
There has always been an environmental argument for higher fuel prices, in order to persuade people to use public transport rather than a car. That argument works fine in a city with plenty of bus and train services, but it falls down completely in a rural area, and particularly in a remote rural area such as Argyll and Bute, where in places there is a bus service only on school days. That might be okay for getting schoolteachers to and from work, but it is no good for anyone who needs to be at work outside school hours. The advantage of road user pricing would be that more could be charged for driving on city roads, with a much lower price for driving on a remote rural road. The problem with fuel duty is that it is a blunt instrument, in that the same level of duty is charged in all parts of the country, irrespective of whether public transport alternatives exist or not.
Mr Reid
I am sorry; I have used both my interventions.
To go back to the point made by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), I was delighted when the Government announced their intention to pursue a pilot scheme whereby there will be a 5p a litre fuel duty discount for those on many of the country’s islands, including all those in my constituency. That reduction will go part of the way towards removing the price differential between fuel on the islands and fuel on the mainland. I hope that the scheme will be up and running soon, and I ask the Minister to give us an update at the end of the debate on how the negotiations are going in Europe. I am sure that the pilot scheme for the islands will be successful; if it is, I would like it to be extended to remote parts of the mainland. Operating a rural filling station is clearly not a profitable business these days. On the Kintyre peninsula, two of the five filling stations that the area had at the start of the year have closed.
There was a time when it could be argued that high fuel taxation was needed to discourage people from driving and polluting the environment, but market forces have already achieved that. The environmental argument for high fuel duty is not sustainable in the present circumstances. The high price is already discouraging people from driving, and they are making only journeys that are absolutely essential. Changing people’s behaviour is possible only when public transport alternatives are available, which is simply not the case in the highlands and islands.
I was also delighted when the Government abandoned Labour’s fuel duty escalator in the Budget, introducing the fuel duty stabiliser instead and bringing down the fuel duty because the price was so high. The Government have scheduled a fuel duty increase for January, because it was hoped at the time of the Budget that prices would have decreased by then. Prices show no sign of coming down, however, so I hope that the Government will listen to everyone who has signed the motion and spoken in the debate, and not proceed with the January fuel duty increase. The price of fuel adds to the price of everything in a rural area. The high cost is holding back economic recovery, so anything that the Government can do to bring the price down would be greatly welcomed in all rural parts of the country, and particularly in the highlands and islands.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I too want to thank the hon. Member for Harlow (Robert Halfon) for securing the debate today. Like many others in the House, I have received a multitude of e-mails supporting the FairFuelUK campaign. Expectations in my constituency and right across the country are very high indeed, and I think that some people are expecting fuel prices to fall at 7 o’clock this evening, on the back of this debate. That is not going to happen, however, and I have had to make my constituents aware that the wording of the motion will not provide a quick fix to the problems that they are facing.
Let me quickly raise one or two issues. Crude oil today is less than $115 a barrel; in 2008, oil was $147 a barrel. We have to ask about market speculation and what it is doing to the price of fuel and thus to our constituents. Like others who have spoken this afternoon, I represent a rural area, where people often have off-grid heating. That means they suffer more, not just from having to fill up their vehicles.
Heather Wheeler (South Derbyshire) (Con)
Do people in the hon. Gentleman’s constituency suffer as we do in South Derbyshire from fuel thefts, which are common in rural areas? This applies to heating oil in particular, but transport companies also have their stocks of oil stolen regularly, and yet the police do not seem to be able to trace them.
Mr Brown
Dumfries and Galloway constabulary is first class at tracking and tracing thieves. The hon. Lady is absolutely right. We often face this situation when the value of the product rises and people try to steal heating oil and all the rest of it. People have to heat their homes, whether it be with heating oil or liquefied petroleum gas, and they also have to use their vehicles. In some locations, there is no other form of transport whatever. For some, there is a bus until 5 or 6 o’clock in the evening, which can be very difficult when people need to travel a distance to visit other family members or friends in hospital. A car is thus an absolute necessity for many households.
We are seeing price differentials and we are certainly seeing them with some supermarkets. I am not going to name the supermarkets on this occasion, as the last time I mentioned just the word “supermarkets”, two or three of them were quick to write to me to express their anger. Supermarkets drive the price in our local communities: prices tend to fix around what local supermarkets are bidding from their customers.
Here we are getting towards the back end of the year and we see another price differential between diesel and unleaded petrol. The difference has gone up from what it was in the late summer—about 2p or 3p a litre—to up to 6p, 7p or 8p a litre today. I recognise that lies partly with the refineries, but surely in this day and age more investment should be forthcoming so that the price differential does not create an even greater problem for those who have decided to drive diesel vehicles.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
My hon. Friend is setting out the complexity of this issue. Does he agree that, given that complexity, the simplest way to relieve the pressure on families and businesses would be temporarily to reverse the rise in VAT?
Mr Brown
My hon. Friend is exactly right, and I was about to come on to that point. That was the most significant single increase of the last 12 months. The increase in VAT drove up the price by some 3.2p a litre. We could give families that amount back if we took off the extra 2.5% on VAT. I ask the Economic Secretary to consider that measure temporarily. My other plea to her and her Treasury colleagues relates to future increases in the pipeline, as outlined in the Budget. I sincerely hope that she and her colleagues will listen to what we are saying this afternoon, as we do not want the proposed increases finding their way through. She should be bold, as the previous Government were bold. That Labour Government took some flak on duty increases, but there were 11 occasions over nine years when the Labour Government either froze, postponed or totally abandoned increases that were in the pipeline because the price of crude oil was rising.
I sincerely hope that some Department will speak to the oil companies about what we are witnessing. I come back to the speculation going on in the marketplace, which is hurting our constituents and hurting businesses, particularly small businesses. I realise that because those who are VAT-registered will get the VAT back, any reduction will not affect them, but others are being hurt very badly. Like other Members, perhaps, I know of people in remote areas who have discovered that travelling to work is becoming far too costly, and some of them are considering giving up work altogether.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that immediate action is required to stimulate economic growth, and that we need a Government who will respond to what is happening?
Caroline Nokes (Romsey and Southampton North) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on the persistence that enabled him to secure this important debate.
The issue that we are discussing does not affect only rural constituencies. I am very conscious that 75% of the constituents who have contacted me come from the more urban parts of the constituency. The truth is that everyone is affected by rising fuel prices. Nevertheless, a disproportionate burden has been placed on those who live in rural areas. In parts of my constituency, people have no choice but to use their cars. Those who live in remote rural villages travel, on average, 10,000 miles a year just to gain access to essential services. One constituent told me, “This is not about luxury. I leave home for work before the first bus arrives in the morning, and I return long after the last one has gone back to the depot.” He has no choice whatsoever.
However, it is not only those who use their cars for their own journeys who are affected. We should also consider those who act as volunteer drivers and support charities, an increasing number of whom tell me that they are finding it too expensive to continue to help the community in that way. We should be thinking about ways of supporting them. Although they welcome the increase in the Chancellor’s approved mileage allowance, they say it is becoming increasingly difficult for them to play their part in helping the local community and reducing the burden on the local councils that would otherwise foot the bill.
John Hemming (Birmingham, Yardley) (LD)
Does my hon. Friend agree that because of the greater scarcity of fossil fuels, we should be aware of the costs of energy generally and in the long term, not just the short term?
Caroline Nokes
Absolutely. I hope that I shall have time to mention that at the end of my speech.
This is not just of concern to middle-income families who may be running two cars; it is a huge cost for low-income families who spend proportionally more of their incomes on fuel.
Nadine Dorries (Mid Bedfordshire) (Con)
I am sure my hon. Friend agrees that some of those low-income families are trying to establish their own businesses, or are already running small businesses such as, in my constituency, landscape gardening businesses. Winter is coming, and those people will now have to deal with the increase in fuel prices as well.
Caroline Nokes
That is indeed of real concern.
It is little wonder that so many of our constituents signed the e-petition—more than 110,000 members of the public called for the debate—and little wonder that the focus has been on the proportion of taxation in the current average price of £1.34 a litre.
Susan Elan Jones (Clwyd South) (Lab)
The hon. Lady is making a powerful speech. Could she make it even more powerful by saying that she would support a reversal of the increase in VAT on fuel?
Caroline Nokes
I am not convinced that that would be legal.
This morning I met representatives of the Freight Transport Association. They told me that high fuel prices have had a crippling effect on the logistics industry, whose business viability is determined by the price of fuel. Even the smallest rise makes a massive difference to them. A 5p increase in fuel duty adds another £2,350 to the annual price of running an articulated lorry, and the 3p increase that is planned for January would mean that a fleet of 50 vehicles would have to recover £37,000 more per year.
Caroline Nokes
I am sorry, but I do not think I have time to do so.
Profit margins for hauliers are incredibly tight, which makes haulage a very vulnerable business. In particular, fuel companies are not willing to extend credit terms, with the result that some payments are shrinking to as little as three days’ worth. As haulage firms are often not paid for work for up to 60 days, this is very much a hand-to-mouth industry, and companies can afford to think only as far as January. That hinders growth, investment and further recruitment.
There are about 100 Freight Transport Association members in my constituency, which is, of course, close to a deep-sea port. Fuel duty is lower on the continent, and £1,000-worth of diesel purchased on the continent can give over 200 extra miles to the driver. That has led to European businesses becoming more competitive than their UK counterparts, further heightening the pressure on domestic hauliers.
I acknowledge that we are facing a very difficult economic situation, and that we need to take robust steps to tackle the deficit, and I also know that the planned rises are less than the previous Government had intended. It is a relief to constituents that the Government delayed the scheduled tax rises and have introduced a fuel stabiliser but, like others supporting this motion, I want us to have a stabilisation mechanism under which duty rises and falls in response to fluctuations in the underlying price of oil.
As I am a member of the Environmental Audit Committee, it would be wrong of me not to mention the impact motorists and hauliers have on our nation’s carbon footprint, but fuel taxation is a blunt instrument and the reality is that people in rural areas are having to bear the additional cost as they often have to make the same essential journeys as before.
There are alternatives to petrol and diesel that are more environmentally friendly. One of them is biodiesel, produced from used cooking oil. Over the last year, 99 million litres of used cooking oil was collected from restaurants, food manufacturers and caterers. It is an entirely sustainable fuel derived from a waste product and devoid of some of the negative impacts traditionally associated with biofuels. Therefore, if taxation on fuel is partly about encouraging behavioural change, rather than just being about revenue raising, the Government should encourage the use of this fuel, rather than see it as another target for increasing duty. The removal of the 20p per litre duty differential on this type of fuel, which is an excellent source of green energy, sends entirely the wrong message.
Madam Deputy Speaker (Dawn Primarolo)
Order. Before I call the next speaker, may I remind Members that when they rise to intervene they are addressing the House, not their colleague behind them, and they are to turn around and face the Speaker’s Chair? That will stop them saying “you”, because they will see that they are addressing me, and what they have to say has nothing to do with me. We will also be able to hear the interventions, which I have not been able to do thus far.
Graeme Morrice (Livingston) (Lab)
I welcome the opportunity to speak in this debate, and I join other Members in paying tribute to the FairFuelUK campaign and the thousands of businesses and individuals who have backed it. I also pay tribute to the hon. Member for Harlow (Robert Halfon) for securing a debate on this important matter.
There can be no doubt that for many months now high fuel prices have been hitting families and businesses hard. Indeed, the October AA monthly fuel price report highlighted that summer prices—those from April to mid-October—compared with those in 2010 were on average 17.5p per litre higher for petrol and 19.7p higher for diesel. These high price increases are an important element of the wider financial squeeze that so many middle and low-income families are currently experiencing.
New AA research published yesterday also underlined the fact that less well-off drivers have suffered more since the price of fuel peaked earlier this year. The research shows that those cutting back on car use and/or other spending rose dramatically among those living on lower incomes. That is a very worrying development. The constituents who have contacted me over the last few weeks are absolutely clear about what they want: lower fuel duty and lower fuel prices at the pumps.
On fuel duty, the Conservatives in opposition said that pump prices would be benchmarked and allowed only to move by 5p per litre in either direction, in response to the changing price of oil. The limited fair fuel stabiliser plan announced in the Budget does not equate to what the public might expect from a fuel duty stabiliser. Commenting after the Budget announcement, Edmund King, the president of the AA, said:
“In effect it is a stabiliser on an escalator rather than a stabiliser on prices. It does not reduce prices. All it does is to reduce increases in duty.”
That is not what consumers were expecting and, as the motion states, it is time for the Government to look again at a “price stabilisation mechanism”.
When the Government increased VAT to 20% in January, they contributed to a further increase in fuel prices. It was the wrong tax at the wrong time, and it has kept petrol prices high and hit economic growth. I support the call, along with my Labour colleagues, for a temporary VAT cut to 17.5%, which would immediately bring the cost of fuel down by about 3p a litre.
We must also be grateful to my hon. Friend the Member for Bassetlaw (John Mann) for the excellent research that he published earlier this year on the political responsibility for increases in fuel duty. His revealing figures show that Conservative Governments have presided over increases in duty and VAT that have actually cost motorists twice as much as increases made by Labour Administrations. His figures demonstrate clearly that Labour Members have always been on the side of the ordinary motorist and the business person, whereas the Conservatives have been content to use fuel duties as a punitive means of raising revenue.
Toby Perkins
My hon. Friend has not only laid out the case with tremendous vision, but he has used some research, which is very welcome. Does he not think that the many people from Chesterfield who wrote to me supporting the fair fuel debate will be surprised to see how meek the motion is? They were expecting a hell of a lot more from this debate than what is to be voted on.
Graeme Morrice
I certainly agree with my hon. Friend that the public are expecting more, and we are not going to see any action unless the Government do something about this imminently.
Nick Smith (Blaenau Gwent) (Lab)
Filling up a commercial van costs £15 more now than it did last year. In January, I asked the Prime Minister about help for hauliers who are struggling with their fuel bills and he told me that the Government were looking at a discount for haulage firms. So far there has been little action on that. Does my hon. Friend agree that it is vital to support our truckers at this time?
Graeme Morrice
I entirely agree with my hon. Friend. Immediate action needs to be taken to ensure that our hauliers, and our commercial and transport businesses, are supported in this regard.
Graeme Morrice
No, I am going to carry on because I have taken some interventions and I do not have much time. I am coming to the conclusion of my speech. [Interruption.] We hear all the jeers from those on the Government Benches, but we must not forget that in 1993 it was a Conservative Government who introduced the fuel duty escalator. It is a Conservative fuel escalator, despite the protestations from Conservative Members. The families and businesses that have contacted all Members of this House on this issue need and expect action that will bring about a tangible reduction in the price of petrol and diesel, sooner rather than later. I hope that today’s debate will act as a stimulus for real change on this issue in the weeks and months ahead.
Rory Stewart (Penrith and The Border) (Con)
I join so many colleagues in congratulating my hon. Friend the Member for Harlow (Robert Halfon) on securing this fantastic debate. It is such a great example of how the Back-Bench system should operate. On that note, I will try to keep my speech as short as possible, limiting it to less than two minutes in order to let others speak.
I wish to make one very simple point on behalf of Cumbria: rural isolation is not just a question of sparse population; it is also about the terrible hollowing out of rural areas over the past 15 years. When I look out of my window at home, I see the disappearance of a school, a shop and a police station. In the past 15 years, we have lost 2,200 schools, 550 clinics and 150 police stations—that is across the nation, not across Cumbria.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
My hon. Friend will also be aware that 600 filling stations are closing every year, making the distance that rural inhabitants must travel to fill up their car even more demanding.
Rory Stewart
I thank my hon. Friend for making that point. The loss of pumps is an incredibly important issue, as is the loss of all the other services that are going such as pubs and shops. Currently, my neighbour, who has Parkinson’s disease, has to travel for two and a half hours to see a neurologist in Newcastle, and our schoolchildren are travelling further and further. There are things we can do to deal effectively with these problems, including with broadband and smart metering. It is a real disgrace that we have not sorted out smart metering. There is much better technology available. However, I should like to make a small plea for an extension, as rapidly as possible, of the 5p rebate that is currently offered in the highlands and islands to other sparsely populated areas of Britain.
Graham Jones (Hyndburn) (Lab)
I appreciate that the hon. Gentleman is making a rural point and that there are all sorts of issues about bridges and roads and the amount that goes into them, certainly in Lancashire. However, on his point about unfairness, was it not a previous Tory Minister who said, “When it doesn’t fit, get on your bike and get somewhere else”?
Rory Stewart
The hon. Gentleman will be astonished to discover that I disagree very strongly with the idea that the solution to problems of rural isolation is to “get on one’s bike and move somewhere else.” Our rural communities are the lifeblood of this country. When we think about our rural areas, we think about this country. Farming communities and all the other forms of rural community have a value that goes well beyond their economic value. We would be terribly sorry to lose them.
George Freeman (Mid Norfolk) (Con)
My hon. Friend is a passionate advocate of all things rural. Does he agree that the disproportionate impact of the tax on rural economies effectively makes it a tax on rural areas? It is a tax on the rural big society and on the rebalanced economy. If we are not careful, it will trigger a serious tax revolt in our rural communities.
Rory Stewart
I would never be able to speak with such eloquence as my hon. Friend, who makes a wonderful point. In order to fulfil my commitment and in honour of my hon. Friend the Member for Harlow and the Backbench Business Committee, I shall now sit down after making my plea: “5p for Cumbria.”
Mr Nigel Dodds (Belfast North) (DUP)
I am grateful to be taking part in the debate and I congratulate the hon. Member for Harlow (Robert Halfon) and his colleagues on having secured it. I also congratulate the many individuals who signed the e-petition and those others who managed to persuade the Backbench Business Committee to have this debate today.
This issue is one of our constituents’ major concerns; indeed, surveys have put it right at the top of that particular poll. The fact that households in the United Kingdom pay on average £677 a year purely on fuel duty illustrates the extent to which this issue affects ordinary working people and those in the poorer sectors of society. The poorest 20% are generally paying twice as much of their income on fuel duty as the richest 20%, which cannot be right. It is clear that the impact is not just on poorer people but on those in rural areas, as has so eloquently been pointed out already, and there is also a disproportionate impact on younger people. We had a debate in the House not long ago about car insurance and it is clear that younger people face a big premium for car insurance. As a result, they are finding it very difficult to stay mobile, to get jobs and to stay in employment.
Tessa Munt
Just two Fridays ago in the Youth Parliament debate, transport was identified as a main issue of concern for the Youth Council's campaigns over the next year. I hope that the Minister will take that into account when she responds to the debate.
Jim Shannon (Strangford) (DUP)
We are urging people to get into work, but people who live in rural areas in Strangford and who travel to my right hon. Friend’s constituency of Belfast North will find that a two-hour round trip costs £10 a day. That is £50 a week or £250 a month, which is a large chunk out of anyone’s wage packet. Does my right hon. Friend agree that a reduction in the price of diesel and petrol would help the unemployed to get a job and would help the employed to stay in work?
Mr Dodds
I am grateful to my hon. Friend, who makes a good point and illustrates it with the facts. I will come on to the situation in Northern Ireland, but it is clear that a car is a necessity, not a luxury, for many people in his constituency, so he makes a valid point.
The fact is that Northern Ireland has the highest-cost fuel of any region in the United Kingdom. The Automobile Association’s October fuel price report showed that of the 12 regions of the UK, Northern Ireland was, on average, the most expensive for unleaded petrol, diesel and super-unleaded. On top of that, its energy prices more generally are among the highest in the United Kingdom. I mentioned car insurance; Northern Ireland’s car insurance premiums are by far the highest in the United Kingdom. They are, on average, 83% more expensive per person than in the rest of the United Kingdom. Earlier, someone mentioned a double whammy for their constituents; in Northern Ireland, we have a severe triple whammy when it comes to energy, fuel prices and car insurance. Those issues have to be addressed. Some will have to be addressed by the devolved Administration, and there are Ministers working on the issues, here and at home, but there are also issues that can be addressed only at the level of the Westminster Government.
I hope that this debate will contribute to focusing the Government’s mind on this serious problem. Some 83% of people in Northern Ireland go to work by car, van or minibus, compared with only 70% in the rest of the United Kingdom. That shows the rural nature of much of Northern Ireland, and the fact that we have an underdeveloped public transport network; for example, large parts of the west of the Province are not served by the railway network. Clearly, the car is therefore a necessity there, not a luxury.
Claire Perry (Devizes) (Con)
The right hon. Gentleman and I normally talk about pig farming, but on this occasion, we can talk about the fact that in our very rural areas—particularly in my constituency of Devizes—the issue is the lack of competition among petrol stations and heating oil providers. None of us is on a grid; we are all reliant on heating oil. My area has similarities, in microcosm, with the right hon. Gentleman’s area.
Mr Dodds
Absolutely. We in Northern Ireland have a higher dependence on off-grid energy supplies than other places in the United Kingdom, but there are many similarities. We in Northern Ireland have a unique situation: we share a land border with the Irish Republic. As the per-litre price for petrol is, on average, 5p cheaper in the Irish Republic—15p a litre cheaper for diesel—we have the problem of fuel smuggling, which costs the Exchequer about £200 million to £300 million a year. One way to deal with that is for the Serious Organised Crime Agency and others to be tougher in tackling the problem, but there also needs to be an extension of the rural fuel pilots to Northern Ireland. That would not only reduce the cost of petrol and diesel and boost the economy, but increase the tax take for the Revenue. That has been clearly shown.
People in my constituency tell me all the time that they are appalled by massive oil company profits; BP had profits of £3.2 billion in the second quarter of this year. They want those profits passed on to people in difficulties. They are appalled by the difference in petrol prices across the Province. They cannot understand why supermarkets—I will mention supermarkets—in my constituency charge one price in one area and another elsewhere, simply because they can get away with it. People in my constituency want the planned fuel duty increases for next year to be scrapped to boost the economy, reduce costs and boost the tax take, which is only at 66% today, compared with 81% in 2001-02; that shows that the current policy of ramping up tax and fuel duty increases is not working for the Government. People in my constituency want the measure of inflation used to upgrade fuel prices changed from the retail prices index to the consumer prices index, which is used for everything else.
Martin Vickers (Cleethorpes) (Con)
This is a vital debate that affects every household in the country. As an officer of the all-party group on fair fuel for motorists and hauliers, I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate, and the Backbench Business Committee on recognising its importance, particularly as the call for a debate was supported by an e-petition—a valuable resource that the Government must be congratulated on introducing. This is not an anti-Government motion; I and other hon. Members who have signed it recognise the reality of the situation. Let us be honest: it is not the ideal time to suggest anything that will reduce the Government’s income streams. We accept that we are in a financial black hole, but I pay tribute to the Government’s handling of the nation’s finances.
Damian Collins
Does my hon. Friend agree that something that would increase the amount in the nation’s coffers and would be good for the haulage industry is the introduction of a levy on foreign lorries, which do not pay any UK taxes? That is particularly galling for hauliers in my Kent constituency, who pass by them on our motorways, knowing that they have made no financial contribution to them at all.
Martin Vickers
I entirely agree with my hon. Friend. My constituency, which I shall come on to, is another centre for the road haulage industry. It, too, would welcome such a proposal.
Unemployment in my constituency is above the national average, and incomes are below the national average. Much of the available work is seasonal, and jobs can be many miles away. For many people, travel costs are compounded by the Humber bridge tolls, but that is a debate for another day. My constituency not only includes the premier resort on the east coast, also known as Cleethorpes, but the industrial and port complex on the Humber bank, including oil refineries, which are major employers. Indeed, they are good employers that provide the area with much of its wealth, but today I am speaking for my constituents, who are finding travel costs an increasing burden.
My constituency is a major centre for the road haulage industry, which, needless to say, suffers from the present levels of tax and duty on petrol and diesel. That, coupled with the fact that there are many small towns and villages in the vast, rural areas that are a feature of Lincolnshire, means that people do not live close to their place of work or to the essential services that they need to access. Walking and cycling are not realistic alternatives.
Motoring taxes are a greater burden for people living outside major conurbations. The Countryside Alliance has produced figures that show that people in rural areas spent £1.34 per week more in petrol at the beginning of this month than they did at the beginning of the year. They also draw attention to the fact that an-above average number of low-income groups in rural areas are car owners, and that accounts for a much greater proportion of their income. The people I represent think that paying 60% of the cost of a litre of petrol in tax and duty is too much—it is unfair. I have said before in the Chamber that it is a risky business for Governments to talk about fairness, because it is human nature for someone to regard as fair what is beneficial to them, but to regard something as unfair if it benefits someone else.
What people do regard as unfair is the fact that, based on the most recent figures available, £31 billion per annum is collected in tax and duty. Total annual expenditure by the Department for Transport is only £23 billion, so they regard that as unfair.
Richard Fuller (Bedford) (Con)
Does my hon. Friend agree that fairness is another reason people are animated by the debate, and support the motion? Too often under the previous Government, both with fuel duty and with council tax, people saw taxes go up year after year with no justification. It is the justification for the tax that is the source of the unfairness in this instance.
Martin Vickers
I entirely agree with my hon. Friend, who strengthens my case.
I was discussing fairness. In the two unitary authorities that cover northern Lincolnshire, it is estimated that constituents pay £167 million a year in motoring taxes, compared with the £95 million that is spent on roads infrastructure—again, that is clearly unfair.
Martin Vickers
I think that I am running out of time.
I said earlier that my constituency is a major centre for the road haulage industry. Most large commercial vehicles do about 8 miles per gallon. The planned increase due in January will add £15 a week to the running costs of a single vehicle, which will impact not only on individual businesses but on the supply chain. The Federation of Small Businesses has produced figures that detail the impact on businesses in that category.
I recognise, as I said earlier, that the Government must protect their income streams. There has been much talk in recent weeks about the 50p tax rate. That must be secondary to a reduction in car taxes. Very few people in my constituency can even dream of earning an income that would demand a 50p tax rate. I want to get rid of it as soon as possible, but now is not the time. Rural bus services have been reduced. The Government understand the impact on local people in northern constituencies in particular, and I urge them to act as soon as is practicable.
Robert Flello (Stoke-on-Trent South) (Lab)
I begin by adding my congratulations to the hon. Member for Harlow (Robert Halfon) on securing today’s extremely important debate, which is long overdue. We have heard today of double whammies and triple whammies. I shall not go for quadruple or quintuple whammies, but simply point out that the price of fuel pervades every aspect of what we do.
Whether in a rural community or in a heavily urbanised community such as Stoke-on-Trent, everything happens because of the cost of fuel—constituents going to the local shop and travelling there by car or constituents going to work by bus are all affected by the costs of fuel. The goods in the shops will have got there by means of the haulage industry, and some of those goods will have come from the farming community that produced them. At some level, the cost of fuel will be a component of the cost of every item on the shelves.
John Glen (Salisbury) (Con)
Does the hon. Gentleman agree that one group that is particularly vulnerable to the cost of fuel is the disabled? Those who are on Motability schemes, such as the constituent who contacted me, have no choice—they have to use their car and are therefore subject to the high cost of fuel.
Robert Flello
I could not agree more. All our poorest communities, whether they are people with any form of disability requiring a mobility allowance or special vehicles, or the poorest communities trying their best to get to work in difficult circumstances, are the people most heavily affected. The point was made earlier about who is paying the tax. It is being paid by the poorest. Who is not paying the tax? The oil companies and the speculators, who are taking the opportunity of the Arab spring and in some cases the continuing troubles to speculate a little more in the belief that the price will go up, until that becomes self-fulfilling. We end up with petrol prices continually going up, irrespective almost of fuel taxes. We should have a thorough root-and-branch review of that.
In the few minutes available to me, I want to turn my attention predominantly to the impact on the haulage industry and the associated industry, the road rescue services. I place on record my thanks to the Road Rescue Recovery Association, the Scottish Vehicle Recovery Association, the Road Haulage Association and the Freight Transport Association for the campaigns that they have been running, alongside the FairFuelUK campaign, and the pressure that they have been bringing to bear to get the issue debated seriously on the Floor of the House.
Lindsay Roy (Glenrothes) (Lab)
Does my hon. Friend agree that the high fuel duty is having a particularly damaging effect on the construction industry, which is going through a difficult time at present?
Robert Flello
Indeed. Every aspect of what we do is affected by the price of fuel, whether at the pumps, domestically, or at the heavy duty pumps that the haulage industry and other industries use. All sorts of other issues then come into play. For example, hauliers will be looking to ensure that their vehicles are running as efficiently as possible, yet on the European stage there is the possibility of a reduction in the height of trailers to 4 metres, which will have a negative impact on our haulage industry in the United Kingdom, exacerbate the problem of the price of fuel and increase the need for a cut in the fuel duty.
As has been said, a temporary VAT cut would be absolutely the right thing to do to secure an immediate impact for the domestic motorist, but something different is needed for the haulage industry in the longer term. A VAT cut would obviously have a wash-through effect, but we need a more serious change and a restructuring of the way the fuel costs of the industry and associated industries are met.
Other factors that impact on the haulage industry, such as London’s low emissions zone, also have a knock-on effect. I wish that Mayor Boris would respond to my letters and agree to meet to discuss the impact on the haulage and haulage recovery industries. It has a direct impact on fuel efficiency and keeping traffic moving on London’s streets if vehicles that should be on the streets helping to recover other vehicles and keep traffic flowing are prohibited from doing so. That will of course become a greater concern in the run-up to the Olympics.
Indeed, other aspects of the price of fuel will affect the membership organisations—I will not name them—that come out when their members break down by the side of the road, and those organisations’ costs are passed on to their members through the running costs of the yellow or orange vehicles that assist people at the roadside. That industry will also be hit by Green Flag’s terrible announcement that it is devastating the number of contractors who work for it. Some of them will unfortunately end up unemployed.
Nia Griffith
Does my hon. Friend recognise the real danger to haulage companies from foreign competition because of the price differentials?
Robert Flello
My hon. Friend makes her point well.
In the 20 seconds remaining, I wish to make two points. First, instead of cutting the top tax rate of 50p for high earners, we should be helping motorists. Secondly, we should be looking at ways of taxing the speculators and the people who are making a profit from the ordinary motorist and make them pay instead.
Andrew Griffiths (Burton) (Con)
It is a privilege to follow a fellow Staffordshire MP in this important debate. I would like to join the long line of hon. Members who have congratulated my hon. Friend the Member for Harlow (Robert Halfon) on securing this hugely important debate. Few debates that have taken place in this House have prompted such a response from my constituents, and I have received numerous letters, telephone calls and e-mails asking me to take part. I congratulate the Backbench Business Committee, in particular, because this is a perfect example of the kind of issue that matters to our constituents and that we should be talking about in this House.
The Prime Minister said a little while ago that he wanted our country to be a nation that makes things. Well, my constituency of Burton makes things. I am proud to say that it is the home of British beer. We make diggers, car seats and produce many other things. I am proud of that and am doing my best to maintain it for the future, but those industries are being particularly badly hit by the massive hike in fuel prices in recent months. I think that this is the Economic Secretary’s first opportunity to reply to a debate in the House and I am pleased to welcome her to her new post and wish her luck. I hope that she will have some positive things to say, because businesses in my constituency are saying that fuel price rises are having a real impact on their competitiveness.
Lilian Greenwood (Nottingham South) (Lab)
Does the hon. Gentleman agree that one of the industries that will be hardest hit by the increases in fuel duty is the bus industry? Does he agree that it will be hit not only by two increases in duty next year, but by the Government’s decision to cut 20% from the bus service operators grant? What impact does he think that will have on passengers?
Andrew Griffiths
I thank the hon. Lady for her intervention, but I am staggered by the collective amnesia on the Opposition Benches. I will gladly give way again if she can name a single time in all the years her party was in government when it cut fuel taxes.
Lilian Greenwood
My understanding is that on numerous occasions we decided not to press ahead with increases in fuel duty, and that had an enormous impact.
Andrew Griffiths
That point will not be lost on the House.
Something else that will not be lost on the House is the fact that this coalition Government took the bold steps to reduce fuel duty, to bring in the fair fuel stabiliser and to look at what we can do to help rural businesses. That is hugely important.
Andrew Griffiths
I will not give way again; I have given way a few times.
I must tell the House what motorists and families in my constituency tell me about the high price of fuel and how it is impacting on them. They, like the constituents of many right hon. and hon. Members, are suffering because they have had pay freezes and, in some cases, pay cuts, because of inflation, and because they have had to cope with large rises in electricity and gas prices. So spiralling fuel prices are starting to impact on their quality of life, and on their ability to survive in these difficult times.
More than one constituent has told me recently that they have had to choose between doing regular maintenance on their vehicle and filling it up every month to get to and from work and to pick up the kids. We have to look at the impact, because our constituents have only so much to spend on motoring every month and every year, and, if we do not do something to help them soon, they will have to find savings elsewhere, and that could affect road safety.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
The hon. Gentleman is making a good argument for bringing down fuel prices. Will he therefore support Labour’s plan to cut VAT?
Andrew Griffiths
I am sorry, but the hon. Lady’s argument would have more strength if her party had done something to cut fuel duty when it was in power.
In the few minutes that I have left, I will raise an issue of particular importance to my constituents.
Andrew Griffiths
I have given way a number of times; I will continue, if I may.
I represent Uttoxeter, a fine market town situated between Stoke and Derby. It has a race course, and it is a great place to live and to do business, but my constituents have to pay 6p a litre more for their fuel than motorists who live just a few miles down the road in Stoke and Derby, because—I believe—of the supermarkets’ power and their virtual monopoly on forecourts throughout the country.
I have already written to the Secretary of State for Business, Innovation and Skills, and he has advised me to write to the Office of Fair Trading to make an argument, but it is time we looked at how the supermarkets operate, because they have an anti-competitive effect on the market place and drive prices up. It will not be lost on colleagues that petrol companies quickly put up prices on the forecourt when there is an increase in the price of a barrel of oil, but are much slower to reduce them when the price of a barrel comes down. It is time that the supermarkets and the big petrol companies starting acting fairly towards our constituents, and I urge the Economic Secretary to do what she can to help.
Stewart Hosie (Dundee East) (SNP)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate. It is important, and he will know that in the previous Parliament there were a number of debates on the subject and a number of attempts in Finance Bills to introduce a fuel duty regulator—precisely the price stabilisation mechanism that he describes in the motion today.
Going back over such debates from the previous Parliament is quite instructive, because it tells us why there is such anger among the general public. In the report of a debate in 2005 we read that the price of unleaded petrol had risen to 86p a litre, a rise of 6p in six months; by 15 May 2008 it had gone up to something over £1.10 a litre; and by the time of the Finance Bill debate in July 2008 it averaged £1.32 a litre.
The underlying price is more intriguing, however. In 2005 Brent crude had risen to $60 a barrel, up a massive $10 on the previous year. By the time of the debate on the 2007 pre-Budget report it had risen to around $84 a barrel. In the run-up to the 2008 Budget the price was $94 a barrel. As someone mentioned earlier, prices crashed through and spiked at around $140 a barrel. This week the price has stabilised at $114 a barrel, but the price at the pump has risen inexorably.
From 86p a litre in 2005, diesel prices in Dundee this week had risen as high as 140p a litre—£6.40 a gallon. In the constituency of the Chief Secretary to the Treasury diesel was nearly 145p a litre—£6.60 a gallon. In Kirkwall, in the constituency of the Liberal Deputy Chief Whip, the right hon. Member for Orkney and Shetland (Mr Carmichael), diesel is 152p a litre—£6.90 gallon—and in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) it is almost £1.54 a litre. That is £7 a gallon, so it now costs £90 to fill up the tank of the average family saloon car. One can quickly see why people are so angry.
In our past debates, we heard about support outside Parliament from many organisations. The Road Haulage Association said:
“UK hauliers are struggling as never before to cope with continually rising fuel prices”.
Nothing has changed. The National Farmers Union and the Scottish Fishermen’s Federation said similar things. The Federation of Small Businesses said that it was
“behind the introduction of any mechanism which automatically uses extra tax revenues…to reduce prices at the pumps”.
And, my goodness, we need that now.
Sheryll Murray (South East Cornwall) (Con)
The hon. Gentleman mentioned the Scottish Fishermen’s Federation. Does he agree that many fishing vessels can reclaim the duty, so it does not affect them?
Stewart Hosie
Indeed, they can. What that organisation said at the time was:
“Transport is…a vital component of the fishing industry and cost increases there have applied even greater pressure, felt more acutely by the more remote fishing areas of the North West and the Northern Isles.”
I was paraphrasing what it said, as we have a whole four minutes each to speak. The point is that the response to spiralling costs under Labour was a fuel duty escalator, not a fuel duty stabiliser. The Labour Government set their face against every attempt to introduce a price stabilisation mechanism and, most cynically of all, increased duty to compensate for the temporary reduction in VAT.
The coalition’s response was to introduce the “fair fuel stabiliser”. That is what they called it. However, instead of using the windfall they already had from the North sea, they engaged in a smash-and-grab raid of £2 billion extra, with an increase in the supplementary charge. Hon. Members will remember that that led EnCore Oil to suggest that no tax would be paid on undeveloped and undiscovered oil. Other organisations said that very large projects were no longer viable because of the surprise Budget move. Chevron warned that the measure had
“shaken investor confidence to the core.”
Everyone was singing from the same hymn sheet except the Chancellor, who said that he
“did not expect investment to be damaged.”—[Official Report, 3 May 2011; Vol. 527, c. 604.]
Mr MacNeil
Does my hon. Friend agree that the Chancellor’s reckless smash-and-grab of North sea taxation has endangered investment in Scotland?
Stewart Hosie
It has indeed. There were stark and powerful warnings from the sector at the time that went on for a considerable time, and forced some limited changes to the regime. In the cold light of day, this month, the Aberdeen and Grampian chamber of commerce, along with others, carried out a survey that revealed that:
“50% of operators say Chancellor’s tax hike harmed North Sea investment.”
That policy did little to help the haulier and the motorist, but it did a great deal to damage the oil and gas sector.
Of course, it is not just the oil and gas sector and the traditional users of haulage who have been damaged. This week I have been contacted by a building company—a static business, not a haulage business—in my constituency, which told me that over the past few years, fuel as a proportion of its overheads has rocketed to 20%. We are not just causing inflation for goods that are moved, we are not just putting the haulage sector under pressure, we are not just making it difficult for people even to afford to go to work: the increasing cost of fuel as a proportion of overheads is driving other sectors to the wall too. These are very difficult times indeed.
This is only a Back-Bench debate—I am delighted that we have secured it—but the strength of feeling is very clear. There is now a body of opinion saying that constant high price rises, and the spikes in the price at the pump, are damaging the entire economy. I hope that the Minister is listening carefully to what has been said, and that action will be taken quickly.
Fiona Bruce (Congleton) (Con)
The high cost of fuel is impacting detrimentally on families, pensioners and businesses in my constituency, comprising as it does rural areas interspersed with market towns. I want to concentrate particularly on the small businesses in my constituency and the impact it is having on them.
In my constituency there are just a handful of large businesses, the largest of which employs just over 500 people, but there are 4,000 small businesses, which are therefore the engine of the local economy. For most of them, car travel and other vehicle travel is not an option but a necessity. As someone who has run a small business for 20 years, I know the reality behind the phrase “living on the margins”. That is a constant reality for many small businesses today. Because transport costs are a substantial component of their outgoings, fuel price rises have eroded those margins to almost unsustainable levels.
Stephen Lloyd (Eastbourne) (LD)
I share my hon. Friend’s concern about small businesses, and I recently found a statistic of which she may not be aware. Over the past year the UK’s 4.8 million small and medium-sized businesses have paid over £260 million more for fuel than they did only 12 months ago. Does she agree that sometimes the price of fuel becomes a step too far for small businesses?
Fiona Bruce
I entirely agree. Small businesses are being forced into an impossible predicament. Do they transfer the increased costs to their customers, do they lose their customers, or do they sacrifice the making of any profit just to keep going, which is not sustainable in the long term?
Esther McVey
We are talking about small businesses, which I too represent here today. In the Wirral there is the double whammy of not only increasing fuel prices but increasing toll prices. Marginal profit is completely wiped away when both of those are taken into account.
Fiona Bruce
My hon. Friend makes a very good point.
Let me give the House some specific examples of small businesses in my constituency that are suffering in that way. Smallwood Storage Ltd is a transport and storage business in Sandbach employing nine people. This week it told me:
“We need a level playing field, the price of fuel has become too high as a percentage of our overheads and is out of proportion with the rates we charge. As a small business, we do not have the power of larger companies and are being squeezed from all sides.”
Another local company, B Lakin Transport, a haulage businesses in Somerford employing 10 people, said:
“Increased fuel costs have knock-on effects on everything…as the price continues to creep up, customers will go elsewhere and even look to foreign drivers who can use cheaper fuel from the continent; avoiding the extortionate prices in Britain.”
It continued:
“A driver from Luxembourg can fill up their petrol tank in Luxembourg at a fraction of the cost here. In October 2011, 1000 litres of unleaded fuel would cost £1130 in Luxembourg compared to £1350 in the United Kingdom—that’s a saving of £220 each time the tank is filled.”
Let us remember that haulage competitors from Luxembourg can fill their tanks there, drive to the UK and then return to Luxembourg without having to fill up here at all. B Lakin Transport tells me:
“Combine this with the exemption from road tax for foreign drivers, and we are clearly at a significant disadvantage to these foreign drivers from the outset.”
Fiona Bruce
Through the motion, we are asking the Government to explore a number of ways in which they could assist small businesses, such as the ones that I am describing, with this predicament.
I will cite another business in Cheshire. It is not a small business, but it is an interesting comparison, because it is not a haulage company. Roberts Bakery is a large family business that produces bread in Northwich, just outside my constituency. Just yesterday, it informed me that the increase in fuel prices since last year alone has added £10,000 a week, or £500,000 a year, to its delivery costs. That is a serious additional overhead for such a family company.
The price of fuel is hindering such businesses from playing their essential role in the economic recovery and job creation that we so desperately need in this country. It is effectively pricing UK businesses off the road, driving people out of work, preventing companies from taking on and holding on to contracts, and fuelling further economic difficulties.
I signed up to support the motion, and I applaud all the other Members who have done so. I ask the Government to consider as a matter of urgency the impact that high fuel duty rates are having on local economies such as the one in my constituency, and to take action to address the issue accordingly.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon). I rise to speak on behalf of my constituents who have expressed to me their deeply held views about the rising cost of fuel.
People are angry in unprecedented numbers right across my constituency. The same is true throughout Britain. At my weekend surgeries there has been a steady flow of constituents who have not held back from telling me what causes the most hardship in their domestic finances. One of the dominant themes is rising petrol pump prices, which are a constant weekly battle for motorists.
Mr Donohoe
I understand that my right hon. Friend has an Asda in his constituency. Asda has introduced a price of 128.9p per litre across the whole nation. Surely if the Government are to do anything, it should be to reintroduce universal prices for petrol. He is old enough, as I am, to remember when we had those.
Mr Clarke
I am grateful to my hon. Friend. I have a big constituency, which stretches from Cumbernauld right through to Chryston, Coatbridge and Bellshill. The prices at Asda, welcome as they are, do not deal with the problems elsewhere.
These are truly worrying times. We have sluggish growth, rising unemployment, falling confidence in the manufacturing sector and depressed business confidence, so this is no time for complacency from the Government.
By September 2011 the cost of petrol had increased by 17.7% in a year. Our constituents are now paying petrol prices that are the highest in all 27 countries of the European Union. The only country in the world that seems to beat us on motoring taxes is Turkey.
Andrew Griffiths
The right hon. Gentleman is making the point that we are the most expensive country in Europe. Will he tell us when our prices became the highest in Europe?
Mr Clarke
We are where we are.
What the Chancellor does on fuel duty increases next year could make or break many people’s ability to go about their everyday lives, whether they are looking after their family or running a business. Failure by the Government to take effective action would mean winding the clock back on travel and mobility to a time when the freedom of the road was the preserve of the middle class. That cannot be right or fair. It would be a retrograde step for my constituents and would place their finances in an intolerable position.
With 80% of the population living in a car-owning household, a car is now a necessity, not a luxury. Unlike here in London, where vast transport links provide the necessary infrastructure for people to live their lives effectively, in constituencies such as mine people use and rely on their cars daily. Lower-income families, elderly people and those living in rural areas will be the most adversely affected and hit by rising fuel prices. In September, the then Secretary of State for Transport suggested that the railways had become a rich man’s toy. If that is the case, how can the Government’s policy, which is allowing exorbitant fuel prices literally to drive people off the roads, be justified?
Despite the Government’s seemingly generous gesture of a 1p cut in fuel duty, the public will simply not be fooled. The simultaneous increase of 2.5 percentage points in petrol tax that accompanied the VAT rise from 17.5% to 20% in January makes a mockery of the Government’s proposal. Their meagre attempt to placate motorists will benefit only the Treasury.
The fuel duty stabiliser has not shielded drivers from pump price volatility. That is why I believe that the Government need to take real urgent action now to help ease the squeeze on struggling families and kick-start the economy by temporarily reversing the VAT increase.
Karl Turner (Kingston upon Hull East) (Lab)
Will my right hon. Friend give way?
Mr Clarke
I am sorry, but I will not.
I know that when times are tough, tax revenues are seen as vital to the Treasury. My constituents know that, too, because most of them have been through tough times. However, let us be clear that those revenues cannot be loaded on to the backs of the poorest and most vulnerable in our society. It is they who are suffering most from rising fuel prices, and it is for them that the House ought to speak tonight.
Andrew Bingham (High Peak) (Con)
First, I add my congratulations to my hon. Friend the Member for Harlow (Robert Halfon), who is no longer in his place, not only on securing the debate but on the tenacious way he has pursued the issue relentlessly since his election last year.
I rise to support the motion and highlight the extra impact of fuel prices on High Peak. We have a large number of quarries, all of which produce the finest quality limestone in the country. That limestone has to be moved by road or rail, but predominantly by road. Quarries have to be where the stone is, so they cannot be moved around. I wish to tell the House a short tale about a constituent of mine, Mark Pearson, who operates his own wagon. He is a single operator who carries 17.5 tonnes of limestone with every load. In the past three years his fuel bill has increased from £1,600 a month to £3,200 a month. That huge increase in his overheads has to be borne by somebody, whether by Mark himself or the end users of the stone. Such overheads will restrict employment and business growth.
Karl Turner
The hon. Gentleman makes a powerful point on behalf of his constituent, who is clearly being squeezed. Did he bother to ask his constituent how much the increase in VAT is costing him?
Andrew Bingham
As I am sure the hon. Gentleman is aware, many businesses are registered for VAT and so will be able to reclaim it. It is the other tax that is the addition to their costs.
Andrew Bingham
If the hon. Gentleman had been paying attention, he would know that I said my constituent was an owner-operator with his own truck.
Andrew Percy
If that owner-operator did have employees, does my hon. Friend think that he would be happy with the six planned rises under Labour?
Andrew Percy
Does my hon. Friend think that those pretend employees would have been happy with the fact that the previous Labour Government escalated the fuel escalator?
Madam Deputy Speaker (Dawn Primarolo)
Order. We cannot have shouting across the Chamber. It is absolutely unacceptable, Mr Turner. We will have proper debate.
Andrew Bingham
My hon. Friend makes an excellent point, as he always does.
High Peak businesses suffer from rurality. We are midway between Sheffield, Manchester and Derby. The distances from our businesses’ customers and their suppliers mean that bringing goods in or sending them out costs more. My big concern is that as increases in fuel costs are borne more and more by local businesses, they will eventually say, “Enough is enough” and move out of the countryside into urban areas, further exacerbating the difference between the rural and urban economies.
We must remember that families are affected too. Although I understand that this debate is predominantly about fuel costs, I have to mention the increased energy costs that families are having to bear at the moment. I venture to suggest that High Peak is probably the coldest constituency in England. We have had a cricket match snowed off in Buxton in June, so we feel the winters, which are deeper and longer. That puts a further burden on family budgets.
Other Members have made the point that increased car use is required in rural areas. The proportion of households without a car in London is 43%, while in metropolitan areas it is 31%. In rural areas, only 10% of households do not have a motor vehicle. The reason is—
Andrew Bingham
No, I am going to move on, if the hon. Lady does not mind, because we are short of time. Also, I note what the former occupant of the Chair said about those making interventions not being called to speak, and I would not like to deprive the House of her speech later on.
When public transport links are not as good, a motor vehicle becomes a crucial part of family life. Someone spoke earlier about four-wheel drive vehicles. I understand the image they have as Chelsea tractors, but we should remember that sometimes four-wheel drive vehicles are vital in rural areas, as they are the only way that people can get about. As for public transport in my area, anyone who wanted to travel between the two major towns of Glossop and Buxton by bus would need to take a meandering route through New Mills, Whaley Bridge and Furness Vale. A car is the best way.
I believe that one day vehicle movements will perhaps fall slightly as communications improve, but broadband in rural areas is not as fast as it is in urban areas. That reduces people’s ability to work from home, which means that they have to travel to work, again putting more pressures on budgets. Cities and urban areas have faster broadband, better public transport and, more often than not, a better climate. In High Peak it is colder for longer, we have fewer public transport options and families and businesses need to travel further.
Given that I still have about one minute, I shall mention one further aspect. Local mountain rescue teams are staffed by volunteers who use vehicles, but also pay duty. I give hon. Members the image of a cold, snowy mountain in High Peak, with a sheep in one field and a human being in another, and a farmer going to save the sheep and a mountain rescue team going to rescue the human being. Which one pays less for fuel? The farmer will quite rightly use red diesel and pay no duty; the mountain rescue team, as a not-for-profit group of volunteers saving a human life, is faced with paying all the duty on that fuel. However, that is a debate for another day. I put my hon. Friend the Minister on notice that I keep putting in for a Westminster Hall debate on the issue. I hope that one day I may get lucky.
To sum up, rural areas face the challenges of using more fuel, and in High Peak we pay more.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
I, too, welcome this debate, which gives Members the opportunity to discuss an issue that is close to our constituents’ pockets. Like many others, my constituency is a mixture of the urban and the rural, and everyone is feeling the pressure at the pumps. Today’s motion was necessary to create the opportunity for this debate, but sadly it omits some crucial aspects. I am disappointed that the amendment in the name of my hon. Friend the Member for St Helens North (Mr Watts) was not selected, because it would have filled the debate with all the pertinent issues that we need to discuss.
During the speech by the hon. Member for Harlow (Robert Halfon), his bipartisan mask slipped as he made certain political points about the motion. My constituents want to know how the Government plan to tackle the high cost of fuel now. They also want to hear the longer-term plan to enable the country to become less dependent on petrol and diesel. The hon. Gentleman purports to be a champion of the consumer’s cause, but although this debate partly covers the issue, important facts have been left out and the bigger story remains untold.
John Peel said:
“I never make stupid mistakes. Only very, very clever ones.”
I wonder whether the hon. Gentleman has indulged in John Peel’s rhetoric in the motion. It contains faint praise for the Government’s austerity programme, yet that programme is a significant part of the problem, rather than part of the solution, because it goes too far and too fast. Also, there is no mention whatever of the whopping 20p a gallon on the price of fuel following the latest VAT rise.
Gareth Johnson (Dartford) (Con)
Is the hon. Gentleman aware that the Labour Government increased the cost of petrol no fewer than 12 times? We would not be having this debate if that had not happened.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
On that point, I was looking at the AA website this morning and comparing unleaded fuel prices in my region of the north between May 2006 and May 2010. Over that four-year period, the price increased by 24.2p, yet in just one year between May 2010 and May 2011, we have seen a 16p jump. That is two thirds of the increase that we saw under four years of a Labour Government.
Mr McCann
That gives us the real picture. I shall say more about that in a moment.
My constituents know that the price of oil is linked to the complexities of production, of exchange rates and of international stability, and that interference in one or more of those factors can cause prices to spiral out of control. They lose comprehension, however, when they see little evidence of price reductions when those factors are reversed. I remember well that in 2008 the price of oil was $147 a barrel and the price of unleaded in my town was £1.15. Yesterday, the price of oil was $114 a barrel, and the price of petrol £1.35.
Mr McCann
I have already taken a couple of interventions. If my hon. Friend does not mind, I want to allow a couple of other Members to get in.
We need some answers from the Minister to explain the phenomenon that I have just outlined, because the public just do not understand it. If this debate is to have any credibility, it also needs to address some other issues. I do not believe the hon. Member for Harlow’s simplistic proposal that reduced prices will bring in more income. If he believes that we need to reduce fuel duty, he must tell us where the resulting cuts would be made. Or would he advocate increasing other indirect taxation, or direct taxation, to fill the gap?
Robert Halfon
I thank the hon. Gentleman for giving way, and for signing the motion. As I mentioned earlier, the AA has proved that the Treasury is getting £1 billion less in revenue because of the high cost of petrol. People are unable to afford to drive their cars, and the Treasury is therefore losing money. If we cut taxes, more money will go into the Treasury.
Mr McCann
That is the same explanation that the hon. Gentleman offered before, but I still do not understand it. I signed the motion because it was the only way of getting an opportunity to discuss this issue, which is important for our constituents. I would have preferred that the amendment tabled by my hon. Friend the Member for St Helens North—[Interruption.] Well, the hon. Member for Harlow is going to have to tell us how he proposes to fill the gap if fuel duty is cut. And if he believes that the gap does not need to be filled and that we should be taxed less, he will have to tell us what public services would suffer as a result.
A former Member of this House was once described as a vacuum surrounded by charisma. I think we all hope that, at the end of the day, this debate will not become a vacuum surrounded by synthetic anger.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his passionate speech, on his many campaigns on this issue and on securing this debate, and I welcome the huge interest and support across the House for it. The price of fuel remains, week in, week out, one of the most important and pressing issues raised by people in Worcester. It is an issue on which I, like many other hon. Members, am determined to see real progress.
I wholeheartedly support today’s motion and was proud to put my name to it as a long-term advocate of fuel price stabilisers. I want to put forward one more argument for action that has not been sufficiently covered in this debate and I want to raise a couple of further concerns, which I hope the Minister will be able to respond to in her reply.
As my hon. Friend the Member for Cleethorpes (Martin Vickers) set out and as the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) acknowledged, the Government have to pay attention to balancing the budget. The motion notes, however, that fuel duty revenues are lower now than they were in 2008 despite the fact that the level of taxation has increased since. In my view, that makes but understates the case for rethinking further increases. As I have argued in Westminster Hall debates, that case was admirably set out by the Office for Budget Responsibility when it first looked at, and then rejected, the idea of a fair fuel stabiliser. It concluded that although higher prices added to Government revenues in the short term, by increasing the take from fuel duty, their longer-term impact was to reduce Government revenue through the combination of discouraging usage and the wider negative impacts of high fuel costs on the economy. Although the OBR used this argument to reject the original plan for a stabiliser, I have said many times that the logic of its argument is that lower fuel duties could result in higher tax revenues, and I am happy to put that case again today.
We should look not only at the impact on fuel duty receipts themselves, substantial though they might be, but consider the effect of sky-high prices on business profits and thence corporation tax, their impact on the rate of inflation and thus the rate of increase in costs to Government in everything from wage inflation to benefit uprating. We should consider the depressing impact of high fuel costs on the whole economy and in particular on business and enterprise.
Mr Graham Stuart (Beverley and Holderness) (Con)
Does my hon. Friend agree that it is a central Conservative insight that we can lower the rate and up the take so that small companies in rural areas such as mine are able to do more work, earn more, pay more tax and keep the economy going?
Mark Pawsey (Rugby) (Con)
I would like to make the point that a lot of freight companies are filling up on the continent. If we reduced the amount of duty, particularly on diesel, they would be encouraged to fill up in the UK, which would bring additional revenue to the Exchequer.
Mr Walker
My hon. Friend brilliantly pre-empts my next point. I was going to say that most business users also use diesel, which, as my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) pointed out, is an important issue. One concern I particularly wanted to raise is the fact that diesel in this country is so much more expensive than anywhere else in Europe. I am told that this is not simply a matter of taxation as the rates of fuel duty are set equally for unleaded petrol and for diesel, but of refining capacity, which the hon. Member for Ynys Môn (Albert Owen), who is no longer in his place, also mentioned. Also relevant is the fact that North sea oil has traditionally been better suited for the production of unleaded petrol than for diesel. However, it does seem extraordinary that one can drive across most of Europe seeing prices for diesel consistently lower than those for unleaded, only to arrive in this country and find that there is a 7p differential in the other direction. In fact, we are one of the few countries that treats diesel and unleaded exactly the same for tax purposes, and many others, including France and Spain, tax diesel much less than we do.
Perhaps I should declare an interest at this point as the driver of a rather battered Y-registration diesel Golf with more than 150,000 miles on the clock, but my prime interest is that diesel tends to be the fuel of choice for business users and the freight and haulage industries. Its cost and the extent of taxation on it thus have a more direct impact on our economy and on prices in the shops than does unleaded petrol. Given the importance of diesel to business and the economy, will the Minister give special consideration to steps that could be taken to encourage the closure or reversal of that price differential, whether it be directly through fuel duty or indirectly through encouraging investment in refining capacity.
Like others, including my hon. Friend the Member for Wyre Forest (Mark Garnier), I am very concerned at the wide geographical price differentials within the UK. Although many have argued that this is a matter of rural sparsity and have put the case for a rural fuel derogation, which I accept, I want to put the case for urban centres such as Worcester that find themselves paying a higher price for fuel than their neighbours or competitors.
Mr Walker
I was just coming on to that, but I am very much in favour of the free market and want to encourage competition.
A glance at petrolprices.com shows the average price for diesel in Worcester yesterday was 142p compared to 139p in Cheltenham or 140p in Birmingham—two cities that it sits between. For the lowest priced unleaded, however, the differential increases from that 2p or 3p to a staggering 5p, with Worcester drivers paying 134p compared to 129p in Birmingham or Cheltenham. My constituents regularly raise concerns about that. They fear that there is insufficient competition affecting prices in Worcester. I realise that it is not the Minister’s job to set prices everywhere in the country, but I would appreciate a reassurance from her that the Government are determined to see active competition between retailers, and are doing all they can to stimulate it.
Other Members have mentioned supermarkets. I have been led to believe by constituents that Tesco and Sainsbury have changed their policies, and that rather than trying to be the lowest-price retailers of petrol in any given area, they now aim to sell at the average price for the area. Their purpose may be to prevent accusations of predatory pricing, but this is a very counter-productive way of doing that. I hope that the arrival of a new Asda store in Worcester next year will increase competition in the area.
Like many other Members, I am worried about the fact that constituents who need their cars to travel to work, and businesses in my constituency that need to use road transport, are paying too much for their fuel, and that too much of that cost consists of tax. I welcome the steps that the Government have already taken to protect our economy from the previous Government’s planned increases, the fact that fuel is 6p cheaper now than it would have been otherwise, and the Chancellor’s declaration that he wants to
“put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]
I believe that it has never been more important to do so, and I commend the motion to the House.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate. I was pleased to sign the motion, and to support his application to the Backbench Business Committee.
I have seldom witnessed so much unanimity across the Chamber, and I think that that is a sign of the seriousness with which people out there view the fuel situation. For a long time, my party—along with our friends in the Scottish National party—has argued in favour of some form of stabiliser. We tabled amendments to Budget motions in 2005 and 2008, and received support from outside organisations including the Freight Transport Association, the Road Haulage Association, the Federation of Small Businesses, and farming unions such as the National Farmers Union and the Farmers’ Union of Wales. Along with our colleagues in the SNP, we held an Opposition day debate on this matter in February this year, before the 2011 Budget in March.
According to the FairFuelUK campaign, fuel accounts for over 40% of all business transport costs. It is clear that continuing rises in fuel costs as a direct result of fuel duty rises will increase the pressure on companies that are already struggling to stay afloat, or perhaps already going under.
Roger Williams (Brecon and Radnorshire) (LD)
I agree with the right hon. Gentleman about the effect of high fuel prices on businesses. One way in which businesses can deal with it is by upgrading their fleets so that their lorries become more fuel-efficient, but that will not be possible if the current proposal to phase out 100% capital allowances is implemented.
Mr Llwyd
It is difficult enough to find a bank that will provide the money in the first place—when it rains, the banks want their umbrellas back—but I take the hon. Gentleman’s point.
Of course, it is not just businesses that are suffering. Families have been gravely hit by the rise in fuel prices, and, as has already been pointed out, fuel duty has a disproportionate impact on those who are least able to pay it.
Mr Watts
Does the right hon. Gentleman agree that the difference between this and earlier fuel price rises is that the Government’s present policy is to impose a pay freeze, while also allowing inflation to run at 5%? Families are being hit by the treble whammy of higher prices, inflation, and the increased price of petrol and other fuels.
Mr Llwyd
That is true. As we heard earlier from the hon. Member for Ynys Môn (Albert Owen) and others, families are being squeezed from all directions. According to figures issued yesterday by the Office for National Statistics, the poorest 20% of households pay proportionally twice as much in duty as the better off.
In rural areas such as my constituency, the cost of running a car is as important to people as their food budgets, because they cannot do without a motor vehicle. We have proposed the introduction of a fair fuel duty regulator that would prevent unexpected spikes affecting people at the pump through increased VAT, which is then pocketed by the Treasury. We suggested that an estimate be made of the fuel price over the coming six months, showing the amount of revenue that the Government would expect to receive, and that a cap be imposed if the price reaches an upper limit and VAT and fuel duty be frozen until the end of that period. The Government would, of course, receive their predicted amount, rather than a windfall from consumers who are already squeezed by the price hikes and unable to spend their income elsewhere.
Unfortunately, the then Labour Government in London stubbornly ignored the problems of rising fuel prices, and the motions in 2005 and 2008 addressing the issue were defeated. The Conservatives abstained in the vote on the 2008 Finance Bill, but decided only a few weeks later—in July 2008—that they would support a fuel duty stabiliser, a move that we welcomed at the time, believing that if they came to office they would introduce a mechanism similar to that we had been advocating. Sadly, when the matter was put to the vote in February this year, the voting pattern was reversed: the Conservatives and Liberal Democrats voted down our motion, while the Labour party abstained. This ever-changing position on a fuel duty stabiliser shows the political expediency of many politicians.
In March 2011 the UK Government cut fuel tax by 1p per litre and delayed some future rises, but the VAT increases have had a significant impact on prices. We voted against that move in summer 2010 and recommended a cut in June this year. The stabiliser model that we suggested is not the one that has been introduced by the UK Government, and it is clear that the problem has not yet been solved. Two further duty rises are scheduled for 2012, which could have dire consequences for business and motorists alike, especially given the ongoing economic difficulties, which are not likely to be solved in the near future.
We therefore need an effective and fair fuel duty stabiliser, and we must also look at pricing in rural areas. We must address the amount of VAT being levied, too. Most importantly however—and moving away from the impact of future fuel duty price rises—we also need to invest in renewable energy alternatives, to reduce our reliance on oil and other fossil fuels.
I heard the arguments about so-called Chelsea tractors. Where I live such vehicles are an absolute necessity—although they are often more downmarket than most Chelsea tractors. When I drive around the country, I have to do so because I cannot take public transport. In London and other conurbations, including Cardiff and Swansea, there is a choice. We need to make that choice viable. We urgently need to address this issue.
Dr Sarah Wollaston (Totnes) (Con)
When Labour came to power in 1997, fuel duty stood at 36.8p per litre. When it left office in 2010, the price was more than 57p per litre—“a pain in the gas” as they say in the United States. I therefore welcome the early and decisive action taken by the Treasury in taking 1p off fuel duty, scrapping the duty escalator and delaying the 3p per litre rise. Many Members have today made a compelling case for why we now need the Treasury to go further, however.
I represent a large rural constituency in south Devon, and having a car in order to get to work or exercise choice in education is not a luxury; it is an absolute essential. My constituents spend a far greater proportion of their disposable income on fuel than those who live in cities.
A further 3p rise in January would not just hit householders, however; it would hit essential local businesses, too. Some 65% of all the UK’s groceries are delivered on retread tyres produced by a company in my constituency: Bandvulc tyres. It also exports to cities across Europe. It is a significant employer and wealth generator, but a 3p a litre rise in fuel duty would cost it an additional £24,000 a year, because it uses more than 500,000 litres of fuel a year. It is a family-run manufacturing business producing a sustainable product and creating local jobs. It wants to stay in Devon but knows that it would make economic sense to relocate part of its business to eastern Europe as a result of the fuel duty rise. There are similar examples among other businesses in my constituency.
Another very important sector in my constituency is tourism. I am talking about businesses such as Sharpham wines and cheeses, which attracts 7,500 tourists a year and employs up to 40 people. More importantly, it is in the top six wine producers in the UK and it is another wealth creator that exports across Europe. That business spoke of the ripple effects of a further rise in fuel duty, as did many others. A business that I visited last week, Palladium Building Supplies, told me of the knock-on effect to the entire building industry across south Devon that there would be if we go ahead with this rise.
Mel Stride (Central Devon) (Con)
My hon. Friend is making a powerful point about the effect on businesses. Does she accept that not only are these high fuel prices damaging businesses, but that, in turn, that is leading to less revenue to the Exchequer, because businesses are becoming less profitable?
Dr Wollaston
My hon. Friend makes an excellent point. This is about whether a 3p a litre increase will generate any income. Many of my constituents feel that it will lead to a drop in income, because they will simply not be able to fill up their cars.
Jo Swinson (East Dunbartonshire) (LD)
I agree with the hon. Lady’s case, which has been made by others, that the Government need to take account of the impact of the high price of fuel and the hurt it is causing to families, individuals and businesses. She mentions an important short-term measure, but does she agree that in the medium and long-term it is also important that the Government take action to reduce our dependency on oil, the price of which is only likely to rise, and look towards investment in things such as electric cars and charging infrastructure across the country, so that we will be set for the rest of the 21st century?
Dr Wollaston
My hon. Friend makes a good point. Indeed, one organic business in my constituency said that it would find a rise more acceptable if it could be seen directly as a green tax. Unfortunately, that is not the case. In my constituency, people will be badly hit by a double whammy, in that the bus service operators grant is set to be reduced by 20% next year. Just when they cannot afford to use their cars, people are being hit by a real threat to rural bus services, which are already at a critical level in south Devon. I hope that the Minister will set out what proportion of the rise will be set aside for green taxation purposes.
Priti Patel (Witham) (Con)
Does my hon. Friend agree that the points she is making show precisely why motorists need to see greater transparency in how fuel prices are determined? I am thinking, in particular, about the disparity between pump prices and the price of oil.
Dr Wollaston
I fully support that, because in south Devon those on the lowest incomes will be hardest hit. They will be spending yet more of their disposable income on fuel or they will be waiting at the side of a road for a bus service that can no longer afford to operate.
Fiona O'Donnell (East Lothian) (Lab)
I will keep my remarks brief and the reason for that makes me rise to my feet with a rather heavy heart. The reason is that I want to hear more Government Members speak, because they are playing us off the park today; their damning analysis of the Government’s lack of strategy for economic growth far exceeds the efforts of those of us on the Opposition Benches. It is almost incredible listening to them. We would not believe that they are in government; it is as if somebody else did this.
I would not go as far as to say that I rise to bury the motion, but I certainly do not rise to praise it. [Interruption.] These are the benefits of a classical, if comprehensive, education, which some Government Members may have had. I rise because many of my constituents have been in touch with me in support of this campaign. I have to say that I have gone back to them trying to dampen down their expectations. What we actually have before us reminds me of when my children have done something really bad and they are working up to telling me. They say, “Mummy, I love you. Mummy, your hair looks really nice today. Mummy, I have been really good” and that seems to be the approach of the motion. It is almost simpering in the way in which it cosies up to the Government, praising them for action which it then goes on to identify has clearly failed in its objectives. These are objectives that my constituents want. I have been back to my constituents and pointed out the strong language of this motion, which acknowledges the problem, “notes” there is a wee bit of a problem and “further notes” the problem. It says that all this will be considered and, best of all, says that all this is being done in the name of “sustainable growth”. I presume that means keeping it low, with no growth at all, because that is what the Government are delivering.
Fiona O'Donnell
I shall not give way at this point because I am keen to make progress and allow others to contribute.
My constituency is largely rural and my constituents rely heavily on their cars not just to get to the shops but to engage in the big society—to take their daughters to Brownies and their sons to Scouts, or their sons to Brownies and their daughters to Scouts. They go out to reach the cheaper petrol at Asda up at Dunbar. That is the reality of living in East Lothian. My constituents suffer a double whammy and I find it really hard to listen to the hon. Member for Dundee East (Stewart Hosie) going on about what this Government have not done, because another Government could do something to make things easier for my constituents to get around East Lothian—the Scottish National party Government in Holyrood could re-regulate the buses.
Fiona O'Donnell
No I will not. The hon. Gentleman should sit down and listen to what I am going to say before being so eager to get to his feet. He should let me finish this point.
The Scottish Government could have re-regulated the buses so that we could have a service in East Lothian that meets the needs of my constituents, instead of meeting the party election funding of the SNP Government. They have not taken advantage of that option, so in East Lothian we have the double whammy of rising prices at the pumps and a poor local bus service that is being further cut by an SNP council.
Mr David Hamilton (Midlothian) (Lab)
As my hon. Friend’s neighbour in Midlothian, and given that 56% of our people travel to work in Edinburgh every day, may I say that bus availability is a really big issue? The re-regulation of bus services is key, but the only people who can do that are that lot over there on the SNP Benches.
Fiona O'Donnell
My hon. Friend and neighbour is absolutely right. The SNP should stop talking about what they want other people to do and which other powers they want and instead start using the powers they have.
Mr MacNeil
The hon. Lady has to ask herself whether she wants the Conservative Government here in Westminster to have taxation powers over Scotland or whether she wants Scotland’s powers back in Scotland at the Scottish Parliament.
Fiona O'Donnell
That is not the only choice. I want a UK Government who do the best for all the people in the UK—not just those in the Western Isles, Glasgow and Edinburgh, but those in Liverpool and London too. I note that the hon. Gentleman did not say why his party in Holyrood did not support a private Member’s Bill to re-regulate the buses. He should stop whingeing about what he cannot do and start doing something with the powers he has.
Fiona O'Donnell
No; the last interruption was not very satisfactory—I am not taking another risk.
I find myself in a familiar situation. I spoke in a similar debate not very long ago about a haulage company in East Lothian that was about to go bust because of fuel prices. I remember an hon. Member from somewhere on the Government Benches saying something about claiming back VAT. Unfortunately, I did not realise at that time that the company was not even registered for VAT, so that was not an option. The company has gone out of business and those jobs have gone. Others in East Lothian are trying to find work but the reality is that those jobs as a rule are not in the county—they are in Edinburgh. Given the poor local provision of public transport, they are forced to take to their cars. That is a real problem for making work pay for my constituents. If the Government are serious about getting people back to work they have to enable rural communities.
I am sorry that the hon. Member for Penrith and The Border (Rory Stewart) is not here. His contribution was not so much a speech as a postcard from some rural fantasy that he sent to the House. He spoke about how important this debate and this motion are, but I remember the last time there was a debate on this issue in which the will of the House was unanimously expressed—
George Eustice (Camborne and Redruth) (Con)
I welcome this debate, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing it. I also welcome some of the very good actions that the Government have taken to date, most notably the suspension of the fuel duty escalator, the cut in fuel duty, and the rural rebate that is being considered, which we hope will be piloted in the Isles of Scilly, not far from my constituency. I agree with the many Members who have said today that fuel tax is a regressive tax that tends to hit the poorest, and rural areas, hardest.
Sheila Gilmore (Edinburgh East) (Lab)
I find interesting the discovery by Government Members, including the hon. Gentleman, that taxes on spending are regressive. When that argument was about the increase in VAT, it seemed to be ignored, so has he changed his mind on VAT, too?
George Eustice
The issue of VAT has been covered widely by others. I would just say that I think all Government Members regret the fact that the Labour party made such a pig’s ear of running the economy that we had a £150 billion black hole in our finances.
I would like to focus on a separate but linked fact: fuel tax has a disproportionate impact on areas that are geographically peripheral. I come from Cornwall, and there is no doubt that fuel tax is a regressive tax that hits Cornish businesses far harder than businesses in the main population centres.
Glyn Davies (Montgomeryshire) (Con)
I am grateful to my hon. Friend for giving way, because the issue is particularly important in my constituency too. High fuel prices act as an anti-regional-development policy. Not only are they a cost on business, but they discourage business from locating in certain places. They work very much against the thread of Government policy in other areas.
George Eustice
I completely agree. That will be the main thrust of what I say. I was in business in Cornwall; indeed, on many occasions, I drove a lorry that took our excellent Cornish strawberries to Birmingham. The reality is that Cornwall is 300 miles away from London, and 260 miles away from Birmingham. We have to drive the best part of 100 miles just to get to the seat of my hon. Friend the Member for Totnes (Dr Wollaston). Let us look at how that translates into tax. A typical 16-tonne lorry doing a round trip to London would incur, in total, tax of £220, just on that one trip. Let us compare that with a lorry driving from Birmingham to London: the tax taken for that would be only £80. A similar operation in Cornwall has to pay three times more tax. That is unfair, and it is felt acutely by businesses in the primary sector, particularly in areas such as fishing and farming, in which Cornwall has a comparative advantage.
If we are serious about developing a regional policy, we have to help the most peripheral regions to develop industries and jobs in the sectors in which they have a comparative advantage. The irony is that places such as Cornwall have EU grants to help develop businesses in the areas where we have strengths, which include food processing, farming, and green energy. The regional growth fund has a similar purpose. We are undermining those efforts by having a regressive tax through high fuel duties. The impact is to compound the single most important disadvantage that the regions have, which is their distance from the market. As I say, that is particularly noticeable in Cornwall. Our climate gives us a comparative advantage; we grow potatoes early, and can grow cauliflowers in winter—bulky commodities that cost a lot to transport. Of course, with our marine resources, we have fishing, too.
I want to finish with a suggestion on how we might go forward. Alongside the rural rebate, which is due to be piloted, we should consider, perhaps as a strand of regional policy, some kind of rebate for businesses in peripheral regions such as Cornwall. It should not be beyond the wit of man to devise such a scheme. To be eligible, a business would have to be located in a county such as Cornwall. The rebate would be available only on fuel supplies delivered to an address in the area. As for how we would give the rebate, we have heard that most businesses that run a transport fleet would be VAT-registered, so it would be possible to have some kind of fuel duty rebate that runs alongside the VAT return. I know that none of these things is easy; it would take some work to develop the detail of such a policy, but it would be an interesting idea to look at. It could be a very powerful regional policy. In the meantime, I commend the motion to the House, because it is important that there be cross-party consensus on how to deal with the issue.
Rosie Cooper (West Lancashire) (Lab)
More than 100,000 people have added their names to an e-petition, and they and many millions more want to know whether the Government are prepared to listen to them and take the necessary action to ease the burden on hard-working families and businesses and, indeed, on our struggling economy. Out of that desire for action, and to support people in my constituency, I added my name to the amendment tabled by my hon. Friend the Member for St Helens North (Mr Watts) that called on the Government to reverse their VAT increase and, in doing so,
“cut 3p off a litre of petrol”.
Nick Smith
Very shortly, the Chancellor will give his autumn statement, so does my hon. Friend agree that that is a terrific opportunity for the Government to signal a temporary cut in VAT that will both help drivers and boost our economy?
Rosie Cooper
I do indeed, because the general public are simply not interested in any more words, any more knockabout, or any more “he said, she said”. They have signed up in their thousands for action to reduce the cost of fuel and its impact on families and businesses. Study after study shows that transport is integral to an individual’s ability to access employment opportunities and to take part in social and cultural activities. For many people, access to transport is the difference between social exclusion and social inclusion. I could give examples from my West Lancashire constituency that illustrate that the cost of fuel has a significant impact on people, whether they live in urban or rural areas.
The sixties town of Skelmersdale was designed with the car as king. There is no railway station or pavement system to allow people to walk across town, and public transport services are limited. That means that residents rely on their car to get to work and to get around. In many cases, workers are forced to use taxis to travel to work, and if fuel costs increase, residents in those hard-pressed areas must decide whether travelling to work is financially viable.
Tom Blenkinsop
Is my hon. Friend concerned, as I am, that the policy of the Department for Work and Pensions of forcing unemployed people to look for work within a radius of 90 miles might be undermined by the fact that fuel costs are so high?
Rosie Cooper
In my constituency, to be forced to look for work within 9 miles is darn near impossible because there is no transport infrastructure.
Andrew Selous (South West Bedfordshire) (Con)
I think that the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) meant to say that it was 90 minutes, rather than 90 miles, which is quite a significant difference.
Rosie Cooper
Fine: my answer remains the same.
There are many rural communities in West Lancashire, and in those areas, public transport is almost non-existent. The main services in villages have closed down, so people have to travel to the main towns to shop, to go to the doctors or to go to work. They rely on their car to get about or, in the case of some older people, on the kindness of a friend to give them a lift. Yet again, if people cannot run their car because of costs, that has a negative effect on all aspects of their life. I am concerned about the impact on both the young and older people in rural communities, as they may become ever more isolated, making them more vulnerable. How do pensioners on a fixed income that has been stretched to the limit find the extra money to cope with further fuel increases?
Some people argue that a reduction in fuel duty and thus fuel prices would mean an increase in the number of journeys and carbon emissions. I absolutely understand that argument, which reflects the fact that there is a difficult balance between our desire to tackle climate change and enabling people to go about their daily business, go to work, support their family, and run their company. Simply pricing people out of their car is not a real solution, especially in areas such as West Lancashire, where there is no real alternative in place.
It strikes me that with a flatlining economy, rising unemployment and businesses unwilling to invest because of the current uncertainty, now is exactly the time for flexibility and common sense. People like those living in West Lancashire—hard-working families and local businesses employing people—are looking to the Government to help them out just a little. They want help to ease that burden, and it is probably the least they are owed, after broken promises to introduce a fuel duty stabiliser, a failure to scrap the planned fuel duty increase and a decision to increase VAT. It is time for social justice and fairness. It is time for the Government to listen and to act. People want them to do it, and to do it now.
Mr Marcus Jones (Nuneaton) (Con)
I begin by thanking my hon. Friend the Member for Harlow (Robert Halfon) for working so hard with colleagues and with the public to secure this vital debate, which affects not only drivers, but every citizen in this country. Virtually everything we consume is carried by road, so when the cost of fuel increases, we all feel the extra burden. When we do our weekly shop, when we pop down the local pub for a swift half or when we buy virtually anything else, we notice that the cost has increased. That is why, in my response to the Chancellor’s last Budget, I said in the House that my constituents would have breathed a sigh of relief when the Chancellor scrapped the duty escalator increase programmed into the Budget by the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling).
Graham Jones
The hon. Gentleman makes a valid point that family budgets are under pressure. The subject of the debate is important to my constituents—I received about 60 letters. Does he agree, though, that the increase in VAT to 20% is hitting family budgets and adding £450 to the average family’s tax bill?
Mr Jones
I thank the hon. Gentleman for his comment. Like many Opposition Members, he is presenting a confused view of things. His party did not vote against the VAT increase. One minute the Opposition seem to want a VAT reduction only on fuel, which would be difficult to achieve because of the situation with the EU. In fact, as has been pointed out, it would be illegal. The next minute the Opposition want a full VAT cut, which I find strange. It is yet another uncosted policy to add to the other five points in the five-point plan. Perhaps we should call it the six-point plan for bankruptcy that the Labour party is advocating.
I remind the House that in the last Budget the Chancellor also cut 1p off the price of a litre of fuel. Although that is a small cut, it was welcomed by many. Thus at the last Budget the Chancellor saved the motorist from an impending increase of about 26p a gallon. That move showed that my right hon. Friend the Chancellor had listened to the people of the country and the FairFuelUK and other campaigns that have lobbied MPs and the Government in a reasoned, fair and pragmatic fashion. My right hon. Friend was probably wise to listen, because we all know now that certain surveys tell us that 85% of the public think the cost of fuel is hurting people and businesses.
I sincerely thank the Chancellor for taking that course of action. I hope that after today’s debate the Minister will pass on to the Chancellor the comments made by Members, and that he will think very hard, as he did before, and try to mitigate or not put through the increases in fuel duty programmed in for 2012.
Jason McCartney
To follow up my hon. Friend’s earlier comments about having a swift half, I recently spent an evening serving behind the bar in one of my local rural pubs to celebrate British pub week—the Wills O’Nats in Meltham, a very rural pub a mile from the nearest houses. All the staff have to drive there. All the customers drive there, of course, with a designated driver and with soft drinks. So it is important not just for enjoying a drink, but for employment opportunities that we support our rural pubs and that we try to do what we can with the fuel duty to help such employment.
Mr Jones
As my hon. Friend rightly points out, that is a vital issue for our local communities.
The road transport angle is vital to my constituency, where many jobs depend on the industry, as it is a major road and network hub for UK distribution. Many transport and haulage companies are suffering greatly. As we have heard, most heavy goods vehicles do about 8 miles to the gallon, so the planned 3p increase in January 2012 will add about £15 a week to the cost of running a vehicle, according to figures I have received from the Freight Transport Association. For companies with fleets of more than 50 vehicles, of which there are several in my constituency, the planned increase will increase their costs by £37,000 a year. They will either absorb the cost or pass it on to their customers. With such low operating margins in the transport sector these days, I suspect that it is inevitable that the increase will be passed on, thus adding further inflation to the supply chain.
Furthermore, an increase would also widen the gap between UK and continental fuel prices and increase the number of foreign trucks operating in the UK. We should think carefully about that, because foreign trucks pay no UK fuel duty, no UK road fund licence and no UK employment taxes. That will increase their ability to undercut UK hauliers, potentially put UK jobs at risk and exacerbate the loss of tax take that hon. Members have mentioned this evening. Smaller haulage companies tell me that fuel prices are crippling their cash flow, as they have to pay at the pump or on very short seven-day credit terms, whereas their customers want 30, 60 or 90-day credit terms.
I would like to say more on this important matter and talk about the general motorist and car driver, but unfortunately I am running short of time. In conclusion, deficit reduction is rightly the Government’s first priority, but I appeal to the Chancellor to listen to the public on this vital issue, particularly before his autumn statement, and see what he can do to minimise the impact that it might have on our hauliers and motorists.
Sammy Wilson (East Antrim) (DUP)
I welcome the opportunity to speak in the debate, because the price of fuel is an important concern for many of our constituents. I will start with two observations. First, I am glad that there has been little evidence today in the House of the green zealotry that drove the increase in fuel prices—a point we must not forget, because it was argued that that was a way of weaning the population off fossil fuels. Secondly, although Members have talked about the role of petrol and oil companies, let us not forget that 60% of the cost of fuel is accounted for by Government action. Therefore, this is the appropriate place to debate what can be done about it.
The Government’s record on this differs from what they said in opposition. They had many fine ideas in opposition. Indeed, in “A Fair Fuel Stabiliser” they indicated that any reform should help families when the cost of living is rising and reduce the inflationary impact on the economy—but what has the record been since they came into power? In Northern Ireland, fuel bills for families have increased by an average of £254 a year for those using diesel and £284 a year for those using petrol. The Government promised in opposition to do something for families when the cost of living was rising, but their actions have been different.
They made clear in opposition what they thought about an increase in VAT. Indeed, in an intervention in this House in 2008, a Conservative Member asked the then shadow Chancellor:
“Does my hon. Friend not agree that Labour’s plans to increase VAT to… perhaps even 19.5 per cent…. after the next election will hit hard-working families hardest? Should the Government not be ashamed of themselves?”
The answer was “absolutely”, and that the Conservatives would keep reminding the then Government of that
“every…day between now and the…election.”—[Official Report, 26 November 2008; Vol. 483, c. 741.]
The Conservatives did that, but as soon as the election was over and VAT went up to 20%, it all went quiet on the Government Benches, and we did not hear much from them about VAT hitting the poorest families hardest.
During this debate, Government Members have said, “Ah, yes, but we reduced fuel duty.” On the one hand, fuel duty was reduced; on the other, VAT was put up. The Chancellor gave, and the Chancellor took away. That is the truth for hard-working families.
Jim Shannon
I thank my hon. Friend for his passionate speech. As he represents a rural constituency similar to mine, has he been contacted by farming communities regarding the effect of fuel prices on food production, which affects everybody in the country? There is the price of the fuel for their machinery, but the increased fuel prices also get passed on to them in the price of fertiliser and other things that they use on the farm. Is he concerned about that, and about its impact on food prices?
Sammy Wilson
That just illustrates the inflationary impact of the situation, not just on individual families but throughout the economy, and the Government ought to bear it in mind as they ask themselves, “What shall we do to regenerate the economy?”
Various reasons why it is difficult to do something have been given. The first, which we have heard from Government Members, is that if we try to reduce VAT Europe will intervene. That is another reason for renegotiating our position on Europe—but leaving that aside, I note that 75% of the tax is not VAT but fuel duty, so even if there is a problem with Europe, the Government have another way of dealing with the problem.
The second reason that has been given has involved asking, “What about deficit reduction?”, but there does not seem to have been any difficulty with deficit reduction when it has come to bailing out the euro, with £12.5 billion having already been pumped into it and the Government talking about more money going to the International Monetary Fund. Indeed, as Government Members have said, the measure could almost be self-financing anyway: if, for example, it led to a rise in demand, there would be more duty; if it cut costs, more corporation tax would be paid.
Mark Durkan (Foyle) (SDLP)
Does the hon. Gentleman recall that previously, whenever the Scottish National party or Plaid Cymru moved their various motions, Labour voted them down and the Tories abstained, and then the Tories voted them down and Labour abstained? Does he believe that there must be something particularly volatile in fuel prices on the road to Damascus to bring about such changes in outlook?
Sammy Wilson
I believe in Damascus road experiences, and if they help the consumer that is a good thing, so I look forward to that. I hope that the Government will have a Damascus road experience on this issue. Consumers would be pleased if they did.
In opposition, the Conservatives made promises. Now that they are in government they hold in their hands the levers to help consumers, and from this debate will come the expectation that promises made in the past will be delivered by those who hold the levers and have the ability to use them in the present.
Andrew Selous (South West Bedfordshire) (Con)
I, like others, warmly congratulate my hon. Friend the Member for Harlow (Robert Halfon) on bringing this important debate to the House today.
In my constituency the car is essential really to all my constituents. We have three market towns and 14 villages, and although the bus companies do valiantly they cannot serve all my constituents, many of whom have to commute a long way—for 90 minutes or even longer—out of my constituency to find regular work. When there were difficulties with the buses in villages such as Hockliffe and Eggington there was enormous upset, because many people in those areas find motoring so expensive.
In rural areas, on average only 10% of people do not have a car, because they are so necessary, and more than half of households need two cars to get their families around.
Anne Marie Morris (Newton Abbot) (Con)
Is my hon. Friend aware that in rural constituencies such as ours the cost of filling up at the petrol pump comes to 10% of the wages of an individual on the lowest income? That is an enormous amount, and does he agree that it puts a particular burden on those living in rural communities?
Andrew Selous
My hon. Friend is absolutely right: that adds insult to injury.
The huge disparity in petrol prices experienced by so many of our constituents is extremely difficult. In addition, the disparity between the price of diesel and unleaded petrol concerns me greatly. Diesel used to be more expensive. We then had parity, and now diesel has shot up again. It is apparent that we have an inadequate supply of UK refining capacity for diesel in this country. We have to import much of our diesel from Russia, which causes particular problems given that around half of all car sales are of diesel vehicles.
Tessa Munt
There is also the increase in prices for liquefied petroleum gas, which has gone up astronomically in the past few years.
Andrew Selous
My hon. Friend makes a good point, and I am glad that she has been able to get it on the record.
Of course, the Government are in a very difficult fiscal position because of the economic mismanagement we inherited. Every day we are still spending around £330 million more than our income, and these things are not easy for Treasury Ministers. In spite of that we have managed to reduce the cost of fuel by around 6p per gallon, which my hon. Friend the Member for Harlow said would equate to around £274 less spent on fuel per motorist in this Parliament. That is very welcome. Government Members are instinctive tax cutters, which is why we have set out plans to reduce corporation tax to the lowest rate in the G7 by the end of this Parliament. That is where our instincts lie, and my hon. Friend the Minister knows that.
In contrast to some of the other speakers today, I want to consider the future in relation to fuel prices and talk about how some of the new technologies will be able to help save our constituents money. On 10 May I held a debate in Westminster Hall, in response to which the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), told hon. Members that people who buy a Nissan Leaf would have an average reduction in their motoring costs of around £1,000 per year, and that there would be a payback on the total costs within seven years. He also sent me further information to show that the seven-year fuel costs of a Ford Focus are £6,827. For a Toyota Prius that figure is £4,034, and for a Nissan Leaf coming on sale next year, it is just £517. Some 48 other makes of electric vehicle will be available soon—for example, the Vauxhall Ampera and others. I am delighted that in my constituency, charging points for electric cars will be installed at Ashton square by the Grove theatre car park in Dunstable, and at the West street and Hockliffe street car parks in Leighton Buzzard.
We have rightly heard much about the problems faced by small businesses. We need to consider the use of biomethane for trucks and hydrogen fuel cell technology for buses and heavy vehicles. At Nagoya airport in Japan all the buses are powered by hydrogen fuel cells. We need to ensure that we develop a hydrogen refuelling network, as we are doing for electric vehicles. Our constituents will then be able to enjoy cheaper fuel.
We also need to look at what is happening internationally. In Israel and Denmark the Better Place company is engaged across the whole economy. On 1 November Mr van Erck of that company told a meeting of the Westminster Energy, Environment and Transport Forum, at which some hon. Members were also present, that within three years the best-selling vehicle would be electric. Not only can we have cheaper motoring for our constituents, but the UK is also on track for a sizeable share of what HSBC estimates to be a $677 billion market by 2020. That was mentioned by Michael Hurwitz, a director of the Government’s Office for Low Emission Vehicles on 1 November. Such a plan would stimulate the economy and create British jobs for British workers, as well as lower prices for our constituents.
The UK is in a race to design, manufacture and power cheaper low-carbon vehicles. We have a once in a lifetime opportunity to lead in this industry as we lead in Formula 1, with eight of the Formula 1 teams based in “motorsport valley" in the United Kingdom. Such a challenge will be good for our constituents’ pockets and good for the economy. I recommend to the Government that we power forward in this area, for the whole of the United Kingdom.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I want to address this debate from the perspective of a low-paid part-time worker. Working families will be told to earn at least £212.80 a week or face having tax credits removed. In my constituency, particularly in places such as rural east Cleveland, as well as suburbs such as Hemlington and Coulby Newham in Middlesbrough, many women work part-time at or just above the minimum wage. After recent public transport cuts by the Government affecting over 90% of local authorities outside London, those women are forced, in the main, to travel by private car. This will become even more the case next year when the Government remove the subsidy for bus fares, further increasing by 20% the cost to the customer of public transport in the form of buses.
Nic Dakin (Scunthorpe) (Lab)
Does my hon. Friend agree that women are particularly badly affected by fuel prices?
Tom Blenkinsop
That is precisely the point I am making. The lack of a Government growth strategy is making it even more difficult for women to exist within or get into the labour market.
Those women and other workers, particularly in my constituency, need affordable transport, and the Chancellor’s 20% VAT rate is counter-intuitive to that requirement. The economic climate is such that growth in private sector jobs is flatlining, and such jobs are mainly part-time and low paid. The problem is that people who want to work full-time can only get part-time jobs. Part-time employment cannot fund the everyday necessity of a car, and part-time workers are increasingly reliant on a diminishing—
Jim Shannon
Is the hon. Gentleman aware that over the past 50 years car ownership has increased from 5% to some 51%, and that those in a lower income bracket are most affected? Does he not think that that clearly underlines the case that we need lower prices?
Tom Blenkinsop
Yes. We have heard today the very good arguments about the differences between rural and urban areas, but in certain rural communities in my constituency there is less than 30% car ownership, so there are also class and income issues, as well as a diminishing public transport system that is becoming more and more expensive because of Tory cuts and rising fuel prices.
Female part-time workers often visit two or three workplaces. I used to cover, as a community trade union official, Teesside Cast Products, a steelworks in Redcar. I also represented those in OCS, who worked not only as cleaners and canteen staff but elsewhere as carers on a part-time basis. One of the women I knew did a total round trip of approximately 40 miles a day between two or three work sites. Her employers frequently attempted to remove or decrease her company subsidised fuel costs through unilateral variations in terms and conditions. The Government’s attack on her tax credits and their policy of 20% VAT made it almost impossible for her to work on a day-to-day basis. If it were not for the union fighting for her terms and conditions on fuel payments from her employers, she would undoubtedly have become a Department for Work and Pensions statistic and have been downgraded into a burden on the state rather than the hard-working unionised woman I know her to be.
The Office for National Statistics has demonstrated that in 2010 the poorest 20% of households spent 3.5% of their disposable income on petrol and diesel, compared with 1.8% in the case of the richest fifth of the population. Meanwhile, in the same period, Shell’s profits more than doubled to £4.3 billion, Exxon Mobil made £6.5 billion, and BP made £3.2 billion. We must take note that the squeeze caused by the Chancellor increasing VAT from 17.5% to 20% has added 3p to the price of a litre of petrol. Diesel keeps industry, and the vital service sector that it requires, flowing, much like capital and skills. More than this, public services, including Royal Mail, such as it is—it is going to be fractured and regionalised by privatisation—police vehicle response units, ambulances, fire services and councils incur increased costs via the 3% VAT increase.
Christopher Pincher
I know that the hon. Gentleman is a decent man, but will he explain why, if he really wants to see fuel price reductions, he fought the general election on a manifesto to support the fuel duty escalator that would have put 5p on a litre of petrol this April and increased the duty every year for the next three years?
Tom Blenkinsop
That was not in our manifesto, although the Tories’ manifesto clearly stated that they would not raise VAT.
Budgets in Middlesbrough, Redcar and Cleveland have been most severely cut by this Tory-Liberal Democrat Government, with cuts of up to 10% for those local authorities. Leafy areas in the south-west such as Dorset have had a 1% budget increase, and we are feeling the pain the most. Our area provides the manufacturing-led recovery for this country, but we are not getting the financial benefits from this Government. The 20% VAT rise and its effect on fuel is hurting us.
The public organisations that I have spoken about consequently reduce their contracting of car and van fleet services, which hurts small businesses in communities such as mine. Those small businesses in turn reduce their staff numbers as they are squeezed by the direct increase in fuel prices due to VAT and the indirect negative multiplier effect of public service cuts.
As Opposition Members predicted, killing off public services will not, in and of itself, evacuate space for the private sector to fill. It has simply intensified the pain of already difficult budget cuts. That has happened because of the Chancellor’s economic decisions before the eurozone crisis. The statistics from the Office for National Statistics and the Office for Budget Responsibility show that the cuts were happening before the eurozone crisis, despite the Government’s attempts to use it as a smokescreen for their failed economic policies.
Sarah Newton (Truro and Falmouth) (Con)
This is an important issue that affects every home in my constituency. I add my thanks to my hon. Friend the Member for Harlow (Robert Halfon) for securing this debate.
That appreciation is shared by my constituent Annalise Lucas from Cubert. She is a member of Network Cornwall, which is a network for female small business owners in Cornwall. Like many mums with small children, she balances work—running her costume design business—with looking after her family. Like many hard-working families in my constituency, Annalise and her husband, who works at Newquay Tretherras school, are finding the ever-increasing fuel prices, coupled with the higher costs of living in Cornwall, a real struggle.
Andrea Leadsom (South Northamptonshire) (Con)
Is my hon. Friend aware of the many young mothers who work part time and who struggle to afford the cost of filling their car to get to work?
Sarah Newton
I am aware of that concern, especially in rural areas where there is no option but to use a car because of the limitations of public transport.
Hard-working families and mums who are raising their children are the backbone of communities across my constituency. I look forward to hearing from the Minister what more the Government can do to support those families. We all agree that it is vital to sort out the nation’s finances, but we must support people to carry on looking after their families.
Sir Robert Smith
The hon. Lady is making an important point, which has been expressed across the House, on the strength of feeling about the need to tackle fuel price rises. Perhaps one challenge that comes from this debate is how the Office for Budget Responsibility calculates the benefit that the Government get from higher fuel prices through the windfall in VAT revenues and other revenues. The OBR argues that that does not count for anything. Perhaps in revisiting that we could also address the argument that a reduction in fuel duty might increase revenues by increasing spending.
Sarah Newton
What we are all agreed on today—I hope we will hear this from the Minister—is that we should leave no stone unturned in finding ways to stop the increases in fuel prices and in starting to tackle the problems that we have heard about in this debate.
I will not use the limited time that I have to duplicate the points that have been made by my colleagues, the majority of which I agree with. However, I will develop the issue raised by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) about the impact of rising fuel prices on volunteer transport schemes. Like many rural areas, my constituency does not have good public transport. It also has a high proportion of elderly people, many of whom are living in poverty.
We have one acute hospital that serves everybody living in west Cornwall. Volunteer drivers play a vital role in taking people to hospital, to their GPs and to other therapeutic appointments. Volunteer-run minibuses are also very important. One such service, Transport Access People, run by Age UK Cornwall, is based in my constituency. TAP has just under 30,000 clients and its volunteer drivers have clocked up more than 2.6 million miles. It currently has 250 volunteer drivers, but it has lost six in the past couple of months because of rising fuel prices.
Sheryll Murray (South East Cornwall) (Con)
Transport Access People covers not only the west of Cornwall but the whole of Cornwall. In my constituency, TAP is finding it extremely difficult to get volunteer drivers because of the excessive fuel costs that they have to pay.
Sarah Newton
My hon. Friend makes a very good point, as usual. To cover the increased costs that she mentions, TAP has had to put its price up to 41p a mile. It is worried about the future, because it may have to raise it to 45p a mile, which is what similar organisations in other parts of the country are having to charge. Given that the average journey is 25 miles, and that it is not uncommon for patients to travel 50 miles for an appointment, we can see how prices are mounting up for patients. Some are entitled to free travel, but many people on very modest incomes are not.
A report by CAB Cornwall, the citizens advice bureau, has highlighted the fact that some people are not attending hospital appointments because they cannot afford to. That is a waste of precious NHS resources and not at all good for the patients concerned. Work is being done locally to try to address that, with more NHS services being moved closer to people’s homes, but that will take time. I hope that the Minister will commit to considering what further help the Government can provide to keep these much-needed volunteer drivers on the road.
Matthew Hancock (West Suffolk) (Con)
Are there not unfair differences in the local price of fuel as well as the national price? In Haverhill, in my constituency, fuel is up to 10p more expensive than in nearby Bury. Is that not patently unfair?
Sarah Newton
It certainly is, and I am sure that that is the experience of drivers right across my constituency and Cornwall.
We have heard from all Government Members who have spoken that they absolutely understand that the Government’s priority is to reduce the deficit and sort out the nation’s finances. People in my constituency broadly understand that. However, I hope that we can ensure that cuts are made and revenues increased fairly, so that they do not adversely affect some of the most vulnerable and poorest people in my constituency who are being affected by the lack of volunteer drivers to take them to hospital.
Sheila Gilmore (Edinburgh East) (Lab)
Like the hon. Member for Truro and Falmouth (Sarah Newton), I want to talk about some of the issues that affect people in my constituency. I feel a little out of place in this debate: so many Members from rural constituencies have talked about either the rural idyll or the rural hell that I feel, as I represent an urban constituency, that I should perhaps not venture into the discussion. However, fuel prices do of course affect urban as well as rural areas.
I wish to develop points about issues such as community transport, which is essential for a lot of elderly people to be able get to activities such as lunch clubs, and to get out of their own homes instead of being housebound. The local organisation in my area is struggling because of the reductions in grants, which are a result of local government cuts. Its core funding, which allows it to be run and administered, has been cut, and at the same time fuel prices are increasing. If it increased its charges to the organisations that use it, that would just bounce the problem on to another set of voluntary organisations—the ones that provide lunch clubs and other activities.
Mr McCann
Does my hon. Friend accept that as well as the austerity cuts in the United Kingdom Parliament, with the Government going too far, too fast, which is having a disproportionate effect, the Scottish National party Administration in Scotland are making unsustainable spending decisions? They are placing the burden on local government, which in turn has to make tough decisions about local spending.
Sheila Gilmore
We have had the experience of four years of a council tax freeze, which people no doubt think is a wonderful thing on one level, but which is presenting huge problems to voluntary organisations.
The other organisation that I wish to mention briefly is a social enterprise—a laundry service—operating in my constituency. It not only provides a valuable service but tries to be commercial and turn a profit so that it can reinvest. It employs many people with learning difficulties, for example, and provides them with valuable training. However, that laundry service goes round collecting sheets and towels and so on from hotels and other large organisations, which involves transporting them to and from the people contracting with it. That organisation, which will certainly not benefit from being able to reclaim VAT, for example, is struggling in this financial climate, yet it is an important organisation, because it provides not just a useful service but valuable employment opportunities for people who otherwise might not be able to get them. We cannot contemplate it ending.
Mr David Hamilton
I agree with my hon. Friend. Many people employed in the voluntary sector work across the city, but they do not have access to buses to enable them to do so, and therefore require vehicles. This issue has a direct effect on those workers, many of whom are part timers, and raises costs for them.
Sheila Gilmore
I wholly agree.
One of the fascinating things about this debate—I mentioned this in an intervention—is the rediscovery, it would appear throughout the House, of the fact that taxes on expenditure are indeed regressive. I would ask that this rediscovery be carried into the further debates that we will no doubt have on VAT, in the autumn statement and into the next Budget. We made the point over and over that the increase in VAT would particularly harm those on lower incomes. Some Government Members try to argue that it did not really do that, because richer people spend more and therefore pay more VAT. However, as a proportion of income and in terms of the effect on family income, it is indeed those who earn least who are affected. I am therefore pleased to see that we all apparently now agree on the regressive nature of such taxes.
Finally, we should not see this debate and our environmental ambitions as an “either/or”. We should not appear to be saying that we no longer want to make our country a greener place. We need to invest in green manufacturing industries, which will enable us to get out of this position. It is interesting that the motion refers to the tax take going down, which many people have simply put down to increased fuel costs. However, many other things could have reduced the tax take, such as fewer people working, fewer people paying tax and fewer people travelling, not just because of cost but because they do not have jobs to go to.
Again, this comes down to what we have said about the economy. If we let it run down and down, both demand and income to the Treasury will be reduced, and we will not cure the deficit, as is becoming increasingly obvious, as this Government are having to borrow more.
Nigel Mills (Amber Valley) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his tireless campaigning to secure this debate. I think it was back in February that I last spoke in a debate on fuel prices. Indeed, it should be a tradition that we debate fuel prices two or three weeks before every Budget or the autumn statement. The last debate was a great success, because shortly afterwards the Government scrapped the 5p rise and introduced a 1p cut. We hope that our new Minister will follow that trend and that the next 3p rise will be scrapped, with perhaps even a small cut made to encourage people.
The price of fuel is one of the topics we debate where so many of our constituents feel the pain personally, either as individuals or in the businesses they run.
Mr McCann
It is nice of the hon. Gentleman to give way, because he will remember that I followed him when he made his maiden speech in the House. Does he think that his constituents are feeling the pinch of the increase in fuel prices attributed to the VAT increase that his Conservative and Liberal Democrat coalition introduced?
Nigel Mills
I am tempted to say that I will give way again to the hon. Gentleman if he will tell us whether he voted against the VAT rise. We have heard a great deal of concern expressed today about the VAT rise, but it is surprising that those feelings are so strong, given that most Members did not vote against it. We have often said that we had to introduce that increase in part to fix the mess that Labour left for us. If the hon. Gentleman wants to take away that £12 billion or £13 billion of tax revenue, he will have to find a way of replacing it. I shall return to the question of fuel prices before I run out of time.
The point has been well made that this issue is all-pervasive, in that fuel costs affect everything that we buy. Today the headlines are telling us that inflation has fallen to 5%. Who on earth would have thought that we would be reading such headlines? The last thing that the Government want to do is put up fuel prices, which would affect everything that we buy, thereby pushing up inflation again.
Elizabeth Truss (South West Norfolk) (Con)
Does my hon. Friend agree that the situation is particularly difficult for people living in rural areas? One of my constituents who was unemployed has found a job further afield. He is earning £17,000, but he is spending £3,000 of that on petrol.
Nigel Mills
I absolutely agree with my hon. Friend. I have similar situations in parts of my constituency. Petrol prices are much higher there than they are in large cities. I have perhaps had a bit of luck recently in that Asda has opened a branch in the past year, which has pushed some petrol prices down a little—not that I like to pay tribute to supermarkets all that often.
Governments of both parties have spent nearly 20 years putting up petrol prices, and they have justified that in part by saying that it would encourage us to change our behaviour by buying smaller cars and driving less. Well, I think we have all got that message now. I have a smaller car that does many more miles to the gallon, as have most of my constituents, and many of the businesses that I talk to have reformed the way they transport their goods in order to reduce the number of lorry loads. The message is already out there, and we do not need any more nudging. We all understand it, and there is little more that we can do. For many people, their journeys are essential, and we risk pricing them off the road and out of economic activity completely.
The price of fuel is high. In fact, the underlying price—excluding the duty—has increased by about 20% over the past two years. There is no need for an inflationary rise in the duty to ensure that the price goes up in line with inflation, because the price has already risen by that amount. I cannot see any justification for a price rise on that basis. The only argument left for a further fuel duty increase is the fact that we need tax revenue, but this would be an especially bad way of generating that revenue, given the damage that it would do to our economy at this difficult time. I therefore urge the Government to scrap the rises that are planned for next year, and to try instead to find a way of reducing the duty in order to stimulate the economic activity that we need.
Toby Perkins (Chesterfield) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, but I would like to express my disappointment, and the disappointment of the many dozens of people in Chesterfield who have written to me about this matter, that the motion demands so very little of the Government. It calls on them to “consider the effect” of fuel duty increases, to “examine ways of working” with industry, to “take account” of market competitiveness and to “consider the feasibility” of a price stabilisation mechanism. That is hardly a manifesto for change. Is that what 110,000 people wrote to Members of Parliament about? We are asking so very little of the Government today. Jesus said:
“Blessed are the meek: for they shall inherit the earth”,
and the hon. Gentleman must be very blessed indeed. His request to the Government will greatly disappoint the many people who have written to me.
I recognise entirely that the cost of fuel is just one of many costs that are going through the roof, resulting in many people in our constituencies really struggling at the moment. The cost of energy is a significant one, and the cost of food is going through the roof. Inflation is going up, wages are stagnant and the people in our constituencies are struggling desperately. I welcome the fact that Conservative Back Benchers are finally showing an understanding of the principle of the Government forgoing revenue in order to deliver economic growth, reducing the deficit through the higher tax revenues that result from people having more money in their pockets. It was exactly that principle that persuaded me to vote in favour of shelving the increase, when Conservative Members were not doing so. Having arrived at that point, however, it is bizarre that Conservative Members should think that the issue is purely about fuel, and that all the other reasons why people have no money in their pockets and why consumer confidence is so low are not significant. They focus solely on fuel.
This issue is having a massive impact on businesses. The hon. Member for Harlow started by saying that some businesses do not pay VAT, so they are okay. However, small businesses pay VAT, as do public services, charities and ordinary people out there who are paying it the whole time. The significance of this should not be underestimated. Over the past 15 years or so we have seen a reduction in the amount of tax on fuel as a percentage of its cost. The peak period of the highest tax on fuel was back in the mid-90s. Since then, we have seen a reduction. Over the course of the last few years, we have seen a massive increase in the cost of petrol. The tax has been significant, but the big increases recently stem from the profiteering of the fuel companies—[Interruption.] Is that an attempt to intervene? I was not inviting one, but I am happy to oblige.
Andrew Percy
The point I have been trying to make is what the hon. Gentleman might think of his Government’s decision to escalate the escalator and push through 12 rises. It is a bit difficult being patronised by a party that did all that to fuel prices.
Toby Perkins
The escalator was the invention of the previous Conservative Government. The reality is that when the major fuel protests broke out in 2000-01, the amount of their income that people were spending on fuel was far less than it is today. All the revenue is coming in now, and Conservative Members say that the Government were generating too little money in years gone by. They stand before us today with all the benefit of the money that has gone in over the years, yet for all the talk we hear from people such as the hon. Member for Brigg and Goole (Andrew Percy), we have a motion before us that asks the Government to consider whether they can do something. If the massive increase in fuel duty over the years is so awful—I think it has gone up a lot—why do we not have a proposal that is a bit stronger? Why is the motion so feeble? [Interruption.]
We have also heard from Conservative Members—[Interruption.] If they want to intervene, they can do so, but I will not just be barracked. According to Conservative Members, there is a huge amount of support for the 1p reduction, which will save motorists £274 over the Parliament. At the same time, people are spending £300 or £400 extra in VAT, so this does not add up. We need a stronger motion, so that we can really help to put some money back into people’s pockets.
Mark Pawsey (Rugby) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on the assiduous campaign he has fought on this issue, which has generated massive interest across the Chamber in response to the great pressure on our constituents. I was pleased to add my name to the motion, as I recognise the impact of fuel prices on individuals, particularly those in rural communities such as the villages around my constituency, many of whom have to rely on their car and spend a substantial proportion of their income on fuel.
In common with my hon. Friend the Member for Congleton (Fiona Bruce), I want to concentrate my remarks on the impact on business—and particularly on small businesses—as a generator of growth in our economy, just as I did when we last debated the matter on 16 March. I will deal first with the issue raised by my hon. Friend the Member for Worcester (Mr Walker): the price gap in the UK between petrol and diesel, which is up to 8p a litre. The duty is, of course, the same; it is the higher cost of production that leads to a higher price. That is the reverse of the situation 10, 15 or 20 years ago. Frankly, as the gap widens, there is a disincentive for business to run more fuel-efficient vehicles powered by diesel. There is no reason for having the same rate of tax on fuel, and having a lower rate for diesel would greatly assist business.
The differential between the price of diesel in the UK in comparison with mainland Europe is also important, as my hon. Friend the Member for Nuneaton (Mr Jones) said. That presents a significant advantage to overseas competitors, particularly haulage businesses, many of which are based in my constituency in the middle of England. The Government are losing revenue as UK-based operators fill up their tanks on the continent, and there is evidence that they are specifying vehicles with larger fuel tanks for the purpose. The location and size of those tanks also raise safety issues, especially in view of the horrendous accident on the M5 only a few weeks ago.
In our last debate on this issue, I said that businesses needed certainty and stability in regard to the price of fuel. That is often their most important consideration as they negotiate the prices at which they sell to their customers. I used to run a business that used delivery vehicles to supply goods. We had 10 vans and 10 sales reps. The cost of fuel was a major budget consideration for that small business. Between January 2009 and January 2011, it increased by £1,000 a month before VAT—£12,000 a year. Most of those increased amounts cannot be recouped, because businesses are not able to raise their prices. Loss of profitability and the fear of generating loss have led to massive concern about the price of fuel.
Mr Marcus Jones
I am sure that my hon. Friend will acknowledge that the problem is even worse for small businesses that are not registered for VAT and therefore cannot reclaim it.
Mark Pawsey
I also note that, according to research conducted by the Federation of Small Businesses, one in 10 businesses says that if something is not done about fuel prices, it will need to lay off staff. A quarter say that a freeze on wages is attributable to the cost of fuel, 36% say that they will have to reduce investment in new products and services, and 78% say that their overall profitability will be in jeopardy. The situation would, of course, have been worse under Labour, which—as we have heard from Government Members on many occasions—introduced a fuel duty escalator involving seven increases. Had it not been for the action taken by the Government, fuel would now cost 6p more per litre.
I know from my career before I entered the House how important fuel prices are to the business sector. I hope that in his autumn statement the Chancellor will be able to give the necessary support to hard-pressed households and to businesses.
Nic Dakin (Scunthorpe) (Lab)
Let me begin by thanking the many constituents who have contacted me to express their concern about fuel prices. The debate has covered a wide range of issues. Having listened to all of it, I have concluded that there is a unanimous view throughout the House that higher fuel prices are hitting people hard at a time when household budgets are being squeezed as a result of rocketing energy prices and rising food prices. As was pointed out by the hon. Member for Harlow (Robert Halfon), whom I congratulate on securing the debate, mums, ordinary families and small businesses are being affected by the level of fuel prices. It is now clear that the Government’s decision to increase VAT to 20% in January, pushing up the price of petrol and the cost of living, was a serious mistake.
Jim Shannon
Does the hon. Gentleman agree that transport is the single biggest item of expenditure for most households, ranking above food, power and housing, at a time when the level of inflation is also increasing? Does he believe that a decrease of 1p, 2p, 3p or more on the forecourts would make a difference?
Nic Dakin
I think that a decrease on the forecourts would be very welcome to ordinary families and businesses.
The Tory tax of choice, VAT, is a regressive spending tax, and I welcome the recognition on the Government Benches that that regressiveness is damaging household incomes. New EU growth figures have been published today. They show that the UK’s economic growth is slower than that of all the other EU countries except Greece, Portugal and Cyprus. It is therefore essential that there is action now. We urgently need action to get the economy going again. That is why organisations such as the Federation of Small Businesses are supporting Labour’s five point plan for jobs, including cuts in VAT, tax breaks for small businesses that take on extra workers, and taxes on bankers’ bonuses to create 100,000 jobs for young people.
I want to focus on young people, as these fuel taxes are creating difficulties for them in getting to learn and getting to work.
Lisa Nandy (Wigan) (Lab)
My hon. Friend makes a powerful point. Does he agree that young people in rural areas, including in my constituency, often have to travel long distances to get to college or apprenticeships, and that they have been particularly hard hit by the abolition of the education maintenance allowance and other measures, which have squeezed their incomes disproportionately at the same time as fuel prices have risen?
Nic Dakin
My hon. Friend very clearly makes a point that I, too, was going to make. We fear that the number of young people who are unemployed will rise to over 1 million this week. If that happens, it will be desperate for the people of this country.
Fuel duties and fuel taxes are a barrier to young people getting to learn and getting to work. That is why, in this Chamber last week, the Youth Parliament identified transport as its major concern.
Finally, I wish to draw attention to the absurd increases in the Humber bridge tolls for local people, including those in my constituency. The tolls have risen from £2.70 to £3 for a single journey. They are therefore the highest tolls in the country. I am pleased that the Economic Secretary is present on the Treasury Bench, and I welcome the interest the Government are taking and the review of the Humber bridge tolls. Whatever happens to fuel taxes, I hope we will also look at the Humber bridge tolls, which are a tax on local businesses and local people. We must give them a better deal.
Owen Smith (Pontypridd) (Lab)
This has been a very important debate. It has also been timely, because VAT on fuel and high fuel prices are just two of the essential costs that are currently squeezing family living standards throughout Britain and strangling business confidence. It is also timely as today’s inflation figures reveal that inflation is still at 5%, which is more than double the Government’s now-forlorn target. This country has higher inflation than any country in the eurozone apart from Estonia.
The debate is timely, too, because, as my hon. Friend the Member for Scunthorpe (Nic Dakin) just said, the unemployment figures will be published tomorrow. We all hope that we will not see the dole queue growing on a Tory watch, as it so often has done in the past. Most importantly, it is a timely debate because the Chancellor has a brief window of time in which to change his mind and take action before he appears at the Dispatch Box in 14 days. He has a chance to do something, and the need to do something has been the theme of this debate.
Almost 20 Government Back Benchers representing constituencies across the country—from Wyre Forest, Argyll and Bute, Penrith and The Border, Cleethorpes, Burton, Congleton and High Peak among other places— have spoken in the debate. All of them pleaded with their Government to do something about high fuel prices in this country. I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate. He put the case most eloquently in an interview he gave on Radio 4 this morning, when he said that what he wanted from his Government were tax cuts for millions of hard-pressed people, not tax cuts for millionaires. We on the Opposition Benches entirely agree with that sentiment. The occupants of the “millionaires’ row” of the Government Front Bench may be less keen, however. [Interruption.] Yes, perhaps present company should be excepted, I confess. Normally, there are a few more millionaires on the front row. Tonight, they are a bit short. Perhaps they would like to come in.
Owen Smith
I am not going to give way on that point.
What all those Back Benchers have wanted is action. The crucial difference between what they have called for today and what has been called for by Opposition Members, including my hon. Friends the Members for Ynys Môn (Albert Owen), for Livingston (Graeme Morrice), for Dumfries and Galloway (Mr Brown) and for Stoke-on-Trent South (Robert Flello), the hon. Member for Dundee East (Stewart Hosie), my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), and my hon. Friends the Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and for West Lancashire (Rosie Cooper) and many others, is that we want something substantive done. For example, we want what we might have seen in the motion had it pursued the line of thought that the e-petition did. We want to see something tangible. What Opposition Members have called for is straightforward. We have said, “Cut VAT by 3p on a litre of petrol, reverse the tax increase that the Chancellor put on ordinary working people in the Budget and get the economy moving.”
Owen Smith
I will not give way because we do not have much time. [Hon. Members: “Go on.”] I will give way once.
Owen Smith
Interestingly, the Government tried to tell us that there was no prospect of our seeking a derogation in respect of VAT on petrol, but they are, in effect, seeking a derogation for their rural subsidy—or their rural special pilot. [Interruption.] We are not opposing it, but we are saying that they could go further than simply seeking a derogation for rural areas; they could cut 3p off VAT right across the country, not just on fuel, but on all things, and get the economy moving. That is what they could do. There is a reason for them to do it, and here they should have listened to the hon. Member for Romsey and Southampton North (Caroline Nokes). She gave a very interesting speech and it was interesting to hear a Conservative Member acknowledge, so many years after Conservatives have protested that it was not true, that VAT is a regressive tax. VAT hits the lowest-paid people the hardest, and VAT on fuel does exactly the same.
It is very instructive today that so many Conservative Members should have signed the motion, albeit this bowdlerised, Whip-friendly motion. It is evidence that Conservative Back Benchers, unlike those on their Front-Bench, are perhaps concerned about the living standards of ordinary people in this country. It is also evidence that they have spotted, at last, that they were sold a pig in a poke by their Chancellor at the Budget last year. What he said when he announced, with such great hubris, that he was putting fuel in the “tank” of the economy was that the Government were going to have a fair fuel stabiliser—this is the fair fuel stabiliser that he had been promising since 2008. Hon. Members may remember that this was a pledge to link the prices of unrefined petrol and refined petrol in order to smooth out volatility. Of course that is not what Conservative Back Benchers got at all. They have not got a mechanism that smoothes out volatility or that connects petrol prices to oil prices. They have not got what they all stood on as a manifesto pledge. This is yet another broken promise from this Government.
Owen Smith
I will not give way. What they have got instead is more smoke and mirrors from the Government. They have got what one commentator referred to as the Chancellor taking one policy and giving its name to another one. The casual observer would think that they had fulfilled their manifesto pledge, but in reality, of course, they have not done so.
Robert Halfon
I thank the hon. Gentleman for his kind remarks; I am glad to hear that he was listening to the “Today” programme. He talked about a vulgarised Whip motion, but that same motion was signed by 13 Labour MPs, including the hon. Member for Bolsover (Mr Skinner).
Owen Smith
I presume that the hon. Gentleman could confirm—I am not going to give way to him once more to give him a chance to do so—that he spoke to the Whips beforehand. I say that because the motion does not reflect what he wanted in his e-petition. What the motion rather coyly says is that the Government should
“consider the feasibility of a price stabilisation mechanism”,
thereby conceding that what the Chancellor said he was delivering is fiction. It is not a stabiliser; it is merely a gimmick, as we have come to expect from this Government. Why should anybody trust the Tories on fuel tax? Similarly, we should not trust them on VAT because they always say that they are not going to put VAT up and when they get in, they do.
At this point, I must give Government Members a bit of a history lesson, because we have heard such rot this afternoon about the Labour Government’s record on fuel tax. Between 1979 and 1997, during the last period of Tory government, the Tories increased fuel duty fivefold—not a five-point plan but a fivefold increase in fuel duty, which went up from 8p to 45p by the time they left office. During the ’90s, when they invented the fuel duty escalator, fuel duty increased from 59% to 75% of the price per litre. That is what we inherited when came to government. It was left to Labour effectively to stabilise prices by freezing successive—[Laughter.] Hon. Members may laugh but they really ought to read the facts before they come into the Chamber and speak. Let me quote from the House of Commons note that was prepared for this debate:
“Duty rates were cut or frozen for around six years from early 2000…By autumn 2008 duty was lower…in real terms”
than at any point since 1996.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Will the hon. Gentleman give way?
Owen Smith
In a moment. What is the reality of what the Government did—[Hon. Members: “Stop pointing!”] I think she is worth pointing at. What is the reality of what the Government did in the Budget? It merely takes us back to where we were in 2008. Far from it being a substantive change, this is once again smoke and mirrors from the Government. They say there is nothing they can do but there is a choice—there is always a choice in politics.
Miss Smith
Did the hon. Gentleman vote against the Finance Bill measures? Did he vote for the fuel duty cut that we proposed?
Owen Smith
We have heard that utterly specious remark all the way through. We voted against the entire Budget, which we feel is choking off growth in this country. There is a choice the Government could take—they could choose to act. They should act today and implement a plan—plan A or plan B, we do not mind what it is called. They should just do something.
The Economic Secretary to the Treasury (Miss Chloe Smith)
I very much welcome the opportunity to debate this motion and I shall happily correct a few points that the hon. Member for Pontypridd (Owen Smith) has just made. Most importantly, this is a chance to listen to and consider the contributions of hon. Members on both sides of the House. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate and moving the motion and I apologise to him for missing a few minutes of his speech initially. Let me take this chance also to congratulate the Backbench Business Committee and the 100,000 and more petitioners who have put this issue forward for debate today. Unlike many Opposition Members, I do not disparage the motion. I respect this as an avenue of democracy.
Even though average pump prices have fallen over the summer, there is little doubt that the cost of fuel remains a very difficult issue and a concern to many families and businesses across the country—and, indeed, to young people. The hon. Member for Wells (Tessa Munt) mentioned students and the Youth Parliament. Let me say for the record and for the hon. Members for Pontypridd and for East Lothian (Fiona O'Donnell), that both my primary and secondary schools were comprehensives. I fully respect the needs of all those across the whole of society.
Elizabeth Truss
Does the Minister agree that many people in rural Norfolk where she grew up will struggle to find an alternative to using their car, and that we need to reflect that in our policies?
Miss Smith
I welcome that point from my hon. Friend and near neighbour. I should like to reassure her constituents, as well as motorists up and down the land, whether they are in rural, suburban or urban areas, that this Government have listened to their concerns and will continue to do so. However, today is not the day to try to change taxes—that is for the Budget. Today is to listen.
From our first Budget last year—indeed, from when we were in Opposition, when we said, as the hon. Member for Pontypridd has pointed out, that we would introduce a fair fuel stabiliser—this coalition Government have listened and acted. In the Budget in March, we announced a £2 billion package to support motorists at a time of record pump prices. However, the Labour party, including the hon. Gentleman, whom I do not believe was there at 4 am when many of the rest of us were, failed to support that package, which was supported by the Federation of Small Businesses on behalf of, for example, van drivers.
Before I come to specific points raised in the motion, I will explain why the Government took the action that they did in the Budget.
Owen Smith
Does the hon. Lady agree that the price stabiliser is not what it was described as being by the Chancellor and the Prime Minister when they were in opposition? It does not link pump prices to oil prices.
Miss Smith
It is the Labour party that wants a price stabiliser, and I shall come to that. Our fair fuel stabiliser aims to do other things, and I shall deal with that in due course.
Motoring is an essential part of everyday life for many households and businesses, and the cost of fuel affects us all. The Government recognise that the price of petrol is a significant part of day-to-day spending. We know that high oil prices are causing real difficulties with regard to the affordability of motoring. It is important that a responsible Government listen, consider and act.
It was the previous Government who, in the 2009 Budget, introduced a fuel duty escalator. That involved planning for seven fuel duty increases after the 12 that they had already made. None of those planned increases was subject to either oil price or pump price movements. Despite what Labour Members may claim now, and the synthetic anger referred to earlier in the debate, the previous Government had no plans whatever to support motorists. The right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) said, “We are where we are.” It is regrettable that the previous Government did not act to prevent us from being where we are. From the very beginning of this coalition Government, we have looked at how we could ease the burden on motorists. We acted with a £2 billion plan to ease that burden.
Miss Smith
I am terribly sorry, but I am very short of time. I need to explain how we acted. We acted by cutting fuel duty by 1p per litre from 6pm on Budget day.
Miss Smith
Time is short; hon. Members will appreciate that I need to press on. We acted by cancelling the previous Government’s fuel duty escalator for the rest of the Parliament. We acted by introducing a fair fuel stabiliser that will better share the burden of high oil prices between motorists and oil companies, and we acted by ensuring that there are no fuel duty increases at all this year.
Miss Smith
No. I am sorry, but there is not time.
I need to explain to the hon. Lady that we deferred the inflation-only increase that was planned for April 2011 to January 2012, and deferred the 2012-13 increase to 1 August 2012.
Miss Smith
No, I will not. I need to press on.
There have been calls for the Government not to go ahead with those two duty increases. I can understand that, and my right hon. Friend the Chancellor understands that, but let us not forget that those increases remained in the Budget so that we can deal with the record deficit that we inherited. This is a time of international instability, and the difficult decisions that the Government have taken to tackle the deficit have made Britain safer for householders. Our reduction plan has led to low interest rates, which help householders through their mortgages.
Miss Smith
The hon. Lady will appreciate that I need to leave time for Back Benchers to respond to the debate. In addition to the cut in fuel duty, which hon. Members have, of course, welcomed today, the Budget announced further support that will benefit motorists. Our fuel duty cut came on top of the freeze in vehicle excise duty for hauliers that hon. Members mentioned.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The Minister has made it absolutely clear that she is not giving way for the duration of her speech.
Miss Smith
Thank you, Mr Deputy Speaker.
I need to explain that our fuel duty cut was on top of an increase in approved mileage allowance payments; that helps employees and volunteers who use their own cars. I think that, in the light of their speeches this afternoon, my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes), and for High Peak (Andrew Bingham), will welcome that. That is all on top of the increase in the personal allowance, cuts in corporation tax, above-inflation increases in child tax credits, and the triple guarantee for pensioners. That is real help for motorists, businesses and families, as my hon. Friend the Member for Truro and Falmouth (Sarah Newton) said.
Let us not forget that although the Opposition have talked so much today about helping motorists, they could not even bring themselves to offer their support for the fuel duty cut, or the increase in the supplementary charge on oil and gas companies to fund it, in the Finance Bill debates.
Miss Smith
No; I am terribly sorry. Today, average pump prices are approximately 6p per litre lower than they would have been if we had continued with the previous Government’s planned escalator, which the Opposition are so keen to airbrush out of history. That means that a typical Ford Focus driver would have been £56 better off in 2011-12, and an average haulier £1,700 in 2011-12. [Interruption.] Opposition Members are chuntering and trying to suggest that motorists would be better off under their plans for an escalator and a VAT rate of 17.5%. We know that the right hon. Member for Edinburgh South West (Mr Darling) was planning to increase VAT.
The Opposition cannot say where £12 billion of extra expenditure would come from, and it is simply not true that motorists would at present be better off under the previous Government’s plans. When comparing the changes that we announced in the Budget with the previous Government’s fuel duty and VAT plans, pump prices are approximately 3p a litre lower. By the end of the Parliament, average pump prices will be 3.5p a litre lower. Cutting fuel duty and scrapping their escalator will more than offset the impact of the increase in VAT.
I shall quickly address the issue of whether oil price falls this summer have been passed on at the pump, which is a matter of concern to hon. Members who have participated in the debate and to many of our constituents. For motorists to realise the benefits, as we all wish them to do, retailers need to pass those on at the forecourt. Individual pricing decisions are for retailers—we have heard about competition from my hon. Friend the Member for Worcester (Mr Walker) and others—and the Office for Fair Trading is not aware of any evidence that would allow it to launch an investigation.
The Chancellor has made it clear that although the Government can control the duty rate it cannot control the world oil price. After such a good debate, I hope that I speak for Members from all parts of the House in saying that we all want motorists to benefit as much as possible from falls in oil prices. A number of complexities mean that pricing is not the same at every petrol station in every part of the country, but overall prices today are lower than they were at the beginning of the summer, just as they were lower at 6 pm on Budget day after we cut prices by 1p. They are 6p a litre lower because of the actions taken by this Government.
Furthermore, I regret to say that the motion is wrong about fuel duty receipts, which have not fallen by £1 billion since 2008. Official receipt data show that receipts have increased in recent years. Let me deal briefly with the fair fuel stabiliser. The support we are providing to the motorist needs to be paid for. My hon. Friend the Member for Beverley and Holderness (Mr Stuart) referred to sound Conservative principles, and this is one of which I am proud—things must be paid for—and it is fair that companies make a higher contribution. Only in that way can we support the motorist in a way that is fair, affordable and transparent. Updates on the introduction of a rural fuel duty rebate will be available to hon. Members who are interested in that, and we must do what we need to do in a sustainable manner.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is an honour to wind up the debate, which has been far ranging and widespread, both geographically and in content. Luckily, it was a virtual tour of our constituencies—had it been a driving tour, it would have cost a veritable fortune.
The debate has taken place after much pressure from outside, and I pay tribute to the hon. Member for Harlow (Robert Halfon) who, since coming to the House, has been a great champion of this issue. In fact, in the previous Parliament, he might well have spoken for the Scottish National party and Plaid Cymru. I hope that I am not damaging his career too much by giving the praise that only an SNP Member could give to boost it in that way.
The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and my hon. Friend the Member for Dundee East (Stewart Hosie) have pointed out that the House has been rotating around us nationalists. The hon. Member for Foyle (Mark Durkan) pointed out in an intervention that the SNP has been constant on the issue, and whoever has been in government and opposition have played their points as such. The price of diesel, at £7 a gallon in my constituency, is damaging to families and, in particular, to businesses.
Mr MacNeil
I cannot give way.
Many hon. Members, including the hon. Members for Worcester (Mr Walker) and for Beverley and Holderness (Mr Stuart), pointed out that tax was up, but revenue was down. As the hon. Member for Camborne and Redruth (George Eustice) said, it is a regressive tax, which is something that we should change. Three years ago, Iceland had a huge crash, but today it has lower unemployment and a greater growth rate. Interestingly, the cost of its fuel is about two thirds the cost in the UK. The UK has the highest petrol taxes in Europe, with Greece in second place. The message is surely going out to the Treasury and the Chancellor: no tax rises in January.
Question put and agreed to.
Resolved,
That this House welcomes the 1p cut in fuel duty at the 2011 Budget, the abolition of the fuel tax escalator, the establishment of a fair fuel stabiliser and the Government’s acknowledgement that high petrol and diesel prices are a serious problem; notes that in the context of the Government’s efforts to tackle the deficit and 5 put the public finances on a sustainable path, ensuring stable tax revenues is vital for sustainable growth; however, believes that high fuel prices are causing immense difficulties for small and medium-sized enterprises vital to economic recovery; further notes reports that some low-paid workers are paying a tenth of their income just to fill up the family car and that high fuel prices are particularly damaging for the road freight industry; considers that high rates of fuel duty may have led to lower tax revenues in recent years, after reports from leading motoring organisations suggested that fuel duty revenues were at least £1 billion lower in the first six months of 2011 compared with 2008; and calls on the Government to consider the effect that increased taxes on fuel will have on the economy, examine ways of working with industry to ensure that falls in oil prices are passed on to consumers, to take account of market competitiveness, and to consider the feasibility of a price stabilisation mechanism that would work alongside the fair fuel stabiliser to address fluctuations in the pump price.
Mr Deputy Speaker (Mr Nigel Evans)
Several hon. Members were not called in this evening’s debate because it was very popular and there were time constraints. That will be noted for further debates.
Independent Police Complaints Commission
(12 years, 11 months ago)
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Mr David Lammy (Tottenham) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to debate the Independent Police Complaints Commission, an organisation that has taken on increasing importance in recent months. It is right in such a debate to begin by thanking all local officers in Tottenham for the work that they do day in, day out. The vast majority of them serve us very well indeed. Some of those brave men and women serve their own community, and it is clear that they put others ahead of their own needs. All of them put their lives on the line to keep Tottenham safe, and I thank them for that.
However, for all the bravery of those officers, things very occasionally go wrong, and when they do individual officers must be held to account for their decisions and actions. There is no way of escaping Tottenham’s recent history: there is a history of people in Tottenham dying during or following police contact. I wish to God that this were not true, but anyone who has lived in Tottenham knows just how those deaths have strained the relationship between some of our residents and the police. With the death of Cynthia Jarrett in 1985, Roger Sylvester in 1999, and Mark Duggan this August, Tottenham’s history has been punctuated and measured by these tragic events.
Of course, deaths in police custody or following police contact are not only a Tottenham issue, as, for example, the unexplained death of Christopher Alder in Hull more than a decade ago shows us, and they are not just an issue for the black community. Recent years have seen the deaths of Ian Tomlinson and Jean Charles de Menezes due to police actions. But in Tottenham we do seem to bear our share of these tragic events.
It takes years—decades—of effort to build community relations and to foster a two-way sense of trust between residents and the people who should be their police. Despite a lot of good work, it is the list of deaths that everyone remembers. It is not just the fact that a person has died following contact with the police that is important; how the death is investigated and who carries out the investigation are just as important. That is what I want to discuss this evening.
Before describing how I think the IPCC can be improved, it is important to recognise that the journey to the creation of an independent complaints authority has not been short or without controversy and resistance, because we have come a long way indeed. In 1985 Lord Scarman produced his groundbreaking report on the Brixton riots four years previously. He was deeply concerned about the total breakdown of trust between the police and some of the communities they were supposed to serve. His report called for an independent body to be set up to investigate police complaints as a means of restoring trust.
Unforgivably, it would be another 19 years before the IPCC opened for business. Instead of the Government agreeing to what was so obviously needed, deckchairs were duly rearranged and the old Police Complaints Authority was set up to replace the Police Complaints Board, but it proved just as hapless. Changing a word in the title proved easier than changing the way of working, because in those days it did not matter whether it was the Police Complaints Authority or the Police Complaints Board that conducted the investigation. They were not investigations for the victim, their family or the concerned community; they were investigations by the police and for the police.
The opening of the Stephen Lawrence murder trial yesterday again brings the failures of the Police Complaints Authority into sharp public view. The Macpherson report on Stephen’s death highlighted these failures perfectly. It noted that the authority’s report on the Metropolitan police’s handling of the death was known as the Kent report, principally because the Kent police handled the inquiry into the Metropolitan police. The Kent report began making excuses for the Metropolitan police in its preface:
“The depth of detailed scrutiny applied in the complaints investigation could have found fault in most police criminal investigations. The reader of this report should bear in mind that the benefit of hindsight and the luxury of having time to assess all of the information that was available to the MPS is bound to reveal errors, omissions and flawed judgement.”
The Macpherson report highlighted the shocking extent to which the Police Complaints Authority examined whether racism impacted on the Met’s investigation, stating:
‘Many officers were asked directly whether racism had an impact upon their activities in the case. Predictably they replied in strong terms denying such impact. The result was the finding by Kent that: “Kent Police have found no evidence to support the allegation of racist conduct by any MPS officer involved in the investigation of the murder of Stephen Lawrence.”’
Scarman’s warning in 1985 about the lack of independent oversight of the police had become, 12 years later, the whitewash of the Kent police’s so-called investigation of racism in the Met. Like the Scarman report, the Macpherson report called for an independent body to investigate police complaints.
Thankfully, one Home Affairs Committee report later, the Government listened that time and the IPCC was set up in 2004. Make no mistake: the IPCC is certainly an improvement on what went before, as the police are not investigating themselves. We are pleased about that, but not very pleased, and certainly not content. The death of Mark Duggan tells us why we should not be content with what we have, because it is not yet good enough.
Keith Vaz (Leicester East) (Lab)
I congratulate my right hon. Friend on securing this important and timely debate. Does he share my concern, and that of members of the Home Affairs Committee, that several months after the current chair of the IPPC announced that he was leaving, there is still no replacement? We now understand that the job is to be advertised again. Does he agree that there needs to be a permanent chair to provide that organisation with good leadership?
Mr Lammy
I totally agree with my right hon. Friend. I was surprised when I found out that that important role in our country had been vacant for so long. I hope that when he comes to the Dispatch Box to reply to the debate, the Minister will explain that.
The IPCC has two roles, police scrutiny and public guardianship. It is charged with investigating complaints independently, and with the fullest scrutiny, but its role does not stop there. Given that it investigates on behalf of all of us, it must communicate and work with the public.
In the case of the death of Mark Duggan, it remains to be seen whether the IPCC fulfilled its primary duty to scrutinise the actions of the police on 4 August, but it is vital that the commission does all within its power to convince the Duggan family and the wider Tottenham community that its investigation is thorough, impartial and independent. Without that, we will be back to the bad old days of the Kent report and the police investigating police, and I hope that the IPCC do not take us there.
We wait to see whether the IPCC will fulfil its primary duty, but even in the days immediately after Mark Duggan’s death it was clear that it had failed completely and utterly in its secondary duty—that of guardianship. Mark Duggan’s family were forced to learn of the death of their son and father from watching television. That is beyond unacceptable. Why did nobody from the IPCC contact the family on the day of his death, when it had opened its investigation? Despite warnings from people throughout the community, the IPCC failed to communicate with the family until two days after the shooting, and even then it was unable to communicate anything of substance to them. That is not good enough.
Despite employing 15 media officers, the IPCC failed to make an appearance in the media to reassure a sceptical public—certainly in my community—that it would investigate Mark Duggan’s death thoroughly, impartially and independently. Its inability to fulfil that responsibility is difficult to explain. There was no direct communication by the IPCC to the affected communities in Tottenham in the hours and days after Mark Duggan’s death. Would it have been too difficult to hand-deliver a letter to residents of the affected areas, reassuring them of the investigation, explaining the known facts and appealing for calm and co-operation? No, it would not—but yet again, that did not happen.
In the absence of any word from the IPPC, a dangerous vacuum was allowed to open up, and rumours were allowed to take hold in the place of hard facts. That is not good enough. When the supposed facts were released to the media, they were quickly retracted. It was put out that there had been an exchange of fire in the incident that led to Mark Duggan’s death, but that turned out not to be true. Why did that happen? Again, that is far from what we would expect of an organisation with the role of public guardianship.
To this day, communication between the IPCC and Tottenham residents, as well as with the wider black community, appears sparse at best and unthinking at worst. That has to change. The magnitude of the IPCC’s task is immense, and some of the signs leave little hope in the strained community that I represent. Two thirds of people have heard of the IPCC, a number that has barely budged since the body was founded seven years ago, but one third of those think that it is part of the police—again, a figure that has barely budged. Ethnic minorities are even less likely to have heard of the IPCC, and they are more likely to believe that it is part of the police. That is the scale of the challenge awaiting us.
Jim Shannon (Strangford) (DUP)
Is the right hon. Gentleman aware of any police investigations in other regions of the United Kingdom, such as Northern Ireland, Scotland or Wales, that could be a catalyst for, and an example of, an improvement on what he has described?
Mr Lammy
I am grateful for any suggestions, and I suspect that the Government will be, too. I know that communities beyond the black community have had concerns about how the police investigate the police, and I am sure that in Northern Ireland there are lessons that need to be carefully reflected on, developed and learned.
The IPCC has to do more to convince a sceptical public that it is truly independent and has learned the lessons of Scarman and Macpherson. I hope that the Duggan inquiry will go some way towards doing that, but the IPCC, given the way in which it handled those initial days, has made things hard and has not lived up to those expectations. What assurances can the Minister give the people of Tottenham that the Duggan inquiry will be thorough and independent? A good start would be to address the shocking statistic that 30% of IPCC investigators are former police officers, and far fewer are from an ethnic minority background. Investigators such as police officers must look like the communities they are working in, and the IPCC must never allow itself to appear simply as a replica of the old Police Complaints Authority. What assurances can the Minister give that those figures will change?
The IPCC can work only under its current powers, and it is time for those powers to change. At the moment the IPCC cannot compel a police officer to speak to it unless that officer is a named suspect in a criminal investigation. The IPCC needs the power to speak to everyone, including the police, right up to the top. Will the Minister assure me that the IPCC will be given the powers to compel police officers to co-operate with its inquiries?
At the moment the IPCC does not have the power to suspend a police officer pending an investigation. The officer involved in the Mark Duggan case has not been suspended and is still working. The Minister will understand that members of the community that I represent find that quite incredible. Will he assure me that the IPCC will be given the power to suspend police officers who have been involved in a death due to police contact?
At the moment the IPCC does not have the power to initiate its own prosecutions following an investigation. In the Roger Sylvester case, as in others, power is often handed to the Crown Prosecution Service, which then does not prosecute. There is an inquest that brings in an unlawful killing verdict, and the families feel very let down indeed. The initial inquiry should have that prosecution power in the first place. Will the Minister explain why the IPCC finds itself caught between the coroner, the CPS and the police in relation to its powers, and say whether he will review what powers are needed following the concerns that have been raised not only in the cases I have mentioned, but in successive cases over many years?
At the moment, the IPCC does not own the scene of an investigation until some time after an incident has taken place. The scene of the Duggan death was not owned by the IPCC until hours after the shooting. That has to change. Will the Minister assure me that the IPCC will own the crime scene right from the beginning in recognition that there can be tremendous concern and anxiety about the fact that the initial officers caught in the incident can effectively own the scene for hours before any degree of independence takes over? The IPCC budget is tiny. It is £35 million a year, which is less than that of every single force in the country.
John McDonnell (Hayes and Harlington) (Lab)
I want to mention something I have learned from recent meetings with the IPCC. Is my right hon. Friend aware that a very limited and relatively small number of cases are managed cases, so the vast bulk of work that the IPCC is dependent on is dealt with by the police themselves?
Mr Lammy
With that budget, one can understand that the IPCC simply cannot get through the level of complaints that are being made. In fact, a sub-set of complaints is in effect being handled by the police. Again, we will need reassurances about whether the budget is appropriate for the sort of organisation that has to be armed to do this job independently and effectively. This is why there is a trust deficit in what the organisation does, and I hope that the Minister will respond to it.
The Minister will, of course, need to start by reviewing the many deaths that take place following police actions. Since 1999, according to the Library, 322 people have died in or following police custody, yet not one police officer has been jailed for any of those incidents. These are shocking figures. I ask the Minister to reflect on the sheer extent of those figures, whether he is content, and whether there should not be some independent review into that aspect of its work.
I hope that the Minister will commit to an inquiry into the disgraceful revelations regarding the handing over of the wrong body to the family of Christopher Alder, who died in police custody in April 1998. Mr Alder was a paratrooper who fought for his country, yet he was left to choke to death, handcuffed on the floor of a police station in Hull. The fact that his family found out just two weeks ago that the body they buried was not in fact his, and that he is in a mortuary over a decade later, is a disgrace and of tremendous concern in a civilised country. I hope that the Minister will undertake an inquiry and get involved. I am pleased to see my right hon. Friend the Member for Leicester East (Keith Vaz), the Chairman of the Home Affairs Committee, in his seat; I am sure that he is as concerned as I am.
We need a review of deaths in police custody. We need a review of the IPCC’s powers and resources, and we need to understand that it is truly independent. My community waits to see its conclusions in relation to the death of Mark Duggan, and I hope that the Minister can reassure them.
The Minister for Policing and Criminal Justice (Nick Herbert)
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this debate. I appreciate his long-standing interest in this topic and his immediate concerns about the ongoing investigation by the Independent Police Complaints Commission into the events surrounding the shooting of Mark Duggan in his constituency on 4 August. The whole House will recognise the passion with which he speaks on these issues and, I believe, will share his overriding concern, which is to secure community confidence in policing. That confidence is essential to ensure policing by consent, which we so prize in this country.
I join the right hon. Gentleman in praising the police for the work that they do, including that to secure order on our streets in the summer. That work is often difficult and dangerous. It is nevertheless imperative that when there are instances where police action goes wrong and there is culpability, there must be a robust system to ensure that that confidence in policing is maintained. That is as much in the interests of the police themselves as of those of us who guard the public interest to ensure that it happens.
I should like to address two key issues that the right hon. Gentleman raised. First, I will set out the background to the IPCC, including how it is set up and the way it operates, and deal with some of the issues relating to budgets and staffing. Secondly, I want to turn to the future and set out the issues confronting the IPCC in the context of the Government’s overall programme for reform of the system to ensure that we can maintain confidence in the police complaints system and that it plays a key role in the new policing landscape.
The police are a monopoly public service and their officers exercise coercive powers over citizens. They are expected to, and must, uphold the highest standards of behaviour and provide a policing service that enjoys the confidence of the public. The police complaints system is an important safeguard in holding the police to account. The complaints system should focus on allowing people who are dissatisfied with the provision of a policing service to make a complaint, and that complaint to be responded to appropriately.
There needs to be public confidence in the integrity and independence of the complaints system. It was the importance of that independence that gave rise, for the reasons the right hon. Gentleman described, to the establishment of the IPCC, in preference to the bodies that preceded it, in 2004 under the Police Reform Act 2002. It is worth reiterating that the IPCC is independent by law and makes its decisions independently of the police, Government, complainants and interest groups. This means that all complaints must be dealt with in accordance with legislation and the guidance issued by the IPCC and agreed by the Home Secretary. All complainants who have their complaints dealt with by the police in the first instance have a right of appeal to the IPCC. It independently investigates the most serious incidents and complaints. It regularly reports publicly on the outcome of investigations and it makes local and national recommendations as appropriate to ensure that the same things do not go wrong again. Its reports have to stand up to the scrutiny of inquests and courts.
The Government no more direct the IPCC than we direct police forces. It is essential that it remain an independent body.
Nick Herbert
I will come on to that issue.
I would first like to respond to the concerns of the right hon. Member for Tottenham about the proportion of IPCC investigators who come from a police background. He said that about 30% of investigators and about 10% of the IPCC’s staff overall come from a police background. Let us put it the other way around: the vast majority of investigators—70% of them—do not come from a police background. The contribution of those from a law enforcement background is vital in ensuring that the IPCC conducts competent and robust investigations. The idea that the IPCC is an organisation that consists of police officers investigating other police officers is a grotesque caricature, because of its make-up, the way it operates, and the way Parliament established it.
The right hon. Gentleman also raised the issue of the IPCC’s budget. Its budget is some £35 million a year and it employs approximately 400 staff. That does not make it a small organisation by any standards. Shortly before I was elected to the House in March 2005, the IPCC had a total of 72 investigators, deputy senior investigators and senior investigators. In March this year, it had 121 such investigators. Its role has broadened in some respects, but it is not an organisation that has been starved of public funds. Of course the IPCC needs to manage with a diminishing budget during the current period, because all policing organisations have to make savings. Nevertheless, in 2010-11 it started 164 investigations and completed 154, which is more than 50% more than in the previous year. I therefore do not believe that allegations about resourcing can be made about this organisation.
John McDonnell
What proportion of complaints lead to managed investigations that are investigated directly by the IPCC?
Nick Herbert
I do not have that figure to hand, but I am happy to let the hon. Gentleman have it after the debate. Of course, we have a structured system that ensures that the commission has the overall supervision of complaints, which I will come to, and that it deals directly with the most serious complaints. That is as it should be.
The IPCC will not become complacent, nor will this Government let it. Having made those points to the right hon. Member for Tottenham, I do not want him to think that I am dismissing what he has said. I hope he knows that I am not.
Following four years’ operational experience, the IPCC conducted a review of the police complaints system, the aims of which were to check how well the system was delivering against the original aspirations and to ensure that it continued to improve. The review found that some of the statutory provisions for the handling of complaints were unnecessarily bureaucratic or no longer necessary. Through the Police Reform and Social Responsibility Act 2011, which we have just passed, the Government are introducing reforms that will put an emphasis on police accountability and make the police complaints system more effective and efficient. That will mean giving police forces additional discretion to deal with low-level complaints, which will free up the IPCC to deal with the most serious and high-profile complaints. It is important to distinguish between matters of public concern about performance issues, in which case what often matters is that there is strong police accountability and responsiveness, and those on which there are serious complaints about a breakdown that needs investigating by the commission.
We are giving the IPCC new powers to recommend and direct that unsatisfactory performance proceedings be brought against an officer when a complaint reveals that their performance is unsatisfactory. We are also giving the commission more flexibility in how it carries out its administrative functions, so that it has the freedom to direct more resources to carrying out its investigations. Those changes and others will improve the handling of police complaints by removing bureaucratic processes from the system, but it is important to realise that we are not stopping there.
In July, on the back of the revelations about phone hacking, we announced to Parliament that we would give further consideration to whether the IPCC needed additional powers, including the power to question civilian witnesses during the course of its investigations, and whether it should be given greater powers to investigate institutional failings in police forces. As the right hon. Gentleman mentioned, the IPCC is also in the early stages of a review of its powers, resources and approach in relation to investigations arising from deaths following police contact. That is obviously a very serious issue, and I know the IPCC has been in touch with him, and will keep in touch, about that piece of work. I will take the closest interest in it as well. In addition, we are setting up police and crime commissioners, to be elected a year from today, to hold the police to account.
I also want to respond to the points made about the IPPC’s chairmanship. I am aware of concerns that we do not have a permanent chairman at the moment. We are taking particular care over the position, precisely because it is crucial to ensure the success of the IPCC. A new chair should be in place early in the new year, but until then Len Jackson, a highly effective individual in whom the Government have complete confidence, has agreed to remain interim chair. We are determined to secure the right appointment to the organisation, because we invest considerable importance in its independence and integrity. It has new challenges to meet and old challenges that still have to be met. I accept the right hon. Gentleman’s concern about it, and I want to assure him and the Chair of the Home Affairs Committee that the Government will continue to ensure that the IPCC does the job that it was set up to do—
Westminster Hall
(12 years, 11 months ago)
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Eurozone Crisis
(12 years, 11 months ago)
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Mr John Baron (Basildon and Billericay) (Con)
Good morning to you, Mr Caton. In raising concerns about the UK’s liability to the eurozone bail-out via its contributions to the International Monetary Fund, I will ask various questions of the Minister. I will question the assumption that we always get our money back, whether the IMF’s policy will work and why the IMF should be getting involved at all.
That we are talking about large sums of money cannot be denied. Our liability through the European financial stabilisation mechanism totals some £6.5 billion. Our liability through the bilateral loan to Ireland exceeds £3 billion. Despite Government assurances to the contrary, it does not stop there. Our IMF liability to the Greek, Portuguese and Irish bail-out packages announced before May 2011 totals some £3.5 billion, and that does not include the latest Greek bail-out. Adding in our additional contributions, which are almost doubling—from some £10 billion to nearly £20 billion—it is obvious to all that we are soon talking some big figures. I do not think the Minister can deny—I shall welcome his intervention if he thinks otherwise—that some of the additional IMF money will be routed through to the eurozone crisis. Therefore, the Government’s claim that our liability stops with the EFSM and our bilateral loan to Ireland simply does not wash.
Let me be clear: I support the IMF’s work. IMF programmes can and do work under certain conditions. However, there are real risks to those IMF contributions routed through to the eurozone crisis.
The Government take great comfort from the fact that no country that has lent money to the IMF has ever lost that money. However, this recession is very different. Having been a fund manager in the City of London, running pension funds, charity money and funds for private clients, I know that it is always dangerous to say, “This time it is different,” but economic history makes that clear. Recessions since the great depression have always been de-stocking events, where the problem has been a fall in demand. In response to that, the Keynesian approach of stimulating the economy through additional demand—if necessary, by borrowing—has by and large done the trick. This recession, however, is a deleveraging recession, which has been built on excessive debt. Governments and consumers have taken on too much debt. Demand is not the issue; excessive debt is. The only remedies for this recession are to pare down the debt and attain greater growth through increased competitiveness.
I worry that the Government are underestimating the scale of the debt. There is £300 billion-worth of Italian debt to be rolled over in the coming 12 to 18 months. The eurozone went to the Chinese, who have massive reserves, but the Chinese did not want to know. The fact that the IMF wants an additional £10 billion from us clearly suggests that it does not have our original £10 billion. The Government would be foolish to ignore the omens. Does the Minister accept that there is at least some risk that the UK could lose some of the money routed through the IMF to the eurozone crisis? Again, he is welcome to intervene if he so wishes.
Mark Reckless (Rochester and Strood) (Con)
My hon. Friend refers to £10 billion and another £10 billion. I understand that when the issue was discussed in the Joint Committee on Statutory Instruments, the Minister said that, broadly speaking, our liability to the IMF would be £20 billion. However, I understand that another funding source exists that may mean that our liability is already £40 billion. Can my hon. Friend enlighten us?
Mr Baron
My hon. Friend is right to raise that issue. There is an additional liability that we know relatively little about, because the Government have not come to the House to explain it. I hope the Minister will take the opportunity in this debate to address that concern. Is that true? What is the extent of the liability? How would it be called upon in the event of certain contingencies?
Mark Field (Cities of London and Westminster) (Con)
My hon. Friend referred to the idea that we have never—hitherto, at least—lost money to the IMF. Does he recognise that there is potentially a huge opportunity cost in lending money, often at low interest rates, to the IMF? As he will know, Parliament was told at the time that the bilateral deal struck with Ireland had tremendously advantageous interest rates. There has been a haircut on that interest rate across Europe, which could well happen to any future IMF contributions that we make.
Mr Baron
My hon. Friend is absolutely right. There is a real danger that we underestimate the extent of the debt and the defaults that could happen. One is not joining the bandwagon of warning signals. The debt that has to be rolled over is quite clear for all to see, but I do not think the Government are acknowledging that. Simply to fall complacently back on the fact that no money ever loaned to the IMF has been lost is to miss the point completely.
Ian Paisley (North Antrim) (DUP)
I congratulate the hon. Gentleman on securing the debate. He mentioned a number of times the bilateral loan, which is of significant interest to my colleagues and me. He may be interested to know that last December, I wrote to the Chancellor to suggest that Her Majesty’s Government should hold the deeds of all properties in the United Kingdom that are in the possession of the National Asset Management Agency, the Irish state bank, so that it cannot disproportionately influence our market by the unilateral sale of those properties. Does the hon. Gentleman agree that that is one way of protecting ourselves and our own local market against NAMA?
Mr Baron
That is certainly one option that should be explored more thoroughly. I referred to the Irish loans because the Government line to date has been that our liability to the eurozone crisis stops at the bilateral loan to Ireland and at our existing £6.5 billion contingency liabilities to the EFSM. That is simply untrue, given the additional contributions through the IMF.
Will additional IMF funding work? That will simply reinforce existing eurozone policy, which is itself fundamentally flawed. The existing policy simply does not address the core causes of the crisis, which are a lack of competitiveness and Governments spending too much. Debt is the problem, as I have said, not demand. We have had 14 or perhaps even 15 gatherings, conferences and summits to save the euro, but each has failed to address the core reason for the problem, which is a fundamental lack of competitiveness. Where are the swathes of cuts to regulation? Where is the introduction of measures to improve competitiveness? They simply have not been there. All that has happened, and all the concern there has been, is to put together more debt to solve an existing debt crisis.
Mr Douglas Carswell (Clacton) (Con)
The Government say that no one has ever lost money by lending to the IMF. Can my hon. Friend tell me whether the IMF previously lent money to make a debt crisis worse, as it is now doing? Previous IMF bail-outs involved a debt default or restructuring and devaluation, not more bail-outs and borrowing. Surely, putting the IMF in charge in that way is making things worse. Putting Christine Lagarde at the helm is a bit like putting a debtor in charge of a bank.
Mr Baron
My hon. Friend nearly stole one of the lines I was about to come out with. Fundamentally, I agree with him. The problem is caused by excessive debt: that is what makes this recession different from previous ones, yet the solution the eurozone leaders have come up with is to pile on more debt. That is not the solution. All it is doing is reinforcing failure and failed policies.
There are further reasons why this policy will not work. I cannot think of a monetary union in the economic history of this planet that has succeeded without fiscal union also being in place. Again, I call on the Minister to intervene if he can correct me. To pursue monetary union without fiscal union is a doomed policy. Can the Minister come up with one example of successful monetary union in a country where fiscal union has not also been present? As I say, I would welcome his intervention, but I doubt that he will have such an example.
As my hon. Friend the Member for Clacton (Mr Carswell) has suggested, another reason why this policy will fail is that it fundamentally ignores the importance of devaluation to recovering economies. Usually, there are three elements in an IMF package: reduced spending, increased revenue and the ability to allow the currency to devalue. That last bit is important because a currency that devalues helps to take the strain off the economy. If an economy is deemed to be, say, 25% uncompetitive compared with its neighbours, allowing its currency to depreciate to about the same extent will go a long way towards taking the strain. If we cut off that option, that 25% gain in competitiveness can really be brought about only by cuts to public services, salaries and pension funds. That is simply not an option, and for that reason it makes those austerity packages so much worse.
To my knowledge, the IMF has never lent to a country or put in place a programme in a country that cannot devalue, which is why the Government line that only three of the 53 IMF packages go to the eurozone is disingenuous. Can the Minister name one country, one package in those 50, where devaluation is not an option? That is the fundamental difference. In the three packages in the eurozone, devaluation is off the table, which will make the austerity packages worse.
Having asked the Minister several questions, I was hoping that a number of notes would have been passed to him so that we could get some answers. I am sure he has pre-empted my questions and has the answers in his brief. Again, I would welcome him intervening to name one of those packages outside the eurozone in which devaluation is not an option. They do not exist. Devaluation is terribly important when it comes to an IMF package, but we are not allowing that option in the eurozone. That is another reason why these IMF packages will fail.
Neil Carmichael (Stroud) (Con)
When the IMF intervened in our economy in 1976, when Denis Healey was fighting to save the pound, that intervention arrested the devaluation of the pound.
Mr Baron
I agree to a certain extent, but my hon. Friend cannot deny that we had the ability to devalue. The currency markets could take the strain and, to a certain extent, they did. If we look at the strength of the pound since the second world war, we see that it has been a sorry tale of devaluation. Had that devaluation not taken place and had we been locked into a system that did not allow devaluation, my goodness me, the austerity packages introduced to compensate for that lack of competitiveness would have been very severe indeed.
Mr Christopher Chope (Christchurch) (Con)
I share my hon. Friend’s scepticism about the role of the IMF in the treaty that establishes the European stability mechanism. Does he recognise that that treaty is littered with references to the IMF, even to the extent of including a provision that says that no application can be made for a loan unless a similar application has been made to the IMF first?
Mr Baron
My hon. Friend is absolutely right. The IMF is an integral part of the rescue package for the eurozone, but that is something that the Government are, at least publicly, not willing to acknowledge, which is very wrong indeed.
I question why the IMF is getting involved in these bail-outs. The eurozone is a currency union. If a state within the United States got into trouble, the IMF would not be expected to ride to the rescue. The same should be true of the eurozone. I contend that Greece is not economically sovereign: it has no central bank, it cannot set interest rates, it has no currency, and it cannot devalue. I would go so far as to question whether Greece is even politically sovereign. At least in the United States, the people can elect the governor of individual states. That is not happening in Greece and Italy. In some cases, we do not even have a Government.
Mr David Nuttall (Bury North) (Con)
My hon. Friend refers to the possibility of an American state finding itself in financial difficulties. Of course that has already happened in California. Can he confirm that, in those circumstances, the IMF was not involved and was not able to contribute?
Mr Baron
That is absolutely right. My hon. Friend reinforces my point. The US is a currency union and the IMF is not expected to ride to the rescue there, yet it is expected to ride to the rescue of countries in the eurozone, which is also a currency union. That is completely wrong.
Glyn Davies (Montgomeryshire) (Con)
Let me ask my hon. Friend about the wider context. We are dealing with the financial aspects here, but I have always had a greater interest in the constitutional aspects. It seems that the euro is destroying democracy as we know it. Should we not consider that issue, especially as we are seeing the end of democracy in Greece and Italy? Europe has always been my concern, which is why I opposed the whole thing in 1975. We are now seeing the creation of a single country in Europe, to which the British people have not signed up, and that will eventually lead to trouble.
Mr Baron
My hon. Friend is absolutely right. If he needs confirmation, I suggest that he look at the front page of City A.M., where he will see what Angela Merkel has said about political union. There is a political deficit in the eurozone at the moment, which is why Governments are being appointed and not elected in Greece and Italy. That is a consequence of the fact that the eurozone and the EU are hellbent on political union at the cost of democracy and getting the people’s consent.
Mr David Davis (Haltemprice and Howden) (Con)
I congratulate my hon. Friend on a formidably cogent speech. Sadly, I will not be here to hear the Minister’s attempt to answer it. The democratic deficit that I am worried about is the one in this country. We are having this debate in Westminster Hall. Whatever its outcome, it will not change what happens in the IMF. Is there any way that Parliament can have a say on British taxpayers’ money being used in pursuit of an end that is against their interests?
Mr Baron
My right hon. Friend makes a good point. By raising such issues in Parliament and in collaboration with other like-minded individuals, we can hope that we can force the Government to think again and to look at the various mechanisms at our disposal in the House. If we do not raise these points in our Chambers, the Government will not answer the questions that need to be put to them. My right hon. Friend is right; we will not change anything today. The hope is that together we can force the Government to think again.
Let me go back to why the IMF is getting involved at all. What makes the situation even worse is that the eurozone has resources that could do much more to help. For example, the Bundesbank has reserves of £180 billion, £130 billion of which is in gold, and gold is going up in price. That is in stark contrast to our country and the action of the previous Government, who sold gold at near the bottom of the market.
I agree with the point made by my hon. Friend the Member for Clacton about why we supported Christine Lagarde, the former French Finance Minister, being put in charge of the IMF. It is like putting the debtor in charge of the debtors’ prison. Christine Lagarde has admitted on record that the bail-out arrangements broke the rules, but she said that that could be justified because we all had to rally round to save the euro, which itself is a political objective. That is complete nonsense and it does not augur well for the future, and the Government taking confidence in the fact that the IMF has signed off the packages does not augur well either. The IMF signed off the initial Greek package and look at what happened then: the situation went from bad to worse. I suggest that it will get worse still. Having some sort of blind confidence in the IMF signing off the packages is basically abdicating one’s responsibilities of Government to question what is going on. I do not see that detailed questioning happening at the moment.
I suggest that the Government’s line on this issue—their approach to the eurozone crisis—is symptomatic of their flawed approach generally to the euro. The Government seem to have fallen in behind the French and Germans in this cry that somehow we must save the euro. I suggest to the Minister that that is economic clap-trap. Binding divergent economies into a single currency without full fiscal union was, and remains, a massive mistake. Similar thinking warned us of the perils of exiting the exchange rate mechanism, yet look what happened then: almost to the day that we exited the ERM, our recovery started and it was a very strong recovery.
I suggest to the Minister that the sky will not fall in if the euro breaks up. We will still have, by and large, a free market, although I think that it could be improved, and we will still have consumers demanding goods. If anything, by not trying to save the euro, we could help to stimulate demand, because by trying to save the euro we are cutting off one of the key ways to improve competitiveness—devaluation. By cutting off that option, we are making the austerity packages worse; we have to add to the austerity packages because the countries in need do not have the option of devaluation.
Saving the euro is making matters worse, yet the Government are silent on this issue. They have shown no leadership. They have fallen behind the line that saving the euro is everything—it is not. I suggest that the Minister and the Government look at the experiences of Norway and Switzerland, which have their own currencies and free trade agreements with the EU. Those countries are doing very well. Saving the euro should not be the ultimate goal, because it is making the austerity packages worse.
Mr Stewart Jackson (Peterborough) (Con)
My hon. Friend is making a powerful and convincing speech, but is the situation not even worse than he suggests, in that the Government are effectively adopting a de facto policy of support for a tighter fiscal union, which in the long term will inevitably militate against this country’s strategic political and economic interests as a sovereign state?
Mr Baron
My hon. Friend makes a good point. By joining in the chorus that we must save the euro, we are implicitly supporting fiscal union within the eurozone, which is the wrong approach to take, certainly for this country’s interests. But, no doubt, the Minister will be able to clarify the Government’s position on that issue.
The same flawed approach by the Government has denied the people of this country a referendum on the EU and our future relationship with it, while allowing massive budget transfers to Brussels. Our budget increase totals about £21 billion or £22 billion. It will increase from £19 billion for the last seven years to about £41 billion in the next seven years. What could we get for that additional £21 billion or £22 billion? We could get 100,000 police officers on the streets for each of those seven years, 100,000 nurses in our hospitals or 100,000 teachers in our schools. How could we stimulate growth with that money? We could cut basic rate income tax by 1p in the pound for each of the seven years. We could cut small business corporation tax by 6p in the pound. My goodness me—would that not be a concrete measure to stimulate growth and encourage competitiveness in this country?
I am afraid that the Government’s thinking on this issue is intellectually incoherent, economically flawed and, perhaps worst of all, flies in the face of what the majority of people in this country want. What we want is leadership—strong leadership. We hear noises such as, “Oh, regulation from the EU hurts growth.” There is nothing new in that; saying it is just making noise for the sake of making noise. We have known that about EU regulation for years. What we want is strong leadership that repatriates powers to this country, stops the salami-slicing of our political sovereignty, encourages the establishment of a genuine free market in Europe and guards against our liabilities to the eurozone crisis. But I do not see that strong leadership in front of me today, which worries me and a number of my colleagues and right hon. and hon. Friends greatly. Meanwhile, we stumble on.
I suggest to the Minister that this country will wake up about this issue one day and that we will renegotiate with the EU. My hope is that we will renegotiate a free trade arrangement, similar to the arrangements that Norway and Switzerland have, and that we have a constructive businesslike arrangement with the EU, without sacrificing political sovereignty and without going down the road of political union. My concern is about the damage that will be caused to this country between now and then and the cost that we and our children will have to bear.
I hope that the Minister, as he has refused my invitation to intervene on the questions that I have put to him, will come up with some answers when he winds up this debate. I hope that he answers the questions that I have put, because they are the questions that people in this country are asking.
Martin Caton (in the Chair)
Order. I want to start the winding-up speeches at 10.40 am. At least seven hon. Members are indicating that they would like to speak, so greater brevity of speeches will mean a greater number of them.
Jim Shannon (Strangford) (DUP)
I am grateful to you, Mr Caton, for allowing me to speak. I commend the hon. Member for Basildon and Billericay (Mr Baron) for bringing this matter to the House today and giving us all a chance to express ourselves in the way that our constituents have expressed themselves to us.
I want to make it clear from the outset where my opinion lies—we need to look at the signs in front of us and then take action. Iceland was not prepared to pay back a bail-out; the Greeks were not willing, or perhaps they were not able, to make the cuts necessary to meet their payments; and now we are looking towards Italy and all the chaos that seems to be enveloping that country. For too long, we have watched other countries prosper with bail-out funding while we cut funding to schools, hospitals and infrastructure to remain solvent and to claw our way back to a sound financial footing, which are the very things that the hon. Gentleman discussed.
For too long, we have paid into the EU while watching our farmers and fishermen flounder under the weight of EU dictates. We watched other nations flaunt the rules even as we were fined £60 million in Northern Ireland for mistakes in filling in some forms. Just last week in Portavogie, which is in my constituency, I had an opportunity to speak to some fishermen. They told me that they are weighed down by bureaucracy, such as new rules on mesh sizes for nets and types of net by red tape and by monitoring, which they have to pay for themselves because the cost of policing fishing falls on the heads of fishermen.
I believe that the people want out. They see the crisis and that the house of cards is no longer simply swaying but precariously quivering with the wind of change blowing through Europe. We stood in this House last month and advocated allowing the people to have a referendum on Europe. We were denied the opportunity to have a referendum by the strong whip of the three major parties. At least my party, the Democratic Unionist party, stood strong and united in our call for a referendum. We feel that that is what the people want us to do. People must be given the opportunity to have their voices heard.
My mother had a wee statement; she had lots of wee statements, as mums always do. She said, “Don’t throw good money after bad,” but that is what is happening in Europe. How long will it continue? When will it end? Is this not the chance to leave Europe, or to change it so that it no longer resembles the red-tape-loving, common-sense-ignoring, self-serving, life-sucking drain of money that it has been for so long? Angela Merkel, the German Chancellor, has said that she wants substantial treaty change to strengthen it and to give the European Commission the chance to impose fiscal discipline on excessively indebted states in the single currency area. I am concerned that other European countries have a clear policy—a strategy—about what they want, and that they want us to be a subservient part of it. We want, and need, more. We need to be free to fish our seas and farm our lands responsibly, as we have done in the past, and we need not to be bound by restrictions placed upon us by those who are self-serving in Europe. As we struggle in this financial mire, China sits back and laughs. It is time to take control.
I have spoken before on the IMF, and I say again that the money is not for bailing out the euro, because the eurozone countries should and must bear the brunt. I stated in the House earlier this year:
“It is clear that the European financial stabilisation mechanism is not fit for purpose…On 9 May 2010, the European financial stability facility was created, and it is a special purpose vehicle agreed by 16 members of the eurozone and aimed at preserving financial stability in Europe by providing financial assistance to eurozone states in economic difficulty.”
That is very commendable, but perhaps unworkable. Furthermore:
“Thus far, we are not at all involved, but no to the euro meant no to the EFSF. The tricky part came with the notion that the facility may be combined with loans of up to €60 billion from the European financial stabilisation mechanism, which is again reliant on funds raised by the European Commission using the EU budget as collateral, and up to €250 billion from the IMF, all to secure a safety net of €750 billion.
If there is no financial operation in activity, the EFSF would close down after three years, on 30 June 2013. If there is a financial operation in activity—which of course there is—the facility would exist until its last obligation had been fully repaid. There has indeed been activity, and a good deal of it involving the EFSM, despite the fact that it should not have been involved to the extent that it had an equal if not greater share of the bail-outs. The purpose of the European financial stabilisation mechanism is to provide an emergency funding programme that is reliant on funds raised on the financial markets and guaranteed by the European Commission using the European Union budget as collateral.”—[Official Report, 24 May 2011; Vol. 528, c. 813.]
In my opinion, that has not changed, and as we look at Greece and Italy and wait to hear of the next country to fail, it is clear that despite the Prime Minister’s claim that there is no risk to the taxpayer, there is a danger that the money will not be used for the good of the United Kingdom. That is a huge risk, and it cannot be allowed.
I sincerely urge the Minister to think clearly before any more money goes into the IMF. We have been hoodwinked before to our detriment and to the financial cost of everyone in this country, and it cannot happen again. Let us not forget that we are fighting to reduce the deficit here and that we must prioritise. I commend the Prime Minister on his idea of the big society. Regardless of whether it is workable, I support the thrust of it, but it will be difficult for it ever to happen and for the benefits to be seen in the UK, never mind Europe-wide. As I stand here today representing my constituents, I state very clearly that we should not put any more of our funds into the IMF without first being certain of where the money will go, to the penny. We cannot afford to do otherwise, because the people do not want us to, and it is their money that the Government are toying with. For the first time since joining the EU, it is time to work things out to our advantage. We need to take that chance, and we need to take it now.
I support the thrust of what other hon. Members have said today, and I hope that the Minister will respond positively to our concerns as MPs and elected representatives. The concerns are genuine. The people I represent, who have put me here, are very clear: they want us out of Europe, and they want us out now.
Mark Field (Cities of London and Westminster) (Con)
I thank my hon. Friend the Member for Basildon and Billericay (Mr Baron)—my very old parliamentary friend—for securing this debate. He talks with immense sense and, as a man who had a job outside politics before entering this place, immense experience. After 20 years in the financial markets, I suspect he has forgotten more about finance than many people who talk on these matters on all our behalves know.
Conventional wisdom dictates that high noon for the euro is imminent. The assumption is that the single currency will collapse or that the eurozone will be forced into a headlong rush towards full fiscal union. Nevertheless, despite all the euphoria of the past week about Italy, I suspect that we shall experience many more months of tottering along from market crisis to emergency meeting, to fully fledged conference and half-hearted bail-outs—the sort of disaster to which my hon. Friend has referred. Indeed, if—it is a very big “if” and no one seems to be focusing on it at governmental level—the global bond market remains relatively stable, the cheap price of Government debt provides little incentive to create a viable long-term structure for our ailing continent’s economies. There is a massive bubble in the bond market that no one is really talking about. The Chancellor prides himself on Britain being a safe haven; America, with its $13 trillion debt, is an even safer haven with rather lower interest rates, as is Germany. It is absolute madness when we are receiving 2.2% for getting our debt away and have inflation of 5.6%, and I am afraid that the bubble will burst at some point with, I suspect, disastrous effects.
Many purists will rightly bemoan that politics is being allowed to outweigh the economic realities, and that cannot go on for ever. What is so dangerous about the utter lack of leadership and vision among Europe’s leading politicians is that the longer this crisis continues, the more private sector confidence drains away and global markets begin to discount the entirety of Europe. More crucial still is that the two distinct problems that face many struggling European economies, solvency and liquidity, are becoming conflated in the minds of markets. The Greek issue is simply one of solvency, or rather insolvency. Greece must be allowed to default, from within the eurozone, I suspect. I support its creditors, who are predominantly EU banks, taking a substantial haircut. They lent the money at attractive interest rates, implicitly recognising the risks, and they must now take the consequences.
Mr Carswell
My hon. Friend talks about allowing Greece to default within the eurozone. Surely that is the worst of all possible worlds. Surely the way to handle the problem is not just to default but to decouple and set Greece free. Default within the eurozone is the worst possible option.
Mark Field
The only difficulty is how on earth it would ever borrow money again. Greece has been living in Alice in Wonderland economics for the past 20 years. We need to look at what happened in Argentina. That economy has struggled massively for the past decade, because it has not been able to borrow money in the international markets.
Mr Carswell
Does my hon. Friend not agree that today Argentina has a better bond rating than many eurozone countries and that that shows the way?
Mark Field
I suspect that that says more about eurozone countries than about the fundamental health of the Argentinean economy, but if my hon. Friend will excuse me, I will continue.
With the failure of European leaders and Finance Ministers truly to grasp the nettle, the liquidity problems faced by Portugal, Ireland, Spain and Italy are becoming ever more deep-seated. It is very difficult for Angela Merkel in Germany—as someone who has German blood running through his veins, I accept that. I appreciate that her domestic political position appears ever more precarious, because the EU’s economic powerhouse should have ceded control of the deepening crisis to the European Central Bank. The ECB’s mandate could, and perhaps should, be to provide market intervention to restore and maintain confidence on behalf of all solvent eurozone economies, but in her actions to date, Mrs Merkel has indicated that the politics are just too difficult for her nation, which remembers the days of hyperinflation during the early part of the Weimar Republic. Furthermore, all this requires, as ever within the EU, bypassing democratic safeguards, and it potentially involves unfathomably vast quantities of central bank support, with potentially hazardous medium-term economic consequences.
Mark Field
I hope that the hon. Gentleman will excuse me; I know that others want to speak.
The twin lessons of the economic depression in the 1930s are that avoiding catastrophe requires swift action and that once a process is under way we should not worry unduly about overkill. It is better to pump too much liquidity into the system, rather than inadequate amounts. A financial system in free fall requires active central bank intervention, however irrational the collapse of market confidence. Nevertheless, in the absence of a central bank for the 17-nation eurozone that has real political clout or, more important still, sufficient funds to provide comprehensive cover in a liquidity crisis, it is regrettable that the UK is now expected to stand ready to bolster the IMF. The IMF seems to be the only institution that can bail out countries that are close to default—Italy and Spain, for example. My hon. Friend the Member for Basildon and Billericay is absolutely right that there is disingenuous thinking and talking within the eurozone. The reality is that if Italy or Spain has a problem, the European Central Bank and the European financial stability facility cannot address it. Clearly, such a problem must be addressed by the IMF.
Without stable financial markets, there is little hope of the sustained growth essential to economic recovery. The UK economy is a global leader in the financial services sector, but it is especially prone as a consequence to the adverse impact of uncertainty on worldwide financial markets. No UK taxpayer will stand by and watch with any sense of satisfaction as unimaginably large sums of money or guarantees are given to bail out the banking system.
As has been pointed out, our Prime Minister and the Chancellor have repeatedly vowed that there will be no further bail-outs of the eurozone. However, in the event of a collapse in market confidence for Italy or Spain, the UK, as a founding member of the IMF, will almost certainly be expected to increase both its absolute funding and its guarantee facilities to the fund, which is an extremely unpalatable prospect. However, I also accept that a UK failure to act would not only have immediate, serious consequences for the global financial services sector, but amount to an abdication of our responsibilities as a mercantile nation in the international field of trade and commerce.
As MP for the City of London, I reluctantly accept that I have no choice but broadly to support the UK Government’s proposal to underwrite further funds to the IMF. Nevertheless, I regard that as a matter that must be addressed not by the Executive alone but also here in Parliament. If the UK taxpayer is to be further exposed to IMF loans and guarantees, that must happen only after a statement from the Prime Minister outlining why such a course of action is in the national interest, after a full parliamentary debate and as the consequence of an affirmative vote in Parliament. In my view, nothing less will do.
I know that many other Members want to speak. There is much more that I would like to say, but I will touch on a point that my hon. Friend the Member for Basildon and Billericay made regarding the wisdom behind the UK Government’s enthusiastic promotion of a headlong move towards fiscal union in the eurozone. I say to the Minister that we should be extremely careful what we wish for. Such a development would embolden the eurozone, even in its apparent weakness, to embark on a rapid and radical political power grab throughout the EU. Alarm bells would ring in the City of London. It would be very bad news for this country, and we should not stand by and let it happen without ensuring that our national interests are properly served.
Mr Christopher Chope (Christchurch) (Con)
It is a pleasure to participate in this debate. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on his good sense in calling for it. It is fantastically well attended, and it is a pity that it is not longer.
At business questions on Thursday, I raised with the Leader of the House the issue of the loan to Ireland. He said that he would tell the Financial Secretary to the Treasury of my interest in the subject, and that my hon. Friend would come to this debate with the answers to my questions. I hope that he has had due warning.
The loan to Ireland goes to the heart of the issue of trust, to which my hon. Friends have referred. The people in this country do not understand what is happening in their name. The Chancellor announced that we would give a £3 billion loan to Ireland. That is £50 a head for every member of the UK population. He announced that the rate of interest would be about 6%, in round figures, and that that would give the British taxpayer a healthy profit.
It then emerged in late July that the interest rate was likely to be lower, but had not yet been decided. The first tranche of the loan was paid to Ireland on 14 October. Even as we speak, the rate of interest on that loan has not been agreed. It is still being negotiated downwards. At the same time, the Irish bond rate has remained pretty constant, at more than 8%. Why are we negotiating the rate downwards? Why, indeed, are we lending all that money to Ireland when our own small businesses are crying out for money?
Mark Reckless
Is my hon. Friend aware that it is not just the interest rate that is uncertain but the priority of the loan? When addressing the Committee considering the Ireland and Portugal bail-outs and loans, the Financial Secretary stated that the loan to Ireland ranked broadly the same as those of the IMF and other international institutions, when actually it ranks below the IMF and the EFSF.
Mr Chope
My hon. Friend makes a good point. We were told that the IMF would help Ireland and that we could help Ireland and influence its economic policy through the IMF. We were also told that we needed to give Ireland a £3 billion loan so that we could have even more influence, but I do not think that it is written in any agreement that to have yet more influence we need to reduce the interest below the rate agreed at the outset. The fact that the Irish have drawn down on the loan shows that they do not look a gift horse in the mouth. They realise that this is a great opportunity.
Let us consider the opportunities in Ireland. I got my assistant to research the interest rates available to small businesses in Ireland at the moment, so this information is from yesterday. Allied Irish Banks is offering loans of up to €100,000 to small businesses at a “competitive rate” of 4.4% variable. New and early-stage businesses under three years old can get that money. Now, I do not know what it is like for my hon. Friends, but in my constituency it is almost impossible for businesses to get a loan from the bank at a rate of 4.4%, if they can get one at all. We know that Allied Irish Banks is the beneficiary of a £3.5 billion bail-out. We are giving Ireland money that it is using to subsidise its banks, which in turn are subsidising its small businesses to compete unfavourably against ours.
Ian Paisley
I agree with the thrust of what the hon. Gentleman is saying. Does he agree that it is actually far worse? The Irish state bank, the National Asset Management Agency, holds £14 billion of property in this city, which it can dispose of any time it wants and put the money back into its own national coffers. Is it not time that we had a Select Committee inquiry into NAMA’s activities in the United Kingdom jurisdiction?
Mr Chope
That sounds to me like a good point. People should start selling their assets. That is what families must do if they get into difficulties. We have to think about selling assets, which is what countries in debt should be doing.
Another example is the Bank of Ireland, which received €5.2 billion in the banking bail-out, and which is offering interest rates of 5.24%. More than half of all loan decisions are made on the spot and 87% of applications are approved. Would that we had similar arrangements in the United Kingdom. By comparison, HSBC was offering small business loans yesterday with a starting interest rate of 7.9%, which is obviously only for the most favoured customers.
Can the Government explain why we are reducing the rate of interest on the Irish loan? When the Bill went through the House, I voted against it, but it passed on the basis that we would make a significant profit on the interest. Now that the Irish are drawing down on the loan, surely we should know what the interest rate is. Is there any other organisation that can go to the bank and get a loan while the bank manager says, “Don’t worry, we’ll agree the interest rate later”? It seems reckless in the extreme.
My final point deals with the treaty establishing the European stability mechanism. Most people do not realise that the European stability mechanism is a new international financial institution that will have international immunity, and that it will be funded by the 17 members of the European Union. What will Ireland pay? Its subscription will be €11.145 billion, which is about £10 billion. Another way of putting it is that we are lending money to Ireland so that Ireland can, in turn, pay its subscription to the European stability mechanism. It is a farce.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mr Caton, for giving me the opportunity to contribute to what is probably the most important subject of debate that we will have during this Parliament. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate and on presenting his arguments in a challenging and clear way. I look forward to the Minister’s response to the points he has raised.
Most of my hon. Friend’s speech dealt with the financial aspects of the issue. My view, however, is that it is not possible to consider the issue without also looking at the wider context. Indeed, I raised that point when I intervened on him. The key concern for me and many others is that the euro is destroying democracy as we know it in western Europe. That was my main reason for opposing Britain’s entry to the euro when it was established.
I am not sure how many of the hon. Members present were involved, like me, in the 1975 campaign to leave the European Economic Community, but I think that some of us might have been—I can see one or two. At the beginning, we thought there was a chance that we would be successful, but in the end the argument that I supported was well beaten. I was not trained as an economist—or as anything really; I left school when I was 16 to be a farmer—but my argument was that the public’s gut instinct in those days was that we were creating a huge bureaucracy whereby the ability to influence decisions in our country was to be transferred somewhere where we would not have influence. That was the fundamental gut instinct that drove us to the “no” side.
When the eurozone was being established, I became involved in the opposition to it, which was unusual, because I was the chairman of the Agriculture and Rural Development Committee in the National Assembly for Wales and the agricultural community was fairly supportive of Britain joining the euro. I remember being dismissed on platforms as an extremist, but I was simply not in favour of Britain joining the euro. My argument was exactly the same as that which many people are making today—to create a successful eurozone almost certainly means financial union. Nobody has hidden that. In 1975, the purpose of many people who were behind the establishment of the EEC was that we would eventually move to political union in Europe. That was the small print. Today, I hear people saying that they thought we were joining an economic community, but that is not what I or a lot of other people thought.
Mr William Cash (Stone) (Con)
My hon. Friend is making an important point. Last night, the Prime Minister made a speech at the Guildhall in which he called for fundamental reform in the European Union, but it is not really just a question of fundamental reform in the EU, is it? What we have to have is a fundamental change in the relationship between the United Kingdom and the European Union, because it is a failed project. We have been enmeshed in it and it is increasingly causing damage to our own economy.
Glyn Davies
My hon. Friend has anticipated my next point, although I shall not use precisely the same language that he uses and has used for a long time—probably about 30 years. The Government’s policy, which I support, is that we should seek to repatriate powers from the European Union. That is easy to say, but for the Government to deliver that objective, the Prime Minister, Chancellor and Foreign Secretary have to have a way to do so. As Members of Parliament, we have a responsibility to think about exactly how we are going to do that. Which parts of European policy, precisely, do we wish to repatriate—whole blocks or just specific parts? The issue is hugely complex and a tremendous amount of work will have to be put in to enable it to be addressed.
We could speak for hours on the issue—I am sure that I could. A lot of Members want to speak. I have raised the points that I wanted to make and look forward to the Minister’s response.
Stephen Hammond (Wimbledon) (Con)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing this debate. Like him, I spent some years in the City of London, in various institutions. I want to address three things. First, I want to look at the theoretical construction of the euro as it was set up. My hon. Friend talked about the various eurozone summits and why they failed to find a solution. The reality, of course, is that a theoretically implausible project means that any eurozone solution will not be practical. I also want to talk about some of the reactions, and conditions the International Monetary Fund might want to attach to its bail-out, and our interest in it.
The single market was much welcomed in terms of the encouragement of free trade, which then drove some people to the aspiration for a single currency. It was clear that those countries that were going to join would lose the basic levers of economic policy, namely taxation—that is, fiscal policy—as well as interest rates, exchange rates, protectionism and, indeed, unemployment. It was also clear to any undergraduate, or even A-level economist, that the reality was that a fudge might be possible in good times, but not in a recession. The opponents of that view pointed to optimal currency area theory, which showed that the transaction costs would be lessened and that everything would, therefore, be fine. In practical terms, however, we have seen a theoretical misconstruct. The euro was a misconstruct because it failed to recognise exactly what that theory says: for optimal currency area theory to work, the economies have to be homogeneous in nature or flexible in their arrangements, so that they can move to homogeneity, or a currency union needs to be established alongside a fiscal union at the same time; otherwise, the overwhelming point is that whatever is set up in terms of a single currency will fail.
On the economies that were in the eurozone when it began—the wealth of Germany, the emergence of Ireland and the agrarian underdevelopment of Portugal— surely the appropriate description is diverse rather than homogeneous. Moreover, if we look at the policy formulation since the currency has been in existence, we see that there has been no flexibility that would allow movement to a homogeneous economy. Unless we recognise that the project is flawed in theory and do something about the theoretical basis, we will never find a practical solution. It is not surprising that we have had 15 eurozone summits that have provided no solution whatever.
The absurd reactions of Europe’s senior eurocrats are also of extreme concern. They are preventing any serious discussion of a resolution. The basic premise at the moment is, “The euro must be saved, the euro must be saved, the euro must be saved.” Only last week, President Barroso said yet again that the euro should be the norm for Europe. He even denied the UK’s permanent right to opt out. The President of the European Council, Mr Rompuy, also made an extraordinary remark over the weekend when he suggested that, if the eurozone’s integrity was not preserved, the functionality of the internal market could not be taken for granted. That is an absurd proposition. First, we need only look at the history of how the single market functioned before the euro came into being. Secondly, a single market does not need a single currency, but I will not bother to go into the theoretical construct for that.
Mr Cash
Does my hon. Friend remember Madame Lagarde saying on 17 December 2010, when she was Finance Minister for France, that they broke all the rules because they wanted to save the euro at all costs? The rules have been broken, and that relates to the stability and growth pact and every single aspect of this.
Stephen Hammond
My hon. Friend is right, and my hon. Friend the Member for Basildon and Billericay made exactly that point. I will not go on, but it seems simply ridiculous. If the eurocrats of Europe think that saving the euro is more important than working out the solution to the economic crisis, progress will be, at best, tortuous.
From a UK perspective we must be interested. The idea that we are not interested in what the IMF bail-out is—or, indeed, in the fact there is a eurozone crisis—is clearly wrong. The impact on the UK is extraordinary. We trade with the eurozone, and therefore have a significant interest. My hon. Friend the Member for Cities of London and Westminster (Mark Field) referred to the possibility of a default of Greek banks. It may or may not be true that we have little or no exposure to Greek banks—I think it is broadly true—but we have great exposure to banks that lend to Greece within the eurozone. That contraction of balance sheets will affect lending to small and medium-sized enterprises in the UK. Therefore, we must have that interest.
A basic and necessary precondition of what the IMF must say to the leaders of Europe is that they must recognise their wider international responsibilities. My hon. Friend also made the point about the Germans effectively wanting to control the eurozone, but not being prepared to accept the economic leadership that that implies by allowing the ECB to attempt to solve the liquidity crisis. We should extend money to the IMF, but I am realistic in accepting that, overall, that means the IMF would extend extra money to the eurozone. Any money that the IMF extends to the eurozone should be met with the precondition that the ECB becomes entirely independent and able to print money for the eurozone, or else it is bound to fail.
The IMF also needs, and almost certainly will accept, a necessary theoretical construction that provides a solution. The most likely solution is that we see a number of countries leave the eurozone—leave the euro—and some perhaps form a tighter unit. That being so, the IMF must stand up and say that it is prepared to fund the cost of dislocation for those leaving the eurozone, so that they have a chance to devalue, make the necessary adjustment to living standards and the necessary lowering of labour costs to allow a competitive solution.
Mr Carswell
Is my hon. Friend saying that he wants the IMF to fund the cost of eurozone members’ dislocation from the euro?
Stephen Hammond
I am saying that I accept that the IMF will make a bail-out to the eurozone. On that basis, one of the best solutions for the eurozone is for a number of countries to be allowed to leave the euro. The IMF will therefore need to fund the cost of the dislocation of those countries leaving the euro to give them any hope, attendant with their devaluation, of an economically sustainable future.
Stephen Hammond
I notice that I have gone on rather longer than my five and a half minutes. I had a number of other points, but thank you for the opportunity to speak this morning, Mr Caton.
Neil Carmichael (Stroud) (Con)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing this crucial debate. A large number of important matters have been raised, and it is a good opportunity to discuss them in this Chamber.
I take issue with the assumption that devaluation is a good thing. We have formally devalued twice since the second world war, and we are in a slowly-emerging devaluation. Post-departure from Bretton Woods, we effectively devalued over time. I see no evidence that any of those devaluations ever led to long-term improvements in productivity or competitiveness, so although the IMF, as it has in the past, has perhaps lent to countries that can and have devalued, it is not necessarily a good thing.
Mr Carswell
Does my hon. Friend accept that Argentina’s decision to decouple from the dollar and default on its debts helped it to achieve economic growth? Does he think that that was a good thing or a bad thing?
Neil Carmichael
I am a great believer in all countries growing. Argentina is doing reasonably well, but that has more to do with the neighbouring countries that it trades with in Latin America than with decoupling from the dollar. However, I take the point that some countries will take the opportunity for a quick leap forward.
Mr Carswell
Does my hon. Friend agree that the IMF’s decision to allow the Ugandan shilling to devalue helped to stimulate growth in Uganda in the 1990s and that, without that devaluation, it would not have enjoyed 15 years of prosperity?
Neil Carmichael
If my hon. Friend thinks that the devaluations of 1949 and 1967 in this country led to a period of improved productivity and competitiveness, I would dispute that. I want to pursue that argument, because that is what I think is important.
Mr Baron
My hon. Friend is being generous in giving way. Devaluation is not necessarily the best thing going, but it helps to take the strain for a currency that is weakening and therefore allows austerity measures to be perhaps less harsh than they would otherwise be. That is the point. There is no economic evidence to suggest that, if we did not allow devaluation to take effect, austerity packages would be worse and make the economic downturn much worse.
Neil Carmichael
I can certainly understand my hon. Friend’s argument, but it is worth pointing out that devaluation is not a panacea and should not be used frequently.
Neil Carmichael
I will take one more intervention on devaluation, or this discussion will be devalued.
Mr Hollobone
This country has devalued on a trade-weighted basis by 25% since the peak in 2008. If we had not had that devaluation, this country would now be inflicting on itself a far harsher austerity package and unemployment would be far higher. Without the devaluation mechanism, countries face far starker choices.
Neil Carmichael
This Government’s real achievement is to address the deficit. They have set out a plan that is effective and encouraging markets to understand that we are taking the appropriate action. That is one of the benefits of being outside the euro, and we should focus more on that, rather than worrying about the benefits or otherwise of devaluation. I repeat for the last time that I do not think that devaluation is a panacea that we should be pursuing.
Neil Carmichael
One of the obvious pieces of evidence is that we are not talking about the IMF coming to bail us out—a huge achievement by the Government that should be recognised. We will have to move on from devaluation, but I think that I have made my point and others have attempted to make theirs.
Inflation would certainly help debt reduction, because it does in the long run. As I said in an intervention, when Denis Healey borrowed money from the IMF, that did arrest devaluation. We were more easily able to pay the IMF back quite quickly because of the impact of inflation. I do not support inflating the economy in that way either, as a remedy.
Mark Field
In the late 1970s, inflation was coming down quite rapidly from a height of 26% in 1975. One could argue that there has been a deliberate policy by the Bank of England, perhaps in cahoots with the Treasury, to allow a little bit of inflation to go into the system. That is exactly what is happening here in the UK, where historically we have had high real inflation, which is having a major impact on all our constituents’ living standards.
Neil Carmichael
Inflation did go down, but after the IMF loan was made. It reached a peak in 1976, which I think was 26%. That happened to coincide with the time of the IMF loan, so that is the position that we should discuss.
Mr Edward Leigh (Gainsborough) (Con)
My hon. Friend has been very generous in giving way. He will accept—will he not?—that we should not have stayed in the exchange rate mechanism.
Neil Carmichael
Well, we were blasted out of the ERM. We do not want to repeat that fiasco, and we should all recognise that.
We talked briefly about the United States. Gerald Ford, President of the United States in the mid-1970s, refused to bail-out New York, and quite right, too. He was a fiscal conservative. That was the right decision in the long run, and, of course, a decision that did not affect New York’s membership of the dollar. I just wanted to put that on the record.
We must focus on two things, and the Prime Minister identified them both in his speech yesterday. I want to ram home the importance of reforming the European Union, because that is what it needs. In particular, we have to drill down on the single market, to ensure that it is a single market and that competitiveness in goods and services is enhanced. We can really do that.
On euro measures, this country would be making a big mistake if we assumed that the euro will not affect us significantly, because it certainly will. [Interruption.] I shall wind up. I have been so generous with interventions that I do not have the time to point out that we need fiscal union in the eurozone, the ECB to be enhanced—as my hon. Friend the Member for Cities of London and Westminster (Mark Field) rightly said—and much more rigorous auditing of what is going on.
Last but not least, there is a democratic deficit, although the IMF extension was discussed in the House and we voted on 11 July. I have noticed two things. First, Germany and France are effectively bypassing the Commission in a lot of their decisions—
Martin Caton (in the Chair)
Order. The hon. Gentleman has gone on beyond the time at which I said that I wanted to start the winding-up speeches. Many Members have asked the Minister questions to which they want to hear the answers. I should be grateful to the hon. Gentleman if he stayed seated now.
Chris Leslie (Nottingham East) (Lab/Co-op)
I was interested to hear the comments of the hon. Member for Stroud (Neil Carmichael). I have learnt a lot, including Gerald Ford’s attitude to New York city and the history of the Ugandan shilling. At one point in the debate, I was almost feeling sorry for the Minister, given the heat that he is falling under and that he is simply following orders—it is not entirely his fault—but in the short time available, he needs to explain not only the answers to the questions asked, in particular by the hon. Member for Basildon and Billericay (Mr Baron), who gave a thorough and refreshing contribution, but an area of policy that has not been touched on as much as it should have been and that is central to the debate, which is growth. How will we rejuvenate growth, not only in the UK but throughout the eurozone, as a way to solve the crisis?
The Office for Budget Responsibility continues its relentless drive to downgrade economic prospects, and the European Commission has forecast a massive change in our fortunes. Last year, gross domestic product growth was supposed to be 2.2% in 2011, but a couple of weeks ago, that prediction was downgraded to only 0.7%. We are now forecast to have the slowest growth in Europe, with only Greece, Italy, Portugal and Cyprus growing more slowly in 2011. The Office for National Statistics, however, shows that exports to the euro area were rising by 17.3% in the third quarter, so the eurozone alone cannot be an excuse for the UK’s lack of growth.
Given the fragility of our economy and our vulnerability, I accept that prolonged uncertainty in the eurozone could worsen our position, but it would be disingenuous of the Treasury to suggest that our woes are caused by the eurozone situation. I would be worried if it genuinely thought that to be the case.
Chris Leslie
Not in the short time that I have available. I prefer to hear the Minister and to deal with particular issues, some of them raised by a number of hon. Members. For example, the hon. Member for Cities of London and Westminster (Mark Field) discussed bond yields and the dangers of the Government giving the impression that we are a safe haven relative to the rest of the world. I am worried about the complacency shown by the Government. Bond yields are as much a function of our relative independence from the euro and the flexibility of having our own central bank. The director of the National Institute of Economic and Social Research, Jonathan Portes, made it clear recently that our gilt yields declining to an all-time low was partly a result of the economy’s weakness, because safe-haven flows are typically accompanied by a rise in the value of the pound or rising stock prices. He could not have been more concise or clear:
“The reason people are marking down gilt yields is because the economy is weak”.
We should not see that entirely as the be-all and end-all of economic policy. The hon. Gentleman is right that we should see it not merely as a safe-haven function, but as a bubble that may burst at any point.
What should the Government be doing? The crisis is far from over, even though the markets have calmed somewhat this week. My right hon. Friend the Leader of the Opposition rightly pointed out that the European summit—the G20 summit—finished prematurely, without adequately solving the difficulties with the EFSF and the permanent bail-out arrangements, and that a further European summit might be necessary to thrash out the issues properly. We also need a proper strategy for jobs and growth throughout Europe and concrete steps to support demand immediately. We have to end the prevarication about the role of the European Central Bank as lender of last resort and to give proper attention to what it takes to make that EFSF firewall stand behind eurozone members.
Hon. Members mentioned the IMF in some detail. In the summer, before the details of the permanent eurozone bail-out fund had been agreed, the Labour party urged the Government to pause before granting additional funding to the IMF. We called for the commencement of the larger eurozone-only bail-out fund to be brought forward and for the Government to negotiate an end to our liabilities via the temporary EFSM. The Minister at the time did not explain what the UK Government were doing to help to ensure that an adequate and permanent EFSF was put in place and, as I said, the European summits came and went, despite the Prime Minister’s attendance.
Ministers, including the Prime Minister, have repeatedly misrepresented our view of the IMF’s role. Today’s debate shows that our concerns are shared across the party divide. Tim Geithner in the United States and people in many other countries have also voiced their reservations. In principle, because of the IMF’s generally vital role in the global economy, we support an increase in its subscription, but I make no apologies for questioning the Government’s stewardship of our public funds. We have a duty to protect the best interests of the UK taxpayer.
We have consistently said that the IMF’s job is to support individual countries with solvency crises and not to solve a structural problem caused by eurozone countries unable to agree the necessary steps to support and maintain their own monetary union. The IMF does have a role around the world and should have the necessary resources, but there should be no IMF funding to plug the gap in the eurozone’s bail-out fund and to do the job that the ECB should be doing. The only way to ensure market confidence in the eurozone is for the ECB, alongside that permanent bail-out fund, to be given the political support that it needs to act as lender of last resort when liquidity problems arise. That is the logic of monetary union that the 17 eurozone countries are signed up to.
I want to hear the Minister’s answers, so I will curtail my remarks. It is vital for the Government to wake up and realise the role that a growth strategy must play in Europe and in the UK. Without that, there could be serious ramifications for the UK and our economy. If the Government fail to act as an honest broker, stepping up to show the leadership that many hon. Members have urged in today’s debate and so that the ECB becomes lender of last resort and that the EFSF has enough weight to become an effective firewall, the eurozone crisis may well deepen further. The Chancellor continuing to talk about Britain as a safe haven betrays a relaxed complacency in the Treasury that is not warranted. Such an approach is misinformed, neglectful and very dangerous in the situation that we face.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate.
Let me be absolutely clear: it is in our vital national interest that eurozone states reach a coherent, comprehensive and lasting solution. First and foremost, they must implement the agreement reached towards the end of October, which involves a three-pronged strategy to recapitalise the European banks, resolve the situation regarding Greek debt and reinforce the EFSF to create a firewall between Greece and other vulnerable euro area countries. The new Governments in Greece and Italy need to show that they can implement the tough measures required to deal with their debts and make their economies more competitive. Uncertainty in the eurozone is undermining not just their economies, but ours. A return to stability in the eurozone will benefit our economy, whereas continued uncertainty will harm it. My hon. Friends the Members for Cities of London and Westminster (Mark Field) and for Wimbledon (Stephen Hammond) made that point.
We have a clear interest in greater certainty in the eurozone, but at no point have we committed, or will we commit, any British taxpayers’ money to a special purpose vehicle, or through the EFSF or the ESM, either directly or through the EU budget.
Mr Baron
If I may be so bold, the Financial Secretary is coming up with the economic clap-trap that we must all save the euro. Does he accept that binding divergent economies into a single currency without fiscal union was and remains a massive mistake? It is as simple as that. The world will not fall apart if the euro breaks up, and countries such as Norway and Switzerland have proved that by trading with the eurozone using their own currencies.
Mr Hoban
My hon. Friend is absolutely right, which is why we did not join the euro in the first place. The remorseless logic of monetary union, as he said in his speech, is fiscal union. Fiscal union is necessary for monetary union to work. That is what we are seeing throughout the globe, and that is why we said that eurozone members must make greater progress towards fiscal union.
Mr Hoban
As I have said, uncertainty and problems in the eurozone have a damaging impact on the UK economy and have a chain effect on what is happening here in the UK. It is not in our economic interest for that to continue. Just last week, John Cridland, director-general of the CBI, commented on the negative impact that the problems in the eurozone are having on the UK economy. We are an open economy and our European partners are our largest trading partner, so it is in our interest to ensure that the eurozone works. That will be of huge benefit to the UK economy.
Mr Hoban
I would like to make some progress. Let me address UK commitments through the IMF, which is the centrepiece of this debate. In a carefully worded statement, the hon. Member for Nottingham East (Chris Leslie) covered Labour’s retreat on its IMF policy. He was bravely leading his troops through the No Lobby in July without the support of the architects of the G20 London deal. The former Prime Minister and the former Chancellor were not there. What has happened? Last week, his boss, the shadow Chancellor, cut his legs from under him by saying that
“the Labour party supports an increase in the UK’s International Monetary Fund subscription”.
I do not think the hon. Gentleman is in a position to lecture anyone about consistency and principle.
As a founding and permanent member of the IMF, and as one of its largest shareholders, we continue to be a strong supporter of its role as a global backstop to the world economy. Currently, 53 countries are being supported by the IMF, of which only three—Greece, Ireland and Portugal—are in the euro area.
Mr Hoban
Let me continue. As a founding member of the IMF, we recognise its important role in stabilising the global economy in times such as this. That is why we participated on the nine previous occasions when its quota was increased. In these turbulent times, it is essential for confidence and economic stability that the IMF has the necessary resources, and there may well be a case for further increases. At the G20 two weekends ago, Britain, the US, China and all the other countries round the table made it clear that in principle we are willing to have an increase in IMF resources to boost global confidence. We stand ready to contribute within limits agreed by the House and set out in the International Monetary Fund Act 1979. That limit, denominated in the IMF’s units of account—special drawing rights—stands at 38.8 billion SDRs, or about £38.3 billion pounds.
Let me remind the House that no one who has lent money to the IMF has ever lost that money. The money goes directly to the IMF and not to individual countries. It is one of the most creditworthy institutions in the world, and its loans are afforded preferred creditor status, which means that they are first in line to be repaid, even if not all other creditors are paid. Consequently, no country has ever lost money as a consequence of lending to it.
There has been no agreement about the timing, extent or exact method through which IMF resources will be increased, but an immediate need is to implement existing plans to increase its resources. Let me make clear how IMF resources will be used. Any increase must be available to all its members and not reserved for use only by the euro area. There can be no hypothecation, and money is lent to the IMF, not to specific countries.
The use of IMF resources is linked to the question of the need for economic reform. All hon. Members recognise the need for the euro area to reach a comprehensive resolution to the crisis, and clearly it is for the euro area to resolve that crisis. That resolution cannot be simply through recapitalisation of banks, the creation of a euro area bail-out fund or resolving the problems in Greece.
Mr Hoban
Perhaps my hon. Friend will be patient. There are areas where the eurozone needs to tackle its competitiveness to respond to those issues. There is the question whether IMF money is conditional on structural reform to improve competitiveness. The answer is yes, because conditions are built into IMF programmes to ensure that competitiveness changes take place. Portugal, for example, has an extensive programme of privatisation, and the Portuguese Government’s right to be involved in private companies must be abolished. In Ireland, legislation has been passed to increase the state pension age to provide a significant boost to long-term fiscal stability. In Greece, the Government are discussing breaking the link between the national minimum wage and the annual inflation rate, and market reform is being promoted to allow businesses to set wages independently of collective agreements.
Mr Hoban
Let me continue. I have only three minutes left, and I want to ensure that I address as many of my hon. Friends’ questions as possible.
We are seeing structural reform to improve the competitiveness of economies hand in hand with IMF programmes. I hope that that will reassure my hon. Friends that reform is taking place in those countries to ensure that they meet their international obligations.
Mr Baron
Returning to a previous point, I suggest that the reason why the eurozone crisis is causing a bit of a problem over here is that existing policy is making the situation worse. Denying devaluation is forcing greater austerity packages on populations that are already trying to pare down their debt. That is the problem that the Government do not see.
May I take my hon. Friend back to devaluation? The Government make great play of the fact that only three of the 53 packages go to the eurozone. Can he name one programme outside the eurozone where a country cannot devalue?
Mr Hoban
My hon. Friend seems to believe that devaluation is necessary to restore economic growth. That is not the case. Ireland is a country that cannot devalue, but a consequence of how it implemented its reform programmes is that in quarter 2 growth increased by 1.6%, with a 2.3% increase year on year. That demonstrates that devaluation is not necessary to improve a country’s competitive position, for it to earn its way out of problems or for it to grow. Devaluation may make life easier, but it is not impossible for an economy to grow, even if currency devaluation is not possible. In September, the troika concluded that the programme is on track and remains well financed. In Ireland, the authorities are implementing a programme policy.
In the euro area, we are seeing programmes to restore competitiveness, but those reforms must be made throughout the eurozone, if the eurozone is to strengthen and help to underpin economic growth in the UK. No request has been received as yet for additional resources from the IMF, but the role that it can play in underpinning global economic stability is important, and this is an opportunity that the UK should consider if we are to resolve some of the problems in the wider global economy, tackle the fragility and, by definition, improve stability in the UK.
Bletchley-Oxford Rail Link
(12 years, 11 months ago)
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Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to serve under your chairmanship for what I believe is the first time, Mr Caton. I am delighted to have this opportunity to help to promote the case for reopening the east-west railway line, which would link Reading, High Wycombe and the rest of the Thames valley with Oxford, Bicester, Aylesbury, Bletchley, Milton Keynes, Bedford and destinations further east.
The campaign is run by the East-West Rail Consortium, which is a partnership of local authorities, the South East Midlands local enterprise partnership, rail operators and Network Rail. The ambition is to have the western section included in the next control period—CP5—and HLOS, the high-level output specification, from 2014. I am in the process of establishing an all-party group to help to promote this campaign.
The east-west railway has the informal and slightly romantic name of the Varsity line, linking as it does Oxford and Cambridge, although the extent of the route is much greater than that, particularly the link to Aylesbury. My comments today will primarily focus on the western end of the east-west rail link. I should make it clear that many, including my hon. Friend the Member for Cambridge (Dr Huppert), regard this section as a vital first step to opening the eastern end of the line between Bedford and Cambridge, and from there linking into the existing rail network serving Cambridgeshire, Norfolk and Suffolk.
Mr Andrew Smith (Oxford East) (Lab)
I congratulate the hon. Gentleman on securing this important debate and on his establishment of the all-party group. As he has mentioned the other place, I want to get in early and mention Oxford and how strong the support is for this initiative across political parties, both in Oxford and in the wider Oxfordshire county. The cost-benefit ratio is, of course, particularly good.
Iain Stewart
There is indeed widespread support along the line of the route and across parties. I was about to mention that this is not a new campaign. A former constituent of mine, a Mr Chris Wright, e-mailed me at the weekend to say that this year marks the silver anniversary of his involvement in the campaign to reopen the line.
By way of background, the line was built in phases between 1846 and 1862. The first attempt to close the line was made in 1959, but a local campaign opposed the closure. It did not even feature in the Beeching plans in the 1960s. It was only when fast trains were introduced between London and Cambridge and London and Oxford in the ’60s that patronage fell away to such an extent that it was quicker for people to travel into London and back out again rather than make the cross-country journey. British Rail withdrew passenger services, except of course for the section between Bletchley and Bedford, which remains in operation today. Even though passenger services were withdrawn, the line remained in operation for many years and was used for a variety of purposes, including freight services and for diversionary passenger services when the main line was undergoing engineering work.
In 1993, the section between Bletchley and Calvert Junction was mothballed, although much of the track bed remains and, thankfully, none of the line has been built on. Much of the route is already back in use. In 1987, British Rail reopened the Oxford to Bicester Town section. The Chiltern Railways Evergreen 3 project, subject to the Secretary of State’s decision on the recent public inquiry, plans to upgrade the line and build a new chord, which would see fast passenger trains from London to Oxford via Bicester and High Wycombe.
Chiltern Railways services have also been extended north of Aylesbury to the new Aylesbury Vale Parkway station, which has been built to service new housing development in the north of that town. The section between Aylesbury and Bicester remains open for freight purposes, so the line needs to be upgraded only for passenger services. My right hon. Friend the Member for Aylesbury (Mr Lidington) is a strong champion of the restoration of this passenger service.
John Howell (Henley) (Con)
The historical perspective is useful and my hon. Friend is setting it out clearly. There is enormous support for this project including from, for example, Oxfordshire county council. A wide spectrum of organisations now supports it, and it will bring enormous benefits for people in my constituency who are within striking distance of Islip station.
Iain Stewart
I am grateful to my hon. Friend who illustrates the widespread support for this project. It cuts across both the public and private sector. I will come on to some of the benefits that I believe restoring this link will provide.
Ian Paisley (North Antrim) (DUP)
The hon. Gentleman has outlined a history of the railway being in and out of fashion, and then back in again because demand renews as population shifts. That is very telling, because it seems to be the history of our rail system. Indeed, it is similar to what has happened in Northern Ireland. Does he believe that one of the benefits of rail is to stimulate the local economy and that that is the best way to get the economic growth that we so desire?
Iain Stewart
I am relieved that the hon. Gentleman is not calling for the line to be extended via a new tunnel under the Irish sea to Ballymena, which might be a little too ambitious. Nevertheless, he has made an important point. The country made a strategic mistake by closing so many railway lines in the ’60s, which we are now painfully and expensively trying to rectify. I will come on to the economic benefits that he has mentioned.
George Freeman (Mid Norfolk) (Con)
I congratulate my hon. Friend on raising this topic. On the role of rail in promoting economic growth, I want to put a word in for extending the innovation corridor across East Anglia to Norwich. I speak partly on behalf of the Economic Secretary, who cannot be here today. If we look at the story of the Cambridge phenomenon, one of the single biggest contributors was investment in the Norwich-Cambridge railway line and the non-stop connection. If we want to rebalance the economy, we should consider the eastern region’s strengths in cleantech, biotech and life sciences. Extending the Oxford-Cambridge-Norwich corridor would play a key part in unlocking our global potential.
Iain Stewart
My hon. Friend makes an excellent point. I see this line as creating an arc of technology and new industry, which would be hugely beneficial to the economy. As I have said, I will come on to that in a moment.
There is another piece of the jigsaw. In 2008, Milton Keynes Central station was remodelled to enable it to incorporate east-west trains. This project is not about a new railway line; it is about reinstating, upgrading and integrating sections of railway line that already exist. As I shall come on to in a moment, that can be done for a comparatively small capital investment, and the project enjoys a benefit-cost ratio of more than 6:1.
Turning to the benefits, the east-west rail link is good for business and economic growth, good for the environment and good for the nation’s wider strategic transport aspirations. At a time when everyone is shouting for more growth in the economy, this project would provide a rail link to an economic corridor that is at the cutting edge of the UK’s economy. It would, for example, link Reading at the heart of the Thames valley, Science Vale UK with its world-leading research and development facilities, Oxford with its academic and tourism economy, Eco Bicester, which is one of the four eco-towns in the country, and my home area of Milton Keynes, which is a fast-growing new city with a dynamic economy. As my hon. Friend the Member for Mid Norfolk (George Freeman) has just pointed out, it would link with Cambridge, East Anglia and all the important economic sectors.
Peter Aldous (Waveney) (Con)
Does my hon. Friend agree that the proposal would play a valuable role in getting freight from the east coast ports across the country without needing to go into London? It would also provide another way for passengers to travel without using the over-congested Great Eastern line from Norwich to Liverpool street.
Iain Stewart
My hon. Friend makes an important point. My comments are primarily about passenger services, but the freight side is equally valuable in putting together the strategic network for the country.
This area’s economic strengths lie in key growth sectors for the future, such as high-value-added, science-based research and development, precision engineering and, especially, automotive engineering—Red Bull Formula 1 is located in my constituency and won this year’s constructors’ championship—pharmaceutical and life science research and development, green technology and low-carbon services and products. All those things are attractive to inward investment, and I believe that a fast, reliable public transport corridor that links them together and to the rest of the United Kingdom, as well as to the population centres from which they will draw their work force, will help to generate up to 12,000 new jobs.
Ben Gummer (Ipswich) (Con)
I congratulate my hon. Friend on bringing this important matter before the House and the Minister. The largest software development centre in Europe is just outside Ipswich, and it would be a great help to link that to other centres of excellence at Cambridge and Oxford. The line between Felixstowe, Ipswich and Cambridge has already been built, and it will be improved thanks to this Government’s investment.
Iain Stewart
I am grateful for that intervention, which again illustrates the arc of economic growth that runs from east to west. The western section of the line will be instrumental in opening up the second phase of development eastwards.
Richard Fuller (Bedford) (Con)
I, too, congratulate my hon. Friend on securing the debate; the Minister must be impressed to see a rail project that has such widespread, extensive and popular support, let alone with the economic benefits that have been outlined. Does my hon. Friend believe that such a project would also help with areas of economic deprivation? My constituency has seen levels of unemployment that are above the national average. Too often such issues are thought to affect other parts of the country and are sometimes overlooked in the eastern area.
Iain Stewart
My hon. Friend makes a valuable point. The south-east is assumed to be uniformly wealthy, but that is not the case. My constituency also contains pockets of deprivation, and this project will stimulate overall economic activity and benefit all areas.
A key benefit of this project would be a reduction in journey times, leading to a modal shift in our methods of transportation. The proposed rail link would result in a significant reduction in journey times from east to west. Road transport is a nightmare along that corridor, particularly in the key middle section of the line. I often have to drive west from Milton Keynes along the A421 trunk road between Bletchley and Buckingham and the A4421 from Buckingham to Bicester. Both roads are single carriageways, and they are so congested that it is difficult to predict journey times with any accuracy.
The time savings will be transformational. For example, a car journey between Milton Keynes and Oxford, which can take up to an hour and a half, would be replaced by a 40-minute train journey. The journey from Oxford to Bedford would reduce from over two hours by car to one hour by train. The east-west rail line would also open up a new direct rail link from Milton Keynes to Aylesbury and the rest of the Chiltern Railways network to and from London Marylebone. It would help to achieve a modal shift from car to rail, with all the environmental benefits that that entails.
Hon. Friends have raised the issue of wider connectivity and freight, and the east-west rail line would provide much better links with the UK national rail network. It would join up the Great Western line, the west coast main line and the midland main line, which in time would be followed by the east coast main line and the network in East Anglia.
The potential for wider rail services—passenger and freight—to use that corridor is significant, both for scheduling new longer distance services in the future, and for providing a north-south relief route should engineering work be planned on one of the main lines. Such a link would be a valuable piece of the UK’s strategic railway jigsaw, and indirectly it would also relieve some of the pressure on London, which is a point raised by my hon. Friend the Member for Waveney (Peter Aldous). Many people find it easier and quicker to travel into London and go back out, rather than travel across country.
I hesitate to raise this issue, given its controversial nature in the rest of Buckinghamshire, but the east-west rail link would intersect with the proposed route of High Speed 2—the Minister and her colleagues will be glad to hear that I do not intend to enter into the pros and cons of HS2, because there will be plenty of time for that in the weeks and months ahead. Nevertheless, such an intersection would open up the possibility of a parkway station. If HS2 proceeds along the planned route, I would like to see the business case for a parkway station properly assessed in the context of the Y-network, and connections to Heathrow and High Speed 1. More than 500,000 people would live within 30 or 40 minutes’ rail journey from a parkway station, which might significantly augment the business case for HS2. It would also go some way to answering the justifiable objections of people in Buckinghamshire who claim that they will endure the pain of HS2 but receive no gain. That, however, is a side issue, and the case for the east-west rail link stands independently from that for HS2.
All in all, the east-west rail project could generate an additional 2.5 million rail trips annually, and result in nearly 1.5 million fewer car journeys. It has the potential for an annual uplift in regional gross domestic product of £38.1 million and could generate additional annual tax revenues of £17.1 million. All those benefits could be secured for a relatively modest capital investment of £250 million, which, when put in the context of the £33 billion needed for HS2, seems a comparatively small sum. If 100% publicly funded, the project has a benefit-cost ratio of 6.3:l, and the ratio is 11.2:1 if there is a private sector contribution. Again, that compares favourably with the benefit-cost ratio for HS2 of about 2.6:1.
Much work is being undertaken by the consortium to realise private sector investment in the east-west rail project. After five and a half years, a positive income stream would be generated through the fare box and no ongoing public subsidy would be required. Last July, Oxford Economics was commissioned by the consortium to provide an independent assessment and review of the east-west rail link, and it concluded that there is a strong business case for the project to go ahead.
Through local enterprise partnerships, the consortium is developing a funding package to enable the delivery of the scheme via both the public and the private sectors. One key source of funding will be the HLOS for CP5, which is unique in that it is being promoted by a non-rail-industry entity. Consequently, it has not yet appeared in the initial industry plan for CP5, but nobody should take that as a sign that it is not a viable project. I believe that the east-west rail project is a no-brainer and that with a fair wind trains could be running by 2017. If the Government are looking to fast-track infrastructure projects that will deliver growth and jobs, may I gently suggest that the east-west rail project could easily be brought forward and that trains could be running by the end of this Parliament?
I conclude by paying tribute to Patrick O’Sullivan, the consortium’s project manager from Jacobs Engineering UK, and all those involved with the East West Rail Consortium, together with those who have campaigned to restore the rail link for many years. I am extremely grateful to have had this opportunity to present the case for the east-west rail link, and I hope that I have persuaded my right hon. Friend the Minister of its merits.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
It is a pleasure to serve under your chairmanship, Mr Caton, and I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on securing the debate. I welcome the opportunity to consider the merits of the east-west rail proposal, and I welcome the strong attendance from MPs who support the project.
Like those of my hon. Friend, my remarks will focus on the western section of the project—the part most developed—although I may touch briefly on the central section if time permits. He has outlined with great clarity the potential benefits of reopening the line along the western section, and described the boost to economic growth that he believes it would bring, as well as the improvements in journey times, the potential for a modal shift in transportation and, not least, the potential boost to high-tech industries.
I was very impressed by my hon. Friend’s contribution, and I was equally impressed by the presentation I received on this project last year, when my hon. Friend, together with my hon. Friend the Member for Milton Keynes North (Mark Lancaster), brought the chairman of the East West Rail Consortium to see me. At that useful meeting I agreed that the Department for Transport would work with the consortium in developing its plans, and that work has since progressed.
The Department has started evaluating the consortium’s plans and forecasts as we prepare the high-level output specification that will set out the Government’s requirements for rail control period 5 from 2014 to 2019. We will consider seriously whether we can provide funding to support the east-west rail project as part of CP5. We have heard today from hon. Members on both sides of the Chamber about the impressive value-for-money case that it seems can be established for the project. However, value for money on its own is not enough. We also need to consider affordability. There is no doubt that this is a very substantial scheme. Whether it proves affordable depends on the extent of alternative sources of funding available to support the project. It also depends on how the benefits of delivering the project compare with competing priorities for CP5—for example, the northern hub or other proposals to improve connections between our northern cities.
As my hon. Friend the Member for Milton Keynes South said, east-west rail is not in the initial industry plan put forward by the rail industry for CP5, but I can assure him that this project will be considered just as seriously as the proposals that are in the industry plan. It is worth noting that the industry plan does make provision for east-west rail, notably in relation to Network Rail’s proposals for Oxford station. I can also happily inform my hon. Friend that the Association of Train Operating Companies is providing expert advice to the Department on the best-value long-distance passenger services that might use the route if it goes ahead. That is assisting our evaluation of the project and could enhance the value-for-money case for east-west rail.
I have been very impressed by the work of the consortium as well as the supportive MPs. The collaboration of the 20-plus local authorities in the consortium provides a good example for others to follow in building a broad local consensus for an ambitious vision of new rail infrastructure to support economic growth and, potentially, housing growth.
Richard Fuller
Will my right hon. Friend deal with an issue that is gaining currency for some of us who represent constituencies in the eastern area and in the south-east? Government investment priorities sometimes overlook the fact that there are significant areas of deprivation in the south-east. There is a tendency to favour projects in other parts of the country. This project is not only vital to economic growth, as has been mentioned. It is also of value in restoring opportunities for job creation in areas and pockets of significant deprivation. Will she deal with that issue?
Mrs Villiers
Certainly I will. My hon. Friend the Member for Pudsey (Stuart Andrew), who is sitting beside my hon. Friend the Member for Bedford (Richard Fuller), often berates me for not committing sufficient funding to rail infrastructure outside the south-east. The reality is that the Government must consider carefully where taxpayer funding will deliver the greatest economic benefits. Whether we are talking about deprivation in the south-east or in the north, that is a crucial issue that we need to consider to take the difficult decisions on where to prioritise funding. We do not at all assume that everywhere in the south-east is prosperous. We know that improving our transport infrastructure in both the south and the north can deliver major benefits in quality of life, jobs and growth. That is why we are seeking to roll out a major programme of investment that helps the whole country.
The consortium has funded much of the cost of its work on the project to date, steadily developing its plans so that they stand on an equal footing with projects being proposed by the rail industry nationally in the IIP. The consortium has also explored ways for local authorities to use the forecast economic growth to fund part of the building costs if the project gets the go-ahead. That could make the project much more affordable, as we have heard. If we can agree to provide some funding for east-west rail as part of CP5, we may look to the consortium to make good on those local contributions on which it has been working so hard.
Ben Gummer
Certainly many of us will welcome the tone of the Minister’s statement, which is exciting. In the mix is the Greater Anglia franchise, which I know she is working on and which will start in 2014. A component of that will be infrastructure improvements. As much of this line falls within that franchise area, I wonder whether it would be possible to draw within the franchise a need for the new holder to invest in it as part of the franchise.
Mrs Villiers
Time constraints prevent me from going into the detail of what might be included in CP5 for the Greater Anglia area, but I am well aware of my hon. Friend’s campaign to improve the infrastructure there. That will be considered very seriously as part of both the HLOS process and the refranchising process.
Different ways of delivering the project have been carefully assessed by the consortium, with each one being tested for efficiency. I welcome, for example, its work on finding a lower-cost approach to planning consents, with a mix of permitted development rights and local authority planning permission.
The Government are already working on projects that could benefit the east-west rail corridor. As my hon. Friend the Member for Milton Keynes South said, the route between Oxford and Bicester Town, as well as being part of the east-west rail project, is being upgraded under the Chiltern Evergreen 3 programme. That will deliver new train services between Oxford and London Marylebone by 2014. Our agreement with Chiltern Railways includes funding the cost of strengthening the bridges and improving the tunnel, which will ensure that that section is capable of accommodating possible traffic resulting from east-west rail. Chiltern has planned its improvements so that the section is ready for a further upgrade of track and signals. Again, if east-west rail happens, that will be necessary.
My hon. Friend was brave enough to mention HS2. If HS2 goes ahead along the preferred route put forward for consultation, that could co-exist with east-west rail; there would be some synergies, potentially. The preferred route for HS2 would run parallel to east-west rail, between Quainton and Claydon. The operation of HS2 could free up busy parts of the west coast main line, including Milton Keynes, enabling new regional and local services to be run. That could improve the business case for east-west rail by providing space for more long-distance connecting journeys.
On my hon. Friend’s proposal for an HS2 station, I can assure him that we are considering with great care all the consultation responses, including all those that have proposed new stations. He proposed that we should fast-track east-west rail and deliver it by the end of the Parliament. I see that as quite an ambitious goal, but I will take it on board in discussions in the run-up to the growth review.
I think that the consortium is right to concentrate on the western section of the route. The case for reinstating the central section between Bedford and Cambridge is less developed. However, it is generally accepted that if the western section gets the go-ahead, that will be the time for more substantial work to see whether we cannot take forward the rest of the project at some future point.
The railways are experiencing a renaissance in 21st-century Britain. More people are travelling by train than at any time since the 1920s. Despite a deficit as serious as any in our peacetime history, we are undertaking the biggest programme of rail upgrades since the Victorian era. In the days before privatisation, projects on the scale of east-west rail to reopen lines closed years previously would have been scarcely conceivable. Now, they are not just conceivable, but credible and even realistic. However, despite—
Mrs Villiers
I am about to run out of time. Despite the strength of the business case, there is no doubt that a very large amount of investment—about £250 million—is required to rebuild the route, and the expanded train services would probably require extra subsidy in the early years of operation. Ultimate success will therefore depend on a continued focus on getting costs down and bringing in additional funding sources. It will also depend on what is affordable, taking on board competing priorities for CP5. This debate has provided a very welcome opportunity to consider those issues and is a valuable contribution to the preparation for the HLOS statement and the Government’s decisions on what it will be possible to fund in the CP5 period.
Mr Andrew Smith
Before the Minister concludes, will she give way? There is still time remaining.
Mrs Villiers
We are continuing to assess this. The HLOS statement will be published in the summer. I think that the latest deadline for that is July, but we have not set a specific date for publication. In the meantime, we will continue to work on this project, alongside the consortium, and as and when there is an announcement to be made or progress to be announced, I will ensure that the right hon. Gentleman is the first to hear about it.
Aviation Industry
(12 years, 11 months ago)
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Mr Brian H. Donohoe (Central Ayrshire) (Lab)
It is good to see you, Mr Gale, in the Chair. You and I, of course, have something in common, in that you used to serve, while I still do, in the British Transport police as a special constable. You will know something about transport, and I presume that I, too, know something about it.
It is good to have secured a debate on an important matter this afternoon and to see so many Members, under a one-line Whip, here to support me, presumably, on the importance of aviation. It is also good to see the Minister in her place, and the shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), in hers this afternoon—unusual, it has to be said, for an Adjournment debate. I think that that shows the importance of this afternoon’s subject.
My mind was taken away from the subject at the weekend because young Rosie Donohoe, my first grandchild, was brought into this world at 2.45 pm on Saturday. Rosie and her mother Lisa, and her father Graeme, are well.
Mr Donohoe
I thank hon. Members.
I return to this afternoon’s important subject, which is the future of the UK aviation industry. The aviation sector is vital for the economy, bringing financial benefits both to the UK and to those who serve the airline business. It is also important for the skills and the high-skilled employment that it brings and because of the important growing marketplace that the airline industry is within.
Coupled with that is the importance of the aerospace industry, which is connected to the airline industry in every respect. I have such an interest in the subject because a fairly sizeable chunk of employment in my constituency is based on those two industries. Spirit, which employs more than 1,000 people, is based in my constituency. Goodrich, GE Caledonian and BAE Systems are just a few of the companies that my constituency has within the sector. All are major stakeholders in the future of the aviation industry.
The aviation industry requires the Government to step up their responsibilities to provide a political framework to allow the sector to grow sustainably, integrated with other transport modes, which are equally important. We were involved in a few discussions just a number of weeks ago, and I see the hon. Member for Blackpool South—
Mr Donohoe
Sorry; I will always get that wrong. I see the hon. Member for Blackpool North and Cleveleys (Paul Maynard) in his place this afternoon. He has taken the lead on the case regarding High Speed 2, which is part of the overall package that we have to consider today.
More than any other industry, aviation operates in a global marketplace and needs global solutions to avoid market distortions that would prejudice against UK industry. In that respect, it would be dangerous for the UK to add or continue with unilateral actions that would serve only further to drive UK industries abroad, along with the financial and skills benefits they are associated with.
About 15,000 jobs a year are at stake unless the UK finds way to increase aviation capacity in the south-east. The management at Gatwick airport has argued in a submission to the Department for Transport that that is of great importance to its airport, as well as to the whole country. The UK stands to lose between £20 billion and £47 billion of benefits over 30 to 50 years unless the Government reconsider the current stance of no expansion.
Iain Stewart (Milton Keynes South) (Con)
I congratulate the hon. Gentleman and his family on the safe arrival of Rosie. He mentions airport capacity in the south-east. With the advent of a high-speed rail network, which he also mentioned, what is termed the south-east could be expanded to include airports such as Birmingham, which has considerable spare capacity. Should we not look at the whole of the southern part of the United Kingdom, rather than just what is narrowly defined as the south-east?
Mr Donohoe
I will return to that point, because I have included in my speech the effect of that and the question of the whole package.
Mary Macleod (Brentford and Isleworth) (Con)
The hon. Gentleman talked about the need for additional capacity. Does he agree that London—he is talking about the south-east—remains the best connected city in the world, with more than 130 million passengers, which is more than many other great cities?
Mr Donohoe
I will come on to that as well; I have a speech that I would like to continue with. Last month, another runway was opened in Frankfurt, which will impact more and more on the position of the UK aviation industry.
The lack of hub capacity could cost the economy right now some £1.2 billion a year in lost trade. The CBI and other organisations, such as the Institute of Directors, say that that must be tackled if the UK is to maintain its global competitiveness, and I support them.
The coalition reversed the previous Government’s plans to build a third runway at Heathrow and, as I understand it, oppose the building of new runways at Stansted or Gatwick, which runs at 78% capacity. The coalition has said that it will produce a new aviation framework by 2013, but we need to bring that forward. It is clear that unless we do so, we will lose business.
As a reminder, the UK is the sixth biggest economy in the world. The world is becoming increasingly interconnected, and its centre of economic gravity is moving further east, but the UK does not have a cohesive aviation policy. The coalition has allowed us to fall far behind. Frankfurt opened its fourth runway just last month. France’s Charles de Gaulle already has four runways, and Schiphol, which is becoming more and more of a direct competition, now has six. We therefore have to think about where we are going in the future. Is it important for us to continue having a hub airport in the first place? One wonders whether that should be the way forward.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I hope I can reassure the hon. Gentleman. Will he welcome the fact that passenger numbers at Heathrow have reached record levels over recent months? I recognise the crucial importance of Heathrow airport, which is why the Government have arranged a programme to ensure that Heathrow is improved and works better, with reforms to security and other measures, which I will talk about in my speech.
Mr Donohoe
It would be wrong not to. Indeed, there is the possibility of further expanding the number of take-offs and landings by increasing the number of mixed-mode operations, which I understand are still being operated at Heathrow. That will allow it to expand further. The problem with that is all the environmental issues will start to create a real problem, because the noise in the air would become far greater than the noise today. Given the size of Heathrow, there is a clear argument, as the industry and all whom I know have been making for some considerable time, for further expansion through a third runway.
Mrs Villiers
I am afraid that in this instance I may have to disappoint the hon. Gentleman. The trial that is under way at Heathrow is not mixed mode, but a series of operational freedoms geared at improving resilience and tackling and mitigating delays. Those freedoms are substantially different from mixed mode because we are great supporters of runway alternation.
Mr Donohoe
I will always be corrected by the Minister in that respect. Under the previous Government, there was a trial period of mixed mode. I understood that the only way we could increase the number of passengers going through the airport was if we brought mixed mode into operation. I do not think I will be proven wrong in that respect.
Graham Stringer (Blackley and Broughton) (Lab)
Does my hon. Friend not agree that the number of passengers going through Heathrow is only one measure of its economic importance? If we look at the destinations served by Heathrow in its constrained state, we see that it is losing out in many of the emerging economies such as China, Brazil, Malaysia, India and Russia, and that is where the damage to the UK economy is being done.
Mr Donohoe
I could not have put it better. My hon. Friend will be speaking in this debate and will no doubt reinforce that point. It is clear that that is the situation.
Mr Donohoe
I want to make some progress because I know that there are a number of hon. Members who wish to speak. To give way again will impact on that wish, so I will, if I may, move on.
The London Mayor believes that London will become a destination on the end of a branch line unless a new international airport in the Thames Estuary is built. Quite a lot of work would have to be done for me and many in the industry to be convinced of the practicality of such an airport. It is fine putting concrete on the ground, but difficulties emerge when it comes to airspace. The situation in the south-east is among the most complex in the world. Such consideration is vital in assessing the needs of an estuary airport, as there are major structural airspace implications. Of course, we could carry out such work; we have never argued that we could not. However, the scale of the airspace structural change necessary to accommodate the proposal would be enormous and should never be underestimated.
In NATS’ expert view, a four-runway estuary airport could not operate in tandem with Heathrow if Heathrow were to remain the same size as it is today. Such an airport would need to be a replacement for Heathrow. There would be significant implications for other airports in the region, most notably for City airport, which I use weekly, Southend, Stansted and Biggin Hill. It is not simply a matter of shifting current traffic patterns to the east. The eastern boundary of UK airspace is an important factor. Belgian and Dutch airspace and the proximity of airports such as Schiphol and Brussels mean that climb and descent profiles would be affected, so international co-operation would be required.
With westerly winds in the UK prevailing for 70% of the time, westerly operations may increase departures over central London itself. Refining existing flight paths provides more certainty for people already living below them and would be better than blighting new areas, which is what could happen if Boris’s idea goes forward.
Airspace is a critical pillar of national transport infrastructure, yet it is too often the forgotten factor in the consideration of aviation expansion, particularly airport development. The UK has 11% of Europe’s airspace and 25% of its traffic. We are Europe’s transatlantic gateway, which is a strategically important industry underpinning economic growth.
Airports do not work without the airspace to feed them. The Civil Aviation Authority has set out a blueprint for future airspace strategy, and NATS and BAA are co-chairing a cross-industry group over the next 12 months to work out an implementation plan. A major review of airspace has already been started. It has to assume that the current infrastructure will be in place. This is a once-in-a-generation opportunity, so the Government’s policy framework needs to be able to stand the test of time. Fundamentally, if this opportunity is not to be lost, we need cross-party support, which the shadow Secretary of State has argued for for some time.
We face the possibility of being stacked in the air—it happened to me only yesterday. I believe that that is an inefficient way to operate, but some say that it is an extremely efficient means of maximising limited runway space. None the less, it is not very good for the passenger who is trying to get into London. NATS supports the provision of additional runway capacity in the south-east because that is where the demand is. That sounds like common sense.
Taxation is another important area. When I applied for this debate, I felt that somebody from the Treasury should be here with the Transport Minister. The industry is charged some £7.9 billion in tax. Tax is paid by aviation firms, and employees contribute around £6 billion. There is also the evil air passenger duty, which was introduced by a Labour Government. When it started, we had to pay £5 for short-haul flights and £10 for long-haul flights. Now, if a family of four want to go to Australia, they have to pay more than £700 in duty. I know families who now travel from Glasgow to Frankfurt, Charles de Gaulle or Schiphol. They then take their bags off the plane and get on to another plane to reach their destination just so that they can save themselves that exorbitant tax. We are one of very few countries in Europe to apply such a tax, and the Treasury needs to look at the matter. Without a doubt, we are haemorrhaging passengers who travel, connect and interconnect through Heathrow.
Ian Paisley (North Antrim) (DUP)
I welcome what the hon. Gentleman says about airport duty. Northern Ireland has successfully campaigned for a reduction in its duty and we thank the Government for recognising that. The other issue that I want him to address is the connectivity between the peoples of these islands. Does he agree that we must not sacrifice our internal links for the sake of the more lucrative external links out of the United Kingdom? I am particularly concerned about the potential sale of British Midland International. If it goes ahead, will we see a reduction in internal flights between Northern Ireland and London and between Scotland and London? That is a concern.
Mr Donohoe
I am grateful to the hon. Gentleman for that; I will come on to that matter. Suffice it to say that, only last week, there was an announcement that British Airways was to buy the BMI routes. I predict that those will be the ones that operate between Scotland and England. We have already lost the service from Glasgow. Ryanair’s winter programme is being implemented and there are no flights from Glasgow Prestwick to Stansted. Already we are seeing problems.
As the hon. Gentleman travels in planes as often as I do, he may have experienced similar problems. Any plane that I get on from Glasgow is always full, which shows that there needs to be further expansion in the number of domestic landings in central London. I will come back to that argument a little later.
Returning to APD itself, there is no doubt that that tax was introduced, like most taxes, at a minimal level, but it has become a significant factor in how, and from where, people travel long haul.
In the future, we need to have a joined-up approach on aviation policy and taxation, which of course would involve the Department for Transport and Her Majesty’s Treasury. Such an approach is required to ensure that the tax system and aviation policy are aligned and consistent. Unless they are, we will lose out; of that, there is no doubt. A joined-up approach is absolutely imperative to ensure a sustainable and competitive aviation sector.
Returning to infrastructure development, the Government have adopted an aviation policy that states that there will be no new runway capacity in the south-east, potentially up to 2050. That approach is flawed. As demand increases, there will be a need for new capacity.
Mrs Villiers
Just to reassure the hon. Gentleman, the Government have never said that we have ruled out any capacity expansion in the south-east over that period. What we have said is that the coalition will not give permission for new runways at Heathrow, Gatwick or Stansted. That is not the same as saying that there will be no expansion in the south-east ever, under any circumstances.
Mr Donohoe
I take that point on board, but the Minister is drawing a very fine line in that sense, because I would argue that unless there is an increase in the number of runways, the potential for increasing the service all that much is very limited. I think I would be proven correct by asking the views of those in the industry itself. That is the clear answer I get to the point she is making.
There is no doubt that capacity in the south-east is restricted. As I argued earlier, the south-east is where the need for more air transport services is greatest, yet there is less ability to extract more capacity from the existing infrastructure. Heathrow and Gatwick continue to operate at nearly 100% capacity, even with continuing reductions in domestic services.
Looking to the future, in a global and highly competitive industry such as aviation, any demand management measures implemented by the UK Government would have far-reaching consequences for the economy, jobs and our connectivity with the rest of the world.
Karen Lumley (Redditch) (Con)
Birmingham International airport, which is near my constituency of Redditch, is running at 40% capacity. With High Speed 2 hopefully coming on-stream soon, does the hon. Gentleman agree that that airport could be used to enhance passenger travel?
Mr Donohoe
The difficulty is that passengers will not travel out of London to Birmingham to fly to Schiphol and then fly long haul; the hon. Lady might think that they will, but they will not. The idea that they will do that is just nonsense. What they will do is fly short haul from wherever they happen to be to one of the connections that are readily available in mainland Europe and, it is argued, beyond, rather than doing what she is suggesting. Her suggestion is just not feasible as far as the aviation industry is concerned. In the short term, therefore, methods of leveraging capacity into existing airports need to be agreed, and in the medium term, capacity expansion at regional airports and in the south-east, including a second runway at Gatwick, should be considered.
That brings me to the point made by a Member from over the water in Northern Ireland: the hon. Member for North Antrim (Ian Paisley), who has now left the Chamber. There is the possibility of a further solution to the problem of internal connections within the UK, which is the use of a runway that is already in existence. That runway, of course, is at Northolt, which is only 4 miles from Heathrow. With a bit of realignment, that runway could take on board most of the domestic air traffic that flows into the south-east. That would allow the slots at Heathrow for long-haul flights, which come at a premium, to be relieved and it would allow passengers from the other regions in the UK to connect at Heathrow itself.
I have looked at this idea in some detail. The CAA has argued that it would be difficult to employ Northolt as an airport, but the difficulty is not insurmountable. Indeed, there are those within the industry who argue that Northolt is part of the solution to the capacity problem. I do not know whether the Government have looked at Northolt at all; if they have, it would be very interesting to know the Minister’s view. For me, at almost a stroke the use of Northolt would mean that a third runway at Heathrow could become available, and it could be connected very simply to the main complex at Heathrow. That is a solution that should perhaps be given more thought.
In the long term, of course, the Government themselves have to decide whether the UK needs a hub airport. If they do and they decide that it will not be Heathrow, significant questions need to be asked, including where the hub airport will be located and when, and what criteria will be used to decide its location.
The current situation is unsustainable. The regions will be deprived. We have already heard about what is going on to the routes between Scotland and Heathrow, and between Northern Ireland and Heathrow. That problem will not go away, because airlines will be more inclined to go from Heathrow long haul, allowing for a far greater payload than would ever be the case with any domestic flight. That issue must be looked at.
In the future, we need to look more seriously at what the competition are doing. I have already said that Frankfurt airport has opened another runway, Schiphol airport has six runways and Charles de Gaulle four. Those airports are catching up quickly with Heathrow and their passenger numbers are growing at enormous rates. Their owners must laugh with glee at the stupid situation that we in the UK find ourselves in regarding our own aviation future.
Aviation is a significant contributor to the UK economy and nobody can argue against that. It is a driver of the wider economy, and it has been a great server of the public and a benefit to society. Although aviation can have an adverse impact on the lives of people living around airports and under flight paths, it can also bring many benefits to local and regional economies in inward investment and jobs. The aviation industry is committed to reducing its local and global environmental impact, but airport expansion—where it is required—is an essential tool for the growth of the UK economy.
A successful UK aviation policy requires a joined-up approach by Government that addresses taxation, infrastructure development and sustainability, to ensure that the aviation industry continues to stimulate economic growth and helps to rebalance the UK economy.
As a footnote, I predict that, if there is not an early indication of a change in policy by this Government, British Airways will be off to Madrid airport, which by that time will be run by the owners of BAA, and UK plc will be left miles behind.
Jack Lopresti (Filton and Bradley Stoke) (Con)
It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing today’s debate and, of course, on the new addition to his family.
As we have heard, the UK aviation and aerospace industries are vital to the UK’s economic success. Moreover, based on the criteria set out by the Government to rebalance the economy, they have a vital role to play in delivering growth through manufacturing and exports. That will be the broad thrust of my remarks.
Our country’s aviation endeavours are quite rightly a huge source of pride to many people. Aviation is a sector in which the UK is undoubtedly a world leader. In aviation, British engineering and manufacturing set the standard and still pull in big international orders.
Filton is in my constituency, and is where I live. Most people would agree that it is at the very heart of the UK aviation industry on the manufacturing side. We are fortunate to have an outstanding cluster of aviation and aerospace companies on our doorstep. Airbus, GKN, Rolls-Royce, Boeing and BAE Systems, to name a few of those companies, all have a significant presence in the constituency of Filton and Bradley Stoke and employ thousands of people.
This debate is about the future of the UK aviation industry, but I want to start by recognising the aviation heritage in my local area and how we reached the world-leading standards of today, because only by appreciating and understanding our past will we be able to maximise opportunities, develop a vision for the future and, crucially, inspire the next generation of engineers, scientists and other people who will work in the aviation industry.
Aircraft have been built and flown at Filton since their inception, and we are proud that our aviation roots are well over a century in the making—last year, we commemorated and celebrated 100 years of aviation in Filton. The pioneer and entrepreneur Sir George White, the humbly born son of a Bristol painter and decorator, was the founder of our local industry and, it could be said, the founder and father of British aviation. In 1910, Sir George founded the Bristol Aeroplane Company, and we should all honour and celebrate his legacy, because what he achieved was truly remarkable. He was a pioneer of aviation, a great philanthropist and a completely self-made man. This great Bristolian was the embodiment of social mobility and enterprise, and his example and legacy should be used to inspire the next generation of aviation and aerospace engineers and scientists. Without his vision, we would not have the home of British aviation in Filton, or the thriving UK aviation industry that we have today.
Sadly, BAE Systems has decided to close the airfield in Filton at the end of next year, but that provides us with many opportunities, with room to expand the existing aviation and aerospace industries locally, and plans are close to fruition for an aviation heritage centre, which will house the last complete aircraft built at Filton, Concorde 216, which was the last Concorde ever to fly. The plans importantly include a science, technology, engineering and mathematics learning centre, which will help to inspire children to go to college and university locally.
Perhaps unsurprisingly, there is a concern in the UK aviation industry that the Department for Transport is anti-aviation. I do not subscribe to that view, and I know that the industry appreciates that the concern is more down to airport expansion issues than to anything else, but the fact remains that it is important for our aviation industry’s airline customers that there is an efficient air transportation system in the UK.
Passenger numbers are set to continue to grow, which will help to fuel further growth in the aviation industry. Department for Transport figures show UK terminal passenger numbers increasing to 520 million per annum by 2050, from roughly 210 million in 2010 according to the Civil Aviation Authority. That increase is modest in comparison with that which will be seen globally, not least as a result of the rise of the BRIC economies—those of Brazil, Russia, India and China—and other emerging markets. Airbus’s most recent global market forecast, published in September 2011 and covering 2011-30, foresees the need for more than 26,900 passenger airliners with seating capacities of at least 100, along with more than 900 new factory-built freighter aircraft. In the same time frame, the world’s passenger aircraft inventory will more than double from today’s 15,000 to 31,500 plus.
We should continue to push for further technological improvements and ensure maximum social and economic value for each tonne of CO2 emitted, but the future growth of the aviation industry presents a major opportunity for the UK economy, and it would be unwise to start playing productive sectors of the economy off against each other as we seek solutions to climate change. In a highly competitive global market, adverse regulations that limit a particular sector’s ability to grow domestically are more likely to increase the possibility of a competitor based elsewhere in the world gaining commercial advantage, than effectively to reduce greenhouse gas emissions. I encourage the Government to work through bodies such as the International Civil Aviation Organisation to promote solid and economically sound solutions.
That said, the overwhelming feeling I have picked up from the local aviation companies that I speak to regularly is that the Government are doing a lot of good work to ensure that the UK maintains its position as the world’s second largest aerospace industry, which is an incredible national achievement given the economic conditions and the global competition.
Mary Macleod
Does my hon. Friend agree that this debate should be largely about not how we expand airports such as Heathrow—I do not subscribe to the need to expand them—but about transport across the whole UK, and about looking for creative solutions? The Eurostar is a perfect example, because most of us who travel to Paris or Brussels take it.
Jack Lopresti
My hon. Friend makes a good point. She has worked very hard in campaigning against the expansion of Heathrow airport. I agree that there has to be a more regional dimension to our transport challenges.
I have been asked by the companies that I talk to regularly to pass on their thanks and compliments to the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), on his commitment to the aerospace growth partnership, which he co-chairs. The AGP is an industry and Government partnership aimed at addressing the future needs of the UK aerospace industry, and it will prepare a strategy that embraces technology, manufacturing and supply chain. Such initiatives give the sector confidence in economically uncertain times. By nurturing such relationships and demonstrating the UK Government’s commitment to the sector, we are ensuring that Britain is one of the best places in the world for aviation companies to do business.
The Government sent another strong signal to my local industry by confirming in the strategic defence and security review announcement last year a major order for 22 of the fantastic A400M aircraft, whose wings are manufactured at the Airbus site in Filton. Not only is it a fantastic bit of kit that will provide a much-needed enhanced lift capability for our armed forces, but it will provide us with many export orders. The SDSR also gave us the good news that 14 specially converted Airbus A330 strategic transport and tanker aircraft will replace the ageing TriStar fleets, which will benefit our armed forces and the local and national aviation industry.
The aviation industry holds one of the keys to the economic growth that the UK desperately needs, and the Government are working hard to support the sector and its highly skilled employees. It is the UK’s highly skilled aviation and aerospace work force who contribute so much to the industry’s success, and I ask the Government to continue to do all that they can to support the industry’s employees, especially in these tough economic times. I was very pleased to hear about the Government-backed talent retention solution from the Business Secretary’s skills and jobs retention group. The TRS is designed to help engineers facing redundancy link up with companies with vacancies for highly skilled engineering and aerospace staff, and it is backed by top companies such as BAE Systems, Airbus, Rolls-Royce and GKN.
The aviation industry is an engine of growth for the UK, and we must do all we can to ensure that it is nurtured and protected. From progress on biofuel and research and development programmes to sustainable aviation projects, the UK is a world leader in aviation. As the industry confronts the challenges of operating in an ever-growing and increasingly competitive global marketplace, we must do all we can to help aviation and aerospace companies make the most of the fantastic opportunities that present themselves.
Graham Stringer (Blackley and Broughton) (Lab)
The future of the aviation industry has been hobbled by Government policy, but that future is important, and I hope to explain why in the few minutes available. I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing this debate, which is vital not just to aviation but to the whole UK economy.
Historically, the United Kingdom’s aviation business has been the second largest market in the world, not just in the production of aeroplanes but in the flying of them. We are in danger of losing that position; we almost certainly will. The arguments for constraining runway and airport capacity in the south-east fall down when looked at in detail, as do the solutions, and I will try quickly to go through the reasons why.
Aviation is vital to the economy, not just because airports and aeroplanes—the production of them and the flying of people in them—produce jobs, but because reducing the connections that aviation gives us to the rest of the world is, in essence, like switching off the internet. If someone in the House stood up and said, “We’re going to stop the growth of the internet and communications with the rest of the world,” people would think that that Member had gone off his or her rocker. Effectively, however, that is what we are doing by constraining air capacity in the south-east.
There is only one hub airport in this country, and that is Heathrow. By constraining its runway capacity, we will not necessarily reduce any increase in the number of passengers using it, because operators can use larger aeroplanes on the same runways. However, we will certainly reduce its importance to the economy, because we will reduce the number of destinations it serves. Already, the number of short-haul destinations served by scheduled services from Heathrow is 46, while Amsterdam has 67, Frankfurt 74, Paris 78 and Madrid 63. Heathrow still has more long-haul destinations than those airports, but there is an ecology of short-haul and long-haul routes, and as the number of routes diminishes, so Heathrow’s importance also diminishes. Heathrow already has fewer connections to some of the growing cities in China. As I said in an intervention on my hon. Friend, it has fewer connections to Malaysia and to the BRIC—Brazil, Russia, India, China—economies than its competitor hubs in the rest of Europe, so it is already losing out, and it will lose out further.
It is often said that the regional airports can take the strain, and the hon. Member for Redditch (Karen Lumley), who is no longer in her place, said that people will go to Birmingham. However, all the evidence is that the airlines have no levers to help them to get extra capacity at regional airports, and they have not had any for 20 years. We are going through a recession and economically difficult times, and the loss of traffic at regional airports is about twice the rate at Heathrow. Indeed, the Government’s policies—this also applied to the previous Government—are having a perverse impact, because of the nature of the economies involved. Air passenger duty has a really negative effect on regional airports, and some airlines are choosing to use hubs outside a region because of it. The most recent example that I have come across—there are others—is AirAsia, which was more or less signed up to using Manchester airport, but which is now flying from Kuala Lumpur to Charles de Gaulle. The reason that it gave was simply air passenger duty.
What is true for regional airports, where air passenger duty has a differential impact, is also true for the whole United Kingdom economy—we can do the sums and see the transfers. It is not just that flights are not happening at regional airports, but that operators of flights—particularly tourist flights—from Japan, south-east Asia and the emerging economies are choosing to go to Charles de Gaulle, Frankfurt, Schiphol, Copenhagen and Madrid, rather than Heathrow, because of the extra cost of air passenger duty. As a result, air passenger duty is damaging not only regional airports, but Heathrow itself.
I was pleased by the decision to reduce air passenger duty at Belfast airport. However, if we want to use the capacity at our regional airports, there needs to be a differential between them and the south-east airports. Any differential must help our regional airports, rather than being less than helpful to them, as it is at present. The other way that regional airports could be helped is by building infrastructure. Very few airports in this country have direct links to high-speed trains or good public transport connections. Improving public transport to our regional airports at a cost to the public purse would therefore help in some way.
The biggest push that could be given to our major regional airports, such as Birmingham, Manchester and Glasgow—I do not think this really applies to other regional airports—would come from completely opening up the skies. The previous Government gave regional airports the ability to take flights, with their permission, with fifth freedoms, which meant that those flights could pick up passengers at those airports. That is an advantage, but it would be a much bigger advantage —I imagine this would appeal to a Conservative Government—if we completely opened up the skies around those airports, so that any aeroplane could fly in and out, pick up passengers and take them wherever they wanted. Historically, the only reason why that has not happened is the Government’s over-protectionist position towards British Airways and BAA.
Things can be done to help regional airports that go beyond what is being done at the moment, which is counter-productive. Incidentally, if air passenger duty is such a good idea, why do so few other countries in Europe have it? Only four other countries—Denmark, Norway, Malta and Holland—have it; some have tried it and got rid of it because it is so economically damaging. We have to test these things against what our competitors are doing to find out whether we should have them, and I do not think we should.
It is often said that there are environmental reasons for constraining traffic in the south-east. As my hon. Friend explained, however, when we look at the detail of what happens, it becomes clear that people do not stop flying because of constraints in the south-east system; they use other hubs, and the constraints imposed by air passenger duty reinforce that. Rather than taking a direct flight or using Heathrow, people from Manchester will fly to Schiphol, Copenhagen or wherever and fly onwards because it is cheaper. That saves them air passenger duty and it saves them going into the constrained south-east hub. As a result, there is at least twice the environmental damage, because aeroplanes produce most pollutants—carbon dioxide and other pollutants—when they take off. Someone going to, say, Tokyo may go via Copenhagen. There are not, therefore, good environmental reasons for such a view.
Regional airports are not an alternative, for the reasons that I have given. The former Labour Secretary of State, Lord Adonis, said Boris island was bonkers, and within five minutes of looking at it, we can see that it will never happen—for environmental and planning reasons, and because of the sheer cost and financing involved. When there were fewer environmental issues, it took Munich 25 years to develop a new airport, which opened in 1992. Something as huge as Boris island will simply not happen as an alternative.
I should like to make a number of other points, but other hon. Members want to speak, so I will sit down. There is, however, no real alternative to expanding Heathrow; we certainly cannot use Heathrow and Gatwick as one airport. The Government’s policies are hugely damaging to the aviation industry and the UK economy.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate. I shall try to be quick, because I know other hon. Members want to speak, so this will be high speed, if not on high rail, which will make a nice change.
I welcome the progress that the Government are making on aviation policy. They are taking steps in the right direction. It is not fast enough for me or many in the industry, but perhaps we need to learn patience. Good, evidence-based policy is not one of Jamie’s five-minute meals. It needs good-quality evidence, and if we do not form policy based on evidence, rather than on prejudice, it is plain stupid. I am not here to boost Blackpool airport, although it is a wonderful airport to fly into and see the wonders of the Fylde coast. I do not even want to waffle on about air passenger duty. I do not want to tempt the Minister down a route that she probably does not want to go down, given that she is not a Treasury Minister. I do not even want to bang on about a third runway at Heathrow, because I think that is a stable door that was shut long ago, unfortunately.
We must discuss a more fundamental question: what does UK plc need from our aviation industry? What do we actually need? Hidden, buried away like a nugget of gold within the scoping document, are two fundamental questions that the Government must consider. What are the benefits of maintaining a hub airport in the UK? And how important are transit and transfer passengers to the UK economy? Those things may seem self-evident. How could anyone dispute them? Yet a fortnight ago I met a commercial director for a regional airport, who said, “There is no such thing as a hub airport. There is no Government definition of one, so they don’t exist. So we don’t need a hub airport any more.” That struck me as the most illogical and ludicrous thing one could possibly argue, but none the less he tried. I would prefer to focus on not Boris island but Boryspil airport, which, for those who do not know, is the main airport for the city of Kiev, the capital of Ukraine. That is a classic example of an emerging market destination, which is economically crucial, and to which services from the UK are not sufficiently good. Yet all the aviation policy that we seem to be able to focus on is some future airport in the Thames estuary. We need to focus on the needs of the UK economy—of UK plc—here and now.
I welcome the work that I know the Minister is doing to make Heathrow and the other south-east airports function better, so that we get bang for our buck and extract the maximum from the capacity that we already have. I want London to be surrounded by a string of pearls in the form of excellent, functioning airports. One of them, however, cannot be a pearl but must be a diamond—the hub airport. To understand why, we must understand the definition of a hub airport, and why it matters to the economy. Transfer passengers do not exist merely for the benefit of Starbucks. The Frontier Economics foundation recently issued a report showing that there are at least 13 flights to emerging market destinations in which more than half the passengers are transfer passengers, who did not start their journeys at Heathrow. The more that we squeeze the short-haul flights that the hon. Member for Blackley and Broughton (Graham Stringer) referred to, the harder it will be to sustain flights to emerging market economies, because we will not have the transfer passengers, which is a grave concern.
I confess that a few months ago I wondered whether the UK really needed a hub airport. The Japanese Transport Minister once famously said that Incheon in South Korea was now Japan’s hub. I know that for many of my constituents Schiphol or Charles de Gaulle is essentially their hub airport. I began to think, “Can the UK survive without a hub airport? Can’t we just fly to Paris or Amsterdam?” However, the Frontier Economics report makes the fundamental case why we cannot do that. It is explicit about the amount of trade that we are losing as a consequence of having poorer connectivity with the emerging market economies. It is a question of not only the number of people flying through Heathrow, but where they are going. The hon. Member for Blackley and Broughton rightly made the point that Heathrow’s number of destinations is gradually dropping. In the past five years, it has decreased from, I think, 227 to 180. Over the same five years, the number of destinations reached from the main competitor hubs in Europe has increased.
There is clearly a case to be made that Heathrow is entering a period of consolidation. It may be getting more passengers, but they are going to fewer places, and, in the cycle, that is usually the beginning of the end of an airport’s hub status. That is what happened to New York about 20 years ago, when the destinations started to drop off and it lost its hub status. While I fully expect that in the coming 20 years Heathrow will remain England’s major international gateway, I have concerns whether it will retain its hub status. Hon. Members may ask whether that matters. New York no longer has a hub airport, but it remains a world city. I question whether we—UK plc—can afford to sacrifice the economic benefits that come from a vibrant, well-connected hub airport, which I think is fundamental.
Mary Macleod
Does my hon. Friend realise that London has 92 flights a week to China, whereas Paris has 73 and Frankfurt 69? We have good connectivity with China, one of the most important growing economies. Surely the issue is about working with businesses in China and elsewhere to find out their requirements. Has he had any correspondence with businesses there to find out whether they require additional flights to Heathrow and London?
Paul Maynard
I thank my hon. Friend for that useful intervention. Of course the main reason, historically, for our having far more flights to China is our historic tie to Hong Kong. The destinations that we serve are Beijing and Shanghai, and there are more than 3,000 seats a week going to Hong Kong. I think that Frankfurt serves five destinations and Paris four. We dominate on the Hong Kong routes, but we underperform in relation to all the other top 10 Chinese cities. Of course, economic growth in China is happening not in Hong Kong but in cities that most of us have probably never heard of—the likes of Chengdu and Dongguan, which no one is yet serving. Far more than focusing just on the number of people who are flying and the routes they are flying on, we must think about connectivity. Are we serving the places where the economic growth is?
I make a plea to the Government. I welcome what they are doing to make the airports around London and the south-east more suited to improvements in the passenger experience, but I ask that we should not overlook the benefits that can be provided by an active, well-maintained and well-funded hub airport, which works well and connects to the places that UK plc needs to be connected to for growth. That needs to be a fundamental part of our aviation strategy.
John McDonnell (Hayes and Harlington) (Lab)
I shall be as quick as I can, because others want to speak. This will be the first debate in perhaps two decades when our colleague Alan Keen has not been with us, and I pay tribute to everything that Alan did over the years. On a happier note, I, too, welcome Rosie. Given the interest in aviation shown by my hon. Friend the Member for Central Ayrshire (Mr Donohue) she clearly arrived by stork.
I obviously have an interest in Heathrow, which is in my constituency, because of my constituents who work there, fly out of there and live around it. With reference to those who live around Heathrow, I want to tell BAA and colleagues who are present that the third runway is dead: that is it; it is over; it is finished. All major political parties have made it clear now that it will not be built. As to my hon. Friend’s novel idea about Northolt, this is almost becoming personal now—they are coming at me from all ways. Northolt was ruled out a long time ago because of its impracticality. It would cause just as many problems as expanding Heathrow. I understand the Government’s interest in making Heathrow more efficient, but experimentation around the Cranford agreement, moves towards mixed mode and, certainly, any attempt to increase the number of night flights would be resisted, because of noise and pollution. Nevertheless it is worth examining how we can make Heathrow much more efficient.
Despite everything that has been said by all the major parties, the blight in my constituency continues because of BAA’s continuing angst and lobbying for the third runway. It needs to be made even more explicit now to BAA that that is not going to happen. I say that—people may have seen the television programme last night—because BAA has bought up nearly two thirds of Sipson and refuses to sell the properties to families. It has made them available to families on short-term licences of up to two years and no more, although it now tells us that those licences are possibly renewable. It is destabilising the village. In addition, the threat of the third runway that BAA keeps mooting is still blighting the villages of Harmondsworth, Longford, Harlington and Cranford Cross.
One solution—I say this to the Government on a cross-party basis—is to agree to put in place a similar covenant to the one at Gatwick that will ensure for generations that there is no further threat of a third runway in the area and that is legally enforceable and binding.
We have discussed the role that High Speed 2 could play in alleviating the pressure on Heathrow. I support High Speed 2, but we need a consultation on the routes into Heathrow as soon as possible. Not consulting on the overall route has caused further blight, particularly within the London borough of Hillingdon.
An issue has come up this week involving my constituents who work at Heathrow. The European Transport Workers Federation, the union representing aviation workers across Europe, held a demonstration on Monday about the deregulation of ground handling services such as baggage handling, ticketing and general passenger facilities. They are concerned that deregulation might not only put security operations at risk at airports across Europe, but affect staff health and safety.
On another staff issue, Heathrow is still a wonderful area of employment opportunity for all west London constituencies. It is still recruiting staff, yet the Government are consulting on closing the Heathrow jobcentre, a reduction of six staff members. Employers and unions alike have urged the Government to rethink, as it is one of the best recruitment facilities at the airport for ensuring that local people are attracted into employment and that the skills base in the area is developed.
Both staff at the airport and those flying out of Heathrow are affected by an issue that the British Airline Pilots Association raised with its members recently. The European Union is seeking to relax the flight time limitations on pilots. Britain has the gold standard, which ensures that we have the best safety standards in the world, but the European Union is seeking to undermine that gold standard and bring us into a system that reduces protections and weakens regulations. BALPA, the trade union for pilots, has made it explicitly clear that it is extremely anxious about the safety implications of the moves within Europe.
Those are the issues that I wished to raise in this debate. On the expansion of Heathrow, there comes a time when my hon. Friends must recognise that they are no longer in the majority but in a small minority. Continuing to harp on about the need for a third runway not only destabilises the population around Heathrow, but prevents our getting on with developing a proper aviation policy that is integrated with transport overall.
Mr Rob Wilson (Reading East) (Con)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing this debate and on the birth of his new family member, Rosie.
I want specifically to discuss my strong support for much-needed improved ground access to Heathrow. In my view, there is a specific and strong case for improving railway connectivity to London Heathrow via a western extension of services. The case is not based solely on improved accessibility for passengers, because it is also driven by a strong national economic imperative.
This is a debate about the future of the industry. Often, when talking about the future, we try to be optimistic. Optimism is definitely required when discussing aviation, due to the financial challenges facing the nation. Given the financial crisis and the need for economic growth to stimulate recovery, we must be mindful of the contribution made by the industry. Simply put, we all acknowledge that a strong aviation industry is good for the British economy.
In that light, I am keen to secure the multiple benefits of improved rail access to Heathrow airport for my constituency of Reading East. However, it is worth noting that the benefits of access reach far wider than individual constituencies. I have been working closely with key figures in government and the railway and aviation industries to make extended western access to Heathrow a reality. As we debate the future of this important industry, I am pleased to report that the project is making progress, which is important.
Estimates from the Treasury put the aviation industry’s contribution to the UK economy at £18 billion, which cannot be ignored in the current economic climate. The aviation sector employs 250,000 people directly and an estimated 200,000 more in the supply chain. Again, that contribution should not be taken lightly. Heathrow airport has 65.7 million terminal passengers each year, and Department for Transport forecasts estimate that that figure will have risen to 85 million by 2030.
Looking to the future, as air travel grows, so will the industry’s contribution to the wider economy. We cannot afford to ignore it or fail to make the right investment to exploit it. After all, there are plenty of other airports across Europe willing to challenge Heathrow’s position. We must defend Heathrow’s pre-eminence on the European and worldwide stage. There is, of course, a balance to be struck between aviation expansion and its negative impacts, such as the environmental considerations that hon. Members have discussed.
Mary Macleod
Does my hon. Friend agree that we must also take account of local residents? What we really want is to make Heathrow better, not bigger, and to ensure that the noise impact on local residents is minimised.
Mr Wilson
Of course. I think that the hon. Member for Hayes and Harlington (John McDonnell) would totally agree. The Government have said that expansion should not come at any price. As we know, they have cancelled the planned third runway at Heathrow. There is, by and large, cross-party consensus on the issue. However, that is not to say that we cannot make improvements to the system that we already have, as my hon. Friend has said, and Heathrow is a prime example. Improved western railway access to Heathrow would help to maximise the benefits that the airport provides.
For my constituency, that means strengthening Reading’s standing as the commercial centre of the Thames valley. Direct railway access to Heathrow would entrench and extend Reading’s position as a place to do business. Leading technology companies such as Microsoft and Oracle have established headquarters in Reading East, along with many other companies too numerous to name with a global outlook and an international reach.
The lack of direct rail access has rightly been described by the president of the Reading chamber of commerce as bringing “huge frustrations”. Big businesses based in Reading pay an estimated £10 million a year in taxi fares to send executives and business people to and from Heathrow, which is not particularly business-friendly. Money is not the only cost to businesses resulting from inadequate connectivity to the airport. The absence of a link also costs them precious time that could be spent with clients and customers. Lengthy journeys on the M4 to Heathrow, with their inherent risk of traffic jams and other delays, are not acceptable for international businesses.
The easier transport to an airport is, the more people and businesses will use it, in which case the economic benefit will then flow into the wider economy. I have been working with key figures at BAA, Network Rail and First Great Western and officials from the Department for Transport. All have come together to breathe new life into the project. As a result, £119,000 in funds was recently allocated to Network Rail, and design consultants have been appointed. A feasibility study is under way and is due to be completed in December. I look forward to the report’s publication.
As I have outlined, the exciting benefits for Reading East are clear, but the project also has the potential to open up direct rail access to parts of the country that are poorly served. For the first time, Heathrow would become directly accessible to Wales, Herefordshire, Devon, Dorset, Cornwall and many other areas by means other than car or coach. I have no doubt that hon. Members representing constituencies in those areas would also benefit, and that they look forward to the report’s publication. Additionally, I hope that they will attend a parliamentary reception that I am hosting on Thursday 24 November to give the project further traction. I am delighted that my right hon. Friend the Transport Secretary will speak at the event.
I am passionate and serious when I say that this project is part of the future of the aviation industry. The implications of this important expansion in accessibility are vast, as millions of people would find themselves with a new route to Europe’s busiest airport. As the world shrinks and our outlook becomes ever more global, why should some parts of Britain be disjointed in their access to our premier airport?
I am optimistic about the future, despite the gloomy economic outlook. Aviation will play an important role in delivering growth for the UK economy. We cannot afford to endanger that future prosperity by not constantly seeking improvements to the industry—in this case, through better connectivity to Heathrow airport.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I will be brief, Mr Gale, because I am conscious of the time. Siren voices in Scotland are already arguing that air passenger duty should be devolved to the Scottish Parliament. I do not share that view, because it would create more problems than it would solve, so I hope that the Minister and her colleagues will resist any temptation to do that.
On Scottish airports, increased competition for slots at Heathrow is already causing a problem, as my hon. Friend the Member for Central Ayrshire (Mr Donohoe) suggested by highlighting BMI’s withdrawal of its flights from Glasgow to Heathrow. The net result is that we have only one airline that flies from Glasgow to London Heathrow, namely British Airways, which has a monopoly where the prices are already soaring. That has given us many problems.
Finally—I am grateful for this opportunity to speak, Mr Gale—Scotland is located on the periphery of Europe and, as such, travelling by air is not a luxury, but an essential element of business and family life. I sincerely hope that the Minister takes that into account.
Maria Eagle (Garston and Halewood) (Lab)
I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe), first, on securing this debate on the future of aviation, which has clearly been in demand from other Members—we have had an excellent debate—and, secondly, on the birth of his granddaughter, Rosie, who will think that she is the centre of the universe by the time she is old enough to read Hansard. I also welcome you, Mr Gale; it is a pleasure to serve under your chairmanship.
Our aviation industry is central to our economic prosperity and should be a key driver of the growth without which we have no prospect of emerging from the dangerous economic situation in which we find ourselves. The industry contributes more than £11 billion to the UK’s gross domestic product—more than 1% of the total—and supports up to 200,000 jobs directly and 600,000 indirectly across the UK.
I regret, however, that just as the Government do not have a credible strategy for growth, neither have they yet managed to set out a credible strategy for aviation, let alone set out the role that aviation could play in improving our economic situation. For a crucial sector on which our economy depends, the reaction from business to the Government’s decision not to set out an aviation strategy until the latter part of this Parliament has ranged from incredulity to plain bemusement.
I would much rather that we were not in opposition—it is a deeply frustrating place to be, as the Minister may recall—but the one thing that it provides is the time and space to develop ideas for the future, as well as some detailed plans. However, after 13 years in opposition, it is clear to the industry and to the wider business world that this Government came to office without such plans.
We have had lots of consultations, relentless industry engagement, scoping documents and taskforces. That is all very laudable, yet none of it makes up for the lack of a policy, let alone a strategy. With the economy on the brink, holding out the prospect of a policy late in the latter part of a five-year Parliament is, frankly, not good enough. It represents a total failure to prepare for government, and Members do not have to take my word for that. The chairman of the Airport Operators Association, Ed Anderson, has said that, while the industry knows what the Government are against,
“we are not sure yet what it is in favour of”,
and he went on to describe “better not bigger” as an “election slogan”, saying:
“Better not bigger doesn’t constitute a strategy.”
The Government also face international criticism. The chief executive of the International Air Transport Association, Giovanni Bisignani, has been quoted as saying that the Government seem
“intent on destroying its competitiveness with a policy agenda focused on increasing costs and limiting capacity growth.”
Sir David Rowlands, a former permanent secretary at the Department for Transport, has described the Government’s policy as “mildly extraordinary”, which is damning criticism from somebody from the higher reaches of the mandarinate.
Baroness Valentine, speaking for London First, said in another place earlier this year that
“government seems content for aviation policy to drift.”—[Official Report, House of Lords, 24 March 2011; Vol. 726, c. 872.]
She has also said, most damningly, that
“the Government’s aviation strategy is damaging our economy and enhancing that of our EU rivals.”
We have heard that criticism echoed by some Members who have contributed to today’s debate.
Maria Eagle
In a moment.
I am sure that the Minister saw the letter in The Times earlier this year signed by 74 senior business leaders. Setting a long-term strategic direction for aviation in London, the wider south-east and across the country is a vital part of delivering the growth and jobs that the country needs, and the letter concluded:
“All options must be considered, short term and long term, to address growing demand.”
We agree with them, which is why earlier this month, in a speech to the Airport Operators Association, I made an offer to the Government, which I am happy to repeat today. We are willing to take the politics out of aviation, put aside party differences and work together on a joint aviation policy for the good of the nation. As I have said, this is a clear, unambiguous offer, with no catch.
Aviation matters to our country—every Member who has spoken in this debate has said so—and to businesses and families throughout the country. It is an industry that needs stability for the long term, and a long-term plan that straddles Parliaments and Governments and that is capable of surviving after fruition.
In addition to the Government’s more immediate work that they must conclude—that is fine—I believe that the best way forward is the establishment of a cross-party commission to set out our long-term aviation strategy for a generation or more. We should not have rows from one Parliament to the next about an element of the strategy, but set out a long-term plan. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football. We must also agree that we will then stick to that agreed strategy, whatever the outcome of the next election.
Any terms of reference for such a cross-party examination of capacity will inevitably start with an understanding that the answer for the south-east will not be to fall back on the proposed third runway at Heathrow. We have accepted that the local environmental impact means that that is off the agenda. The cross-party body must have the freedom to look at all options for growth, including in the south-east, while prioritising making the best use of existing runways and airports. A bigger prize is available for us all if we put political battles to one side and develop a long-term strategy for aviation to which everybody can sign up. It is time to move on and find an alternative way forward.
I should like the Minister to clarify the Government’s position on two further issues: first, the link between high-speed rail and aviation; and secondly, emissions from aviation. We have offered Ministers our clear, cross-party support for the high-speed rail line that we proposed when in government. I have been clear that we will work with the rest of the House to deliver the legislation needed to take forward that vital project. We fully accept that there is simply no other credible way to tackle the growing capacity issues on our existing main rail lines. We have, however, argued that there is a clear case for connecting the new high-speed rail line directly to Heathrow from the start. The Opposition and the Government agree that the line should connect to Heathrow; the only debate is over whether that happens from the start, or via a costly, multi-billion pound spur, tacked on at a later date.
As we have argued, taking the line via our major hub airport opens up the prospect of private sector funding, potentially saving the taxpayer billions. It would lead to a new route that made better use of existing transport corridors and better protected the area of outstanding natural beauty that the current proposal crosses. It would also open up the opportunity to connect to the Great Western main line, thus bringing the benefits of the high-speed line to the south-west and Wales and increasing connectivity for the south-west to Heathrow.
Creating a major new transport hub to the west of London at Heathrow—rather than several miles away at a site with other, inadequate transport connections—that mirrors the hub in the east at Stratford represents the joined-up thinking that is too often lacking in our transport infrastructure planning. I hope that the Minister will confirm that the Government are looking at that alternative proposal.
Our proposal is one that the Minister herself supported when she was the shadow Secretary of State for Transport, and I suspect that she still sees its merit. I hope that she will indicate a willingness to look again at it. She has our support as she seeks to do better at persuading her new Secretary of State of the merits of the case than was possible with the previous Secretary of State.
On carbon emissions, I hope the Minister agrees that we will simply not achieve the goal set out in the Climate Change Act 2008 to reduce emissions by at least 80% by 2050, compared with 1990 levels, unless aviation does more. That is why we believe that future aviation growth must go hand in hand with a greater cut in aviation emissions than we agreed when we were in government.
The Government have failed even to re-affirm their commitment to the existing emissions target for aviation that we set in government. I hope that the Minister will take the opportunity to do that today and that she will support our call for the Energy and Climate Change Committee to set out what it would mean for aviation to go further and ask it to update accordingly the carbon budgets that have been set.
I hope that the Minister will agree with us that, in principle, international aviation should be included as well, once the Committee produces its advice on accounting methodology. As the Minister will know, the industry’s sustainable aviation road map makes it clear that, by 2050, it is possible to get absolute emissions down to levels seen at the turn of the century, even as passenger numbers are projected to grow by a factor of three, so we all agree that it is possible to do more. Therefore, this should be seen not as a threat but as an opportunity. Fuel efficiency improvements in aircraft engines and air frames, improvements in air operations, both in more fuel-efficient practices and air traffic management, and the use of alternative fuels produced sustainably—all those things can make a contribution. The UK should be at the forefront of developing the new technologies that enable the aviation industry to thrive, while reducing emissions.
I again thank my hon. Friend for securing the debate. I hope that the Minister will feel able to respond positively and make up for the Government’s failure to date to provide an aviation strategy, which this country so badly needs.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate, and on Rosie’s arrival. I would also like to associate myself with the comments made about the late Alan Keen and his sad, recent death. He had a long and distinguished record on aviation matters.
I agree wholeheartedly with the importance that hon. Members have attributed to the aviation industry as a strong part of our economy and a vital gateway to the global marketplace for business. Many hon. Members made that point, including the hon. Members for Blackley and Broughton (Graham Stringer) and for Central Ayrshire. I also welcome the emphatic support for the aerospace industry provided by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). Supporting and providing the right economic climate for manufacturing to flourish is a hugely important part of the Government’s overall economic strategy. It is crucial that aviation in the UK is able to grow and prosper in the future, but I think we are agreed that a dash for major aviation growth regardless of cost is not the right approach. That is why we are developing a new aviation strategy to set out the way forward that will allow the British air transport industry to grow in the years and decades ahead, as well as addressing its environmental and quality of life impacts. No one underestimates the scale of the challenge, because reducing harmful emissions through greener technologies is more complex in aviation than in other transport sectors and will take longer to deliver.
In response to the points made on air passenger duty, we have listened with care to industry concerns, which is why we have made it clear that switching to a flight tax is not viable without wider international support for such a move. We have postponed this year’s inflation-based increase in APD, and proposals for further reform of the tax will be published soon.
In response to the hon. Members for Central Ayrshire and for Blackley and Broughton on the issue of the Thames estuary airport, as the Prime Minister has said, the Government have no plans to build a new airport in the estuary, or in Medway or elsewhere in Kent. The hon. Member for Central Ayrshire outlined some of the practical issues that would have to be surmounted before such a programme could go ahead, including, of course, the very significant airspace capacity issues. Nor do we have plans to redevelop Northolt as a third runway for Heathrow.
I agree with my hon. Friend the Member for Reading East (Mr Wilson) that surface access to airports is a crucial part of making them successful. That is why Crossrail and Thameslink are going ahead—both will improve access. We continue to consider other options for western access to Heathrow, including work that could be co-ordinated with the proposed HS2 spur to Heathrow.
We have made it clear that a key plank of the Government’s approach to aviation is the cancellation of Labour’s misguided plans for a third runway at Heathrow. I find it ironic that the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), accuses us of having no policy, when the previous Government spent 13 years on an aviation White Paper that everyone agrees is no longer fit for purpose, and on pursuing a runway that is universally agreed to be absolutely the wrong approach for the UK economy. One of the coalition Government’s first acts was to cancel the third runway at Heathrow. I continue to believe that the price in terms of the environmental impact would have been far too high, given that noise already has a significant impact for thousands of people living with a plane overhead every 90 seconds. At the time, Labour described our position as
“politically opportunistic and economically illiterate”.
It seems that those on the shadow Front Bench have learned the error of their ways—but not all on their Back Benches.
We are clear that we need to protect and enhance the connectivity that is vital for our economy, which is why Heathrow’s success as one of the world’s busiest and most successful international airports is so vital. Our aviation strategy is designed to ensure that the UK maintains and improves the success of this leading international gateway. There is no evidence that Heathrow is about to lose its hub status. It remains an immensely successful airport, with more services to China than any of its European rivals, and a particularly strong connection with Hong Kong as China’s main hub airport. Our immediate priority is to make our airports work better within their existing capacity limits.
Henry Smith
I was delighted to welcome the Minister to Gatwick airport last month for the opening of new security gates. Will she congratulate Gatwick airport on the more than £1 billion of investment that it is making in enhancing capacity? Indeed, Sir John Major will open the renewed north terminal on Thursday.
Mrs Villiers
I am happy to offer my congratulations on that. Contrary to the allegation that the Government have created a policy vacuum, we have a range of initiatives designed to make our airports better—our priority is to make them better, rather than bigger. We are legislating for a much more passenger-focused system of regulation. We are improving air space management through the Future Airspace Strategy in the Single European Sky programme, which is already delivering real benefits in the UK and Ireland. We are changing the way aviation security is regulated to enable the industry to deliver the same high standards in security, but in a more passenger-focused and more hassle-free way.
Our south-east airport taskforce also included proposals to improve resilience and address delays. As a result, we are trialling the tactical use of greater operational freedoms at Heathrow. This is very sensitive, because those freedoms mean that occasionally there will be some incursions into the respite period, with occasional use of both runways for departures, or, occasionally, use of both runways for arrivals. However, I emphasise that that is not mixed mode and the Government remain committed to runway alternation and the benefits it brings. Very careful consideration will be given to the impact of the trial on local communities. I emphasise that the measures being trialled are to be used only to improve resilience, and prevent or recover from disruption, and not to increase capacity, which remains capped at current levels.
We have published our scoping document, setting out the issues to consider for the future of aviation. We know how crucial it is to have a successful regional airport sector, as hon. Members have highlighted today. We will look at ways to harness spare capacity to support economic growth and help to relieve crowding in the south-east. High-speed rail has strong potential to provide an alternative to thousands of domestic and short-haul flights. HS2 to Manchester and Leeds will deliver a three and a half hour journey time between London and Scottish destinations, providing a viable alternative to thousands of Scottish flights.
Mrs Villiers
I am sorry, but I really do not have the time. We accept that the international nature of aviation, as has been said, means solutions are often best delivered at a multilateral level. That is why we are working with the International Civil Aviation Organisation towards agreement on emissions and on noise issues. That is why we have worked very hard on the inclusion of aviation in the emissions trading scheme. We will publish our draft strategy in spring next year for public consultation, with a final strategy due in 2013. We want to see Britain, and British companies, spearheading the global debate on greener air travel and shaping a low-emission aviation sector of the future. We need to work with the industry to find new ways of decarbonising air travel, boosting investment in low-carbon technologies and fuels, and enabling the aviation sector to generate the headroom it needs to grow in a sustainable and successful way. Our world-beating aerospace sector will play a vital role in that. The challenge creates great opportunities for that world-beating sector.
We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environmental impacts and playing its full part in combating climate change.
Mr Roger Gale (in the Chair)
Order. I owe an apology to the Minister and to the Opposition Front-Bench spokesperson. It does not happen all that often, but I am afraid that, so captivated was I by the quality of the Back-Bench debate, I misread the clock. I apologise to both Front Benchers.
I am also sorry that I was unable to call the hon. Member for Crawley (Henry Smith), but his constituents will have noticed from his intervention that he was assiduously present throughout the debate.
Finally, while I am on my feet, I express my pleasure at the birth of the granddaughter of the hon. Member for Central Ayrshire (Mr Donohoe).
Bank Account Fraud
(12 years, 11 months ago)
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Stephen Timms (East Ham) (Lab)
I am grateful to Mr Speaker for selecting this debate, and I am delighted to see the Exchequer Secretary to the Treasury in his place, upholding as always the high standards set by previous occupants of his office.
The debate arises from troubling recent constituency cases, in which constituents who have been the victims of fraud have found themselves seriously disadvantaged by actions taken by the banking industry in response. They have suffered what seems to be arbitrary and draconian punishment without even an explanation, still less any opportunity to challenge what had been done to them. No one can object to the banking industry taking every step it can to protect itself and its customers from fraud. It is absolutely right that it should do so, but those measures need to be taken in a way that treats customers fairly, and such a requirement has not been met in the cases to which I shall refer. I hope the Minister will agree that we need a better way of protecting against fraud, which does not cause its victims such hardship.
I will put to the Minister a series of points, to which he is likely to be sympathetic and to which I will be grateful for his response. First, if customers are to be denied the opportunity to have a bank account, they should be told and not, as in my constituency cases, be left to find out for themselves, submit numerous applications to different banks and be rebuffed each time for reasons that have not been made known to them. They should be told for how long they are likely to be unable to open an account. They should be given accurate information about what alternative courses of action might be available to them. If the only account they will be able to open is with a credit union, they should be told so. My constituents have been provided with no such information and been left completely in the dark.
Secondly, there should surely be at least some allegation of wrongdoing before someone is deprived of a bank account. In the case of my constituents, as I am about to explain, no such allegation was made, but the inter-bank machinery of the financial services industry organisation, the Credit industry fraud avoidance system, was triggered anyway. Thirdly, someone who is to be denied the opportunity to have a bank account should be provided with a reason. Such people should have someone in their own bank, in CIFAS or somewhere with whom they can discuss the matter—someone who understands what is going on. Fourthly, they should be given the opportunity to challenge the refusal of an account. Being unable to hold a bank account is too serious a handicap for there to be no practical way at all to challenge what is being done.
I will set out the experiences of my constituents, which have given rise to my concerns. I first became concerned when my constituent Miss Josephine Dolor came to see me in July. She had a Halifax bank account, with a bank card, which she had last used in early November last year; she was 17 at the time. When she next tried to find the card, she could not do so. At that point, as she accepts, she made a mistake. Thinking that the card would turn up, she did not report its loss and took no action for some weeks. She recognised that the card had really been lost only when she could not find it after Christmas. She then reported its loss at the East Ham branch of Halifax on 29 December last year, some six weeks after it first went missing.
By that time, all Miss Dolor’s education maintenance allowance payments, amounting to about £100, had been withdrawn from the account. In addition, in late November, £1,000 was transferred into her account from somewhere else, and another £600 was transferred in on 9 December. By 18 December, those funds had all been withdrawn. The transfers in have since been confirmed as fraudulent and remain the subject of a fraud investigation by the bank. On 7 February, Miss Dolor was interviewed by a Halifax officer, and she explained what had happened and that she had no knowledge of how anyone else could possibly have known the personal identification number for her card—although they clearly did—and the officer said that she believed Miss Dolor’s explanation.
At that point, it would be difficult to criticise Halifax. Miss Dolor had had the opportunity to explain what had happened, and her version of events had been accepted. However, at that point things started to go badly wrong. In response to an inquiry about the closure of the account from Miss Dolor’s mother, she received a letter from Halifax customer relations dated 29 March. The letter was rather unclear. It included an apology to Miss Dolor, a reimbursement of the £100 that had been taken out of her account and a £50 payment
“for any distress our process has caused”.
It appeared that, as the Halifax officer had stated, the bank accepted that Miss Dolor was innocent of any wrongdoing. But the letter also said:
“No explanation has been provided as to how a third party may have access to your PIN. Regrettably we are not going to offer you any more accounts as a result of the fraud. This is a business decision.”
That blunt termination of the account was only the start of Miss Dolor’s problems. She subsequently found out the hard way that it was impossible for her to open an account with any other bank, because Halifax has registered her with CIFAS. Lloyds Banking Group, the parent of Halifax, tells me that that is a requirement of its membership of CIFAS. CIFAS, though, says that it is not a requirement and that it is up to the bank how the case is registered. Lloyds certainly did not warn Miss Dolor of the consequences of the “misuse of facility” registration that it had made of her. In my view, Lloyds should certainly have explained that to her. I understand why Lloyds registered my constituent: because the withdrawal from the account was carried out using her card—that is not in dispute—and her PIN. Miss Dolor told me that she has no idea how anyone could have known her PIN. It is not written down anywhere, she has not told anyone what it is, not even her mother, and she is not aware of anyone ever watching her use it, although of course fraudsters have some clever techniques for obtaining such information. There is certainly no dispute that someone had the PIN. On one occasion, a fraudulent withdrawal was apparently made in a branch using a signature that did not to me look very much like Miss Dolor’s.
CIFAS told me yesterday, however:
“If Halifax had considered that Miss Dolor was a victim of fraud they would have filed her case as such. If she had been filed as a victim, Miss Dolor’s ability to hold bank accounts, or indeed open new ones, would have remained unhindered...Halifax chose to register this case as a ‘misuse of facility’ which identified Ms Dolor as being a fraudster”.
At the same time as apologising to Ms Dolor and issuing her with compensation, Halifax was registering her with CIFAS as a fraudster, and that registration was subsequently supported by the Financial Ombudsman Service. As a member of CIFAS, Halifax is required to register the details of all proven fraud cases, but I understand that that is not a legal obligation, simply a condition of CIFAS membership. Being the subject of a misuse-of-facility registration with CIFAS has had disastrous consequences for Miss Dolor. Her account with Halifax was summarily closed, and she has since been unable to open an account with any other bank or the Post Office.
One of the most disturbing aspects of the matter for me is that no one explained to Miss Dolor that that was going to happen. Halifax gave the impression that it accepted that she was the victim, and it gave her compensation. It did not inform her that she would no longer be able to have a bank account. She had to find out the hard way. The other banks told her not that that was because of her registration with CIFAS, but simply that she did not meet their criteria for opening an account. There was a real danger in the summer that, because Miss Dolor had no account into which to pay her student loan cheque, she was going to have to give up her university place. In the end, she was able to open an account with a local credit union. She cannot access that account from her university home, so it is awkward for her, but it meant that it was at least possible for her to commence her course in September.
One letter from Halifax suggested that she should open a basic account somewhere. She has tried but has been rejected twice, because that is not possible given her registration. Surely her bank should understand the consequences of its action against her, and inform her of those consequences. That did not happen, and when I pressed Lloyds, its response was:
“Our letter of 29 March 2011 went into detail about CIFAS.”
That was simply untrue. The letter of 29 March should have explained that the misuse-of-facility registration with CIFAS would make it impossible for Ms Dolor to obtain a bank account anywhere. What it actually said was that
“extra checks will be made for you when you are applying for financial products...your credit file has not been updated to hold negative information”.
It reads as though Lloyds was doing her a favour. In fact, Lloyds almost prevented her from starting her university course. Surely customers are entitled to expect their bank to be straight with them.
When a person applies to open a bank account, each bank runs that person’s details through the CIFAS database. If they are found to have a misuse-of-facility registration on CIFAS, it seems that they are told that
“further checks have shown you do not meet the bank’s criteria for an account”,
and that is the end of the story. There is no appeal and no further recourse. Miss Dolor inquired at just about every High street bank, and at the Post Office. She has never had the opportunity to discuss the position with anyone. She has simply received the same automated response every time. My constituent, who is an enthusiastic, intelligent, young woman who aspires to a career in law, has been placed in limbo. As far as one can tell, she has not even been accused of any wrongdoing, let alone found guilty of anything. She is the victim of a fraud, yet she is still, one year after her card was stolen, unable to open a bank account anywhere.
Another constituent, Mr Ravi Borra, contacted me last month on finding himself in a similar situation. He is an MBA student at Coventry university’s London campus. To support himself he has worked full time as a waiter at St Pancras station during his vacation. For that he received just over £1,000 for a month’s work, and he was paid by cheque. After paying that cheque into his bank account in good faith, he was contacted by his bank—again, it is Lloyds—which informed him that the cheque had been flagged as being fraudulent, his account had been suspended, and he had been registered on CIFAS. Like Miss Dolor, he cannot open an account elsewhere, and when he attempted to do so, he was told repeatedly that his application did not pass the qualifying tests. He filed a complaint with Lloyds in September, and was contacted by the fraud department a few days later and was told that, although it could not reopen his old account, it could set up a new account for him. Mr Borra was happy with that compromise. He received his PIN number and debit card for his new account, but the very next day he received a letter from Lloyds saying that
“recent risk assessment on your accounts has highlighted concerns and as a result we have taken the decision to close all the accounts you currently hold with us in two months time...in the meantime, I have placed a block on all your accounts which stop all transactions”.
Mr Borra finds himself in a complete nightmare. He did a month’s work for which he has received no payment. He cannot open a bank account. No one will tell him what is going on. He cannot even apply to extend his student visa and it seems that he may be unable to finish his studies.
Late yesterday, CIFAS told me that Mr Borra’s registration with it was cancelled by Lloyds last month, but no one has told Mr Borra that, and the new block on his new account was imposed after the deletion. He has told me today that he still cannot open an account anywhere, for reasons that are at the moment unknown. Lloyds says that it is simply complying with its obligation as a CIFAS member, but CIFAS says that when someone is registered with it, it cannot delete that data. The prerogative for doing so lies with its members—the banks—and the registration remains on the database for a minimum of one year. One year without a bank account seriously disrupts a person’s life. There seems to be nothing my constituents, who have not been accused of anything, can do to open a bank account and resume their lives.
The Minister will recognise that being without a bank account is a serious disadvantage and may mean not being able to start a university course or take up a job. People should not lightly or accidentally be deprived of the chance to have an account, but that is what seems to have happened in these cases. As far as I can tell, no one decided that my constituents should be denied the chance of having a bank account. Rather, actions by their bank triggered a response from the machinery that has been put in place, with the effect that they cannot have a bank account for at least a year. Surely that is too serious a sanction to allow it to happen by accident. Being denied a bank account is appalling for anyone, and contrary to Government policy. As we move towards the introduction of universal credit, this Government, like the previous one, are encouraging people to have bank accounts, but in arbitrarily closing accounts the banks are undermining Government policy as well as causing hardship to their customers.
I hope the Minister agrees that people such as those I referred to should not be treated in that way. Perhaps he can offer some hope that those who find themselves in that nightmarish situation may be offered a means of finding a way out.
The Exchequer Secretary to the Treasury (Mr David Gauke)
It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate the right hon. Member for East Ham (Stephen Timms) on securing the debate.
I sympathise with the right hon. Gentleman’s constituents, whose experiences he described so vividly. He knows that it is difficult for the Government to comment on specific cases, but it is clearly unacceptable that individuals who have been victims of fraud—that seems to be the case that he set out—should be systematically denied access to a bank account. As far as I am aware, there is no legal or regulatory reason for this to happen.
As the right hon. Gentleman said, the consequences in this day and age of someone being denied a bank account are considerable, and I entirely agree with him that that should not lightly or accidentally be denied. It is worth making the wider point that the Government want to ensure that we improve levels of financial inclusion, as indeed did the Government in which he served with such distinction. We believe that banks should serve the economy, and we are committed to improving access to banking and the transparency of financial products for consumers.
Having access to appropriate banking services is an important element of modern life, and it can help to alleviate some of the problems faced by low-income families. A bank account enables individuals to make and receive payments through a variety of channels, have a more secure place to keep money and reduce the cost of household bills. The number of individuals without bank accounts has fallen in recent years, but the Government remain keen to see the situation improve further, and in particular to identify groups who may have specific difficulties in accessing a bank account.
While the situations described by the right hon. Gentleman are clearly invidious, it is not clear how many individuals are affected by this sort of difficulty. This is the first time that I have personally been made aware of this issue. As far as the Treasury is aware, it is not widespread. The right hon. Gentleman may have identified a growing problem that we need to look at. His industry and dedication as a constituency MP have highlighted not one but two cases that happen to have occurred among his constituents.
The issue falls within the remit of the Financial Secretary to the Treasury. He is not available to attend the debate, but he will be asking officials to investigate how this matter may have arisen and how many consumers may be affected. We will write to the right hon. Gentleman to explain the findings, and I am grateful to him for highlighting this particular issue. Clearly, we need to understand whether the problem is widespread.
The right hon. Gentleman set out four points, and I shall try to respond as best I can. I will take his first and third points together. He asked whether individuals should be informed if they are going to be denied a bank account and, if so, whether they should be provided with a reason. Those are eminently sensible and reasonable points. Consumers have the right to ask for a reason if they are denied a bank account, as set out in the Money Advice Service’s guide to bank accounts, which is available on its website. Consumers may also complain to the specific firm if they are unhappy with the outcome, and they can take their complaint to the Financial Ombudsman Service.
The decision to offer a bank account is ultimately a commercial decision. Current account providers are not obliged to provide a specific reason for not offering an account. However, it is worth highlighting the Financial Services Authority’s principle that financial institutions are required to treat their customers fairly, which is relevant in these circumstances.
The right hon. Gentleman questioned whether consumers should be denied a bank account where there has been no allegation of wrongdoing. Again, decisions as to whether to offer a bank account are a commercial matter for the financial institution concerned, and the Government do not intervene in such decisions. However, there is no legal or regulatory reason for victims of fraud to be denied a bank account. The circumstances that he set out appear to be of some concern.
The fourth question asked by the right hon. Gentleman was whether consumers should be given the opportunity to challenge the refusal of an account. If consumers are unhappy with the decision taken, they may complain to the specific firm concerned, and if they are unhappy with the outcome, they can take their complaint to the Financial Ombudsman Service. I reiterate the point that if a financial institution, or more specifically a bank, has been in breach of the FSA principle of treating customers fairly, the individual customer can raise that with the bank and with the Financial Ombudsman Service. If the explanation that is given to a customer is wrong—for example, if there is misleading information about how CIFAS works and its impacts—without wanting to be drawn too much into specific cases, it seems there is a case that the customer is not being treated fairly.
Stephen Timms
Part of the difficulty arose when the banks to which an application was made simply said to Miss Dolor, “You do not meet the criteria for an account.” I do not know whether that meets the terms of providing an explanation, but it clearly did not shed any light on the matter for her. If she had been told that she had been registered in such and such a way with CIFAS, she would have understood what was happening. The whole process was opaque. Does the Minister agree that some effort should be made to provide some illuminating information rather than a kind of stonewall response? It might meet the letter of the requirement, but in practice it does not help the customer at all.
Mr Gauke
I have considerable sympathy with the point that the right hon. Gentleman makes. Again, I do not want to be drawn into an individual case, but clearly it is not terribly helpful when the response may be technically accurate, but does not get to the heart of the matter. As he has set out, the individual customer, a member of the public, will be concerned if they find themselves in that most difficult of situations where they are being denied a bank account, but without any real understanding as to why. As in the cases that he has highlighted, an individual may go from bank to bank without being given any real indication as to why they are in that difficult position. In such circumstances, I sympathise with him and his constituents.
The Government want to ensure that everyone can access the financial services that they need to play a full part in society. I am grateful to the right hon. Gentleman for raising this issue in today’s debate. I assure him that we will consider the matter and investigate whether it is widespread. I want to assure him that it will be taken into account as part of the Government’s ongoing work to improve financial inclusion and access to bank accounts. He has rightly set out some of the difficulties that exist for individuals if they are not able to access a bank account. If the attempt to tackle fraud is working in such a way that the innocent are being punished, we need to address that by working with the FSA and the high street banks.
I reiterate my thanks to the right hon. Gentleman for raising the matter. My colleague, the Financial Secretary, will reply to him with further details after we have had an opportunity further to investigate the extent of the problem. If there is anything that we can do to address this matter, we are certainly keen to do so.
Planning Guidance (Northumberland)
(12 years, 11 months ago)
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Sir Alan Beith (Berwick-upon-Tweed) (LD)
Thank you, Mr Gale, for chairing this debate. I am glad that the Minister is taking part. He and I have worked together on other issues over quite a long period. I am glad to have the opportunity to discuss the potential impact of the draft planning guidelines in Northumberland. My hon. Friend the Member for Hexham (Guy Opperman) would like to have taken part, but he is still taking part in the constituency boundary inquiry in Newcastle, at which I spoke yesterday.
I want to address three main questions in this short debate. First, does the guidance enable planning authorities to combine the protection of the countryside with the encouragement of those forms of development that local people need if they are to have affordable homes and jobs? Secondly, how does the guidance affect the strategic housing land assessment that councils have been required to carry out? Thirdly, how will it be applied to wind farms and wind turbines?
Quite a lot of my constituents have involved themselves through e-mail in the debate about the planning proposals, and some have clearly been concerned by fears that they will unleash a torrent of development in the countryside or strip away the protections that the countryside enjoys. Ministers have made it clear that the guidance does not reduce or dismantle the protection given to national parks, areas of outstanding natural beauty or the green belt—my constituency contains the first two of those. Instead, it embodies a principle that has always been part of the planning system: a person has the freedom to make use of his or her land unless there is good reason for the community to deny that right, such as the protection of landscapes, the conservation of historic buildings and areas, or the promotion of sustainability. I sometimes wonder, however, whether man-made landmarks that we know and love—Stonehenge, Blackpool tower, Kielder water, Lindisfarne castle, for example—would have received planning permission from some authorities.
The Government are right to get rid of much of the top-down structure and guidance that has grown up over the years. Regional spatial strategies have ludicrously restricted the number of houses that can be built in Northumberland’s rural villages, and regional strategy has created a presumption in favour of wind farms in many of the most attractive parts of my constituency. The objective of having a much shorter guidance manual is correct, but the Government must develop clearer wording around the concept of a
“presumption in favour of sustainable development.”
If they do not, Ministers and planning authorities will waste a lot of time and money in the law courts over the next few years, and the planning process will be subject to even more delays. People may feel that the dice are being loaded against them—I will return to that point.
When an organisation with such a distinguished record as the National Trust rings the alarm bell, Governments need to take notice. The trust is a major land and property owner in my constituency; it owns most of the village of Cambo, and much of Low Newton-by-the-Sea, as well as historic buildings that are great tourist attractions. The trust’s initial comments and those of the Campaign to Protect Rural England might have given the impression that people who live in and care about the countryside are against all development, but that has never been so. Indeed, the National Trust sometimes applies for planning permission for developments that it considers necessary to make the country houses it owns sustainable. Country people know that the countryside cannot be run as a museum. If they are to provide local services, local people need homes at prices that they can afford. Shops, pubs, churches and local transport need a resident population to sustain them; they cannot survive on weekend-cottage owners alone. Jobs are needed to stop rural depopulation.
During my time as a Member of Parliament—which, admittedly, is getting quite long; 38 years last week—I have seen a huge reduction in the number of houses inhabited full time by people who work locally. House prices, inflated by scarcity and the demand for second homes, are far beyond the reach of local people in rural Northumberland. I therefore welcome the wording in the guidance that, in rural areas, local councils should plan to meet the need for affordable housing and that some market housing should be allowed if it will provide more affordable housing for local people. Although I welcome the debate about protecting the countryside, I do not want it to lead to the Government adopting wording that would make it even more difficult to secure the housing and small business development that are essential to a sustainable countryside. Equally, I would not want anything to add to the feeling shared by some of my constituents that, even under the current system, the balance of power is in favour of large developers.
James Wharton (Stockton South) (Con)
I congratulate the right hon. Gentleman on securing this important debate; it refers specifically to a part of the world that is not too far from my own. He pointed out that many communities feel that they do not have enough control over developments. Does he agree that that is the case all too often? Many communities in my constituency are opposed to local developments—whether housing developments, wind turbines or any other sort of development—and feel that they have no power or voice under the old system.
Sir Alan Beith
Indeed, and I welcome the various ways in which the Government are trying to empower local people—for example, through local neighbourhood planning. Alnwick in my constituency is one pilot area for such a development. I genuinely welcome the Government’s attempt to bring more of the planning decision process to local people. Of course, some things in the planning guidance might work the other way, and I will address some of those issues.
As I have said, some people in my constituency feel that the dice are loaded against them in favour of big developers. In my area, there is the added issue of large, landed estates that are in a relatively powerful position and can consider their actions for the long term. They have many levers in their power, which people feel can sometimes make it difficult effectively to oppose developments that they do not like, or even to secure the appropriate balance of social housing in a development.
The Minister will know that I have experienced difficulty in getting a satisfactory answer to constituents’ concerns about the strategic housing land availability assessment and how it will relate to the presumption in favour of sustainable development—what a jargon-filled world we live in, between the SHLAA and the presumption, but that is what we must examine. If the SHLAA is just a developer’s wish list and does not change the designation of land or the way that planning considerations are applied, it will not be a problem.
Experience of a recent case in Berwick, however, has created the fear that the SHLAA listing, which the planning authority agreed to without first consulting English Heritage, could override important archaeological and landscape considerations in future planning decisions. An extremely sensitive site close to the Royal Border bridge and castle was included in the draft SHLAA, although the heritage and landscape factors were not listed in the assessment. That has left local people feeling that, should the area ever be the subject of a planning application, the dice would already be loaded because relevant factors had been set aside by the site’s original inclusion in the land assessment.
There is also concern that, in many places, local development plans do not exist, have not been finally agreed to, or have not been updated. That could lead to a disregard of relevant planning considerations for sites included in the SHLAA list, or to the presumption in favour of sustainable development overruling conservation, landscape or other considerations. What assurance can the Minister give to localities that do not have an approved up-to-date local plan?
Finally, I will consider wind turbines and wind farms. Large parts of my constituency, which is characterised by beautiful countryside and stunning views, have been designated as suitable for onshore wind generation. Some parts, such as the national park, although not the adjoining areas, have been excluded. The result is an avalanche of applications for the rest of the area, some of which encircle communities such as Wingates, a hilltop village near Rothbury. In the borders region, 250 turbines have been erected and 600 are in the planning process. Northumberland has granted permission for three wind farms, and a further 10 have been approved by inspectors on appeal. The planning authority needs to be confident that it is free to make sensible, careful and robust decisions about which sites to approve and which to reject. Opinions are, of course, divided over individual wind farm sites and about the general policy of wind-farm development.
James Wharton
The right hon. Gentleman refers to the need for local councils to have a genuine framework of accountability through which they can influence applications for wind farms. In Northumberland, the Conservatives have called on the county council a number of times to look at the introduction of a policy that will make it clearer, for both applicants and residents who are concerned about potential developments on their doorsteps, what the framework in that area should be and what is, or is not, permissible. Does he believe that to be a possible way forward, and would he support such a position?
Sir Alan Beith
I will go on develop the case in my own way, and the hon. Gentleman will see how I think that we should handle it. His intervention is relevant to my point because, although there are many divided opinions, they do not divide along party political lines. He mentioned the Conservative party, and in Northumberland there are applications to place a turbine on a site belonging to the Conservative leader of Northumberland county council and for a wind farm to be put on land owned by the hon. Member for Stroud (Neil Carmichael). Enthusiasm for renewable energy and wind farms, and concern about them, stretches across the parties.
In such a highly-charged debate, we must know what the new planning guidance will mean. It could be argued that a wind farm or wind turbine is, by definition, a sustainable development because it produces sustainable energy without carbon or non-renewable resources. If that is combined with the existing designation of some larger areas as suitable for wind farms, does the presumption in favour automatically come into play? We need to clear that up, because if it were so, the planning process would break down. The planning authority would be left powerless to make sensible decisions about the suitability of a site, its cumulative impact in the light of other approvals, landscape issues, wildlife protection or proximity to residential developments. The planning authority would fear losing every appeal against refusal, at considerable cost. Therein lies one of the problems with the suggestion made by the hon. Member for Stockton South (James Wharton). If the planning authority devises a framework that is more restrictive than the regional framework to which it is already subject and then loses its cases on appeal, we are no further forward.
Let me consider, as I have referred to it, the proximity to residential properties. The planning guidance is a missed opportunity to write in a national presumption against close proximity to residential properties for large or multiple turbines. The Government have not looked favourably on the relevant private Member’s Bill promoted by the hon. Member for South Northamptonshire (Andrea Leadsom). They should reconsider the issue to give people some reassurance, not about small turbines designed to provide electricity for a house or farm, but about large installations built very close to residential property.
The Minister must make it clear that what I have described in respect of the presumption in favour of sustainable development will not have the effect that I have suggested—that that is not the Government’s intention. Even within areas designated as suitable for wind farms, there should be no non-rebuttable presumption. Planning authorities will be seen as a waste of space if they do not have the freedom to control the rush to find and develop wind-farm sites in which so many developers are competing. My constituents will rightly be angry if the planning authority is unable to take into account historic views of Holy island, Bamburgh and the Cheviots, or any of the other factors that I have mentioned, including wildlife protection and closeness to residential property.
There are a great many applications in my constituency, and that has introduced a new and rather worrying element, to which I want to direct the Minister’s attention. One developer, which has applications in relation to the Elsdon area and the area north of Belford—two separate applications relating to different parts of my constituency—somehow managed to give residents in Elsdon the impression that, although there would be some funds for community benefit if the scheme went ahead, there would be a lot more if they did not oppose it and there was no need for an appeal or an inquiry. It would not be acceptable for the planning process to be distorted by people being pressured to forego their right to express their point of view. Needless to say, it did not have that effect. When the people affected thought that that was what they were being told, they reacted in a pretty hostile way. It certainly did not bring them round in favour of the proposal. However, that would be a very unwelcome development in planning matters.
Some people do not like community benefit at all. I accept that if a scheme—whatever the development—goes ahead and has potentially detrimental effects on an area, or if it would be more acceptable if other things were done at the same time, developers should be encouraged to provide those benefits to the community. However, their scale should never be conditional on whether the planning process has been allowed to go ahead in the normal way or has been curtailed by people feeling that somehow they would lose out if they pursued their objection.
We want to protect the very special beauty of our countryside from the threat of inappropriate or badly sited developments, whether wind farms or other kinds of development. We need the power to make local decisions. We want to maintain a living countryside that welcomes the homes and jobs that are needed if the countryside is to be sustainable. The result of the debate about planning policy needs to be a system in which local people play a crucial part not only in helping to shape their area, but in keeping it as one of living communities whose beauty and grandeur are protected for future generations.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
It is a pleasure to speak under your chairmanship, Mr Gale. I congratulate my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) on securing the debate, which I know is important both to his constituents and more generally. I am delighted to be doing business with him again in a Committee Room of sorts. Our roles today are slightly different from our previous incarnations in the Select Committee on Justice.
I shall try to deal with the important points raised by my right hon. Friend. He has made powerful points in the context of his constituency and its surrounding county. In a wider context, there has been a positive and constructive debate on matters of planning policy in relation to the Localism Bill and in other debates in both Houses. I welcome the opportunity to debate those matters further.
I am pleased that my right hon. Friend recognises, fairly, that there is a pressing need for reform of national planning policy. The system has grown unworkably complex, with more than 1,000 pages of national planning policy and at least a further 6,000 pages of guidance. The complexity of that system slows down decision making and frustrates the sustainable growth that the country needs, such as new homes for young families struggling to put together a deposit and new jobs to breathe fresh life into local economies. He correctly recognises that that applies in rural areas as much as in towns and cities.
A streamlined framework focusing on key priorities will be more accessible and transparent. In the future, anyone who wants to understand the principles informing how decisions are made will be able to do so. That is important, as polling evidence suggests that many people feel cut off from the planning system because it is too complex. They do not feel able to find their way through it. They feel that they are unable to understand or to influence. If the system is not intelligible to the intelligent and well-informed citizen, it is not delivering on one of its key purposes.
It is important to get this right, because planning is a very important tool. It is how we create communities that work and, as my right hon. Friend said, places that we are proud of, and it is how we lay the foundations for business. Also, and very importantly, it exists not only to protect, but to enhance our green spaces, parks and countryside for our enjoyment today and for generations to come.
Let me make some remarks on the specific issues that my right hon. Friend helpfully raised. I am sure that you, Mr Gale, and other hon. Members will understand that I am constrained in what I can say today, given that we are engaged in considering the large number of responses—some 14,000, as I recall it—that we have received to the consultation. Of course, we need to give all the responses careful attention and avoid any impression of pre-empting the outcome of the consultation.
We have heard concerns expressed about the effect of the proposed presumption in favour of sustainable development on local areas, whether that is my right hon. Friend’s rural Northumberland or urban areas. Some of those concerns—I exempt my right hon. Friend’s observations from this entirely—have been very wide of the mark. Joseph Harper, QC, editor of the “Encyclopedia of Planning Law and Practice”, has said that much of the criticism is ill informed. However, that does not mean that there are not genuine concerns, which I hope that the Government will be able to allay.
We want to ensure that planning is a positive process that reflects the needs of each area and to emphasise the central and critical role of the local plan in decision making. We want local authorities to be responsible for deciding what housing and other development they need and where it should go without the sort of top-down, unpopular targets that were imposed on them under the previous Government’s regional strategies. We want that development to be plan-led. Indeed, the proposed new system does not undermine the concept of the plan and enhances its importance.
What the presumption says, in layman’s terms, is quite simple: locally prepared plans should set out what is needed in each area, development in line with those plans should be approved without delay, and in the absence of an up-to-date plan, the policies in the draft national planning policy framework, including its requirement for development to be sustainable, should guide decisions.
My right hon. Friend raised a concern about irrebuttable presumptions. I assure him that that is not the case. Like any legal presumption, the presumption is rebuttable by evidence, which is a basic legal tenet. In this context, the best evidence to rebut a presumption will be the existence of an up-to-date local plan that deals with the issues raised by the development in question.
Sir Alan Beith
I want the Minister to take into account the situation in Northumberland, where the county planning department took over from six district councils, some of which contained significant areas that were not the subject of a developed or agreed local plan. In these times of straitened resources, getting the structure of local plans fully completed and agreed in every place will take some time. We may need some kind of transition period before the principle can operate in quite the way that he has suggested. Will we not have a situation where some factors are not properly examined, because there is no local plan governing the situation?
Robert Neill
I take my right hon. Friend’s point. I am sure that he will have noticed that the Minister with responsibility for decentralisation, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), recognised that point in the debate that we had in the House recently. I cannot pre-empt our response to the consultation, but I reassure my right hon. Friend the Member for Berwick-upon-Tweed that his point is particularly well heard by the Government. The Minister with responsibility for decentralisation has indicated that we will look to provide suitable transitional arrangements for local authorities in such circumstances, including the local authority of my right hon. Friend the Member for Berwick-upon-Tweed.
Against the background of the importance of a local plan, the onus is put on democratically produced local plans to identify and provide for the needs of each area. Plans must be based on evidence and be deliverable, or they will not have the confidence of the community or of investors, who might need to be brought into the area.
On housing, plans must, as is the case now, reflect the local housing based on a strategic housing market assessment and the availability of suitable land, which is set out in strategic housing land availability assessments. SHLAA, as they are often referred to, do not allocate land for development, but inform decisions on land allocations to be taken through a local plan. They form part of the evidence base. Policy restrictions such as landscape designations and the potential impacts of development on the landscape are identified through the assessment. Sites are chosen for development in the local plan and are subject to full consultation with statutory consultees and the public through the local plan process. None of that is undermined in the new system.
Sir Alan Beith
That is a key point on which I want to press the Minister. If the assessment has been carried out in a way that fails to address some issues, such as landscape, is there any proper mechanism by which it can be reintroduced when a planning decision has to be taken?
Robert Neill
Ultimately, each planning application has to be addressed on its merits and the relevant material considerations and policy. The plan is one of the principal material considerations in a case, but the existence of, for example, designations that are consistent with national policy or other impacts can always be taken into account. There is a classic dictum by Lord Clyde in the House of Lords on such matters, which states that the weight to be placed on any material consideration is a matter for the decision maker. Again, that has not changed. Obviously, the weight that each material consideration carries will vary from case to case, but that is the whole point of the system. I assure my right hon. Friend that such issues are not shut out by the process.
The natural environment is an important part of the process. We pay great attention to the safeguarding of the natural and historic environment. Under local plans, communities can shape development in an area to reflect what is important locally, which includes special landscapes or the character of villages. Again, the best protection, making allowances for the transitional arrangements that I have referred to, is to get a plan in place, which can reflect precisely the points raised by my right hon. Friend.
Although we recognise that we need jobs and homes for young people and opportunities for businesses to expand, that will not be at the expense of our natural and historic environment. The draft framework sets out the Government’s thinking on how the planning system should safeguard the environment while providing for sustainable growth. The national planning policy framework maintains designations for the green belt, areas of outstanding natural beauty, national parks, sites of special scientific interest and other designations that protect the character of our country’s landscape, stop unsustainable urban sprawl and preserve wildlife. We are going further on that, because we will introduce a new local green space designation through the NPPF. It will enable communities to identify green areas of particular importance to them for special protection. That might be a key green in a village or a market town, as well as in a major city.
If we are going to protect the environment, it is important that we use land effectively. That is why the draft framework clearly states that
“plans should allocate land with the least environmental or amenity value.”
That means using derelict land when considering where to develop. We want developers to reuse derelict land, if that is the most appropriate course of action.
We also want to respect the historic environment. It is a non-renewable resource, and its conservation is integral to sustainable development. I reassure my right hon. Friend that we are committed to ensuring that the framework will maintain the existing protection, as set out in planning policy statement 5 for the historic environment, and we are looking carefully at the specific wording in the NPPF.
My right hon. Friend mentioned wind farms. Residents will have greater choice than ever in that regard through their local and neighbourhood plans—neighbourhood plans are a key part of the system, too. The plans will enable them to decide the look and feel of the places that they live in and love, while making sure that genuine larger-than-local objectives are met, such as protecting the natural environment, supporting sustainable local growth and combating climate change. I appreciate that proposals for wind farms can be controversial, but onshore wind, along with other renewables, has an important contribution to make to our energy mix and to reduce the pressure on consumer bills. However, that is not and should not be any excuse for building wind farms in the wrong place. The draft framework does not give a green light to all development proposals.
Whatever the class of development, decisions will continue to be plan-led. Plans will continue to set out what would be unacceptable, and they will be underpinned by the environmental safeguards in national planning policy. I believe that our new planning policies will ensure that communities and their environment are protected from unacceptable developments.
The consultation is closed, and I have indicated the steps that we are taking to consider it. As well as the written consultation, we held 11 regional workshops, including in the north-east. We have had wide engagement with organisations across the spectrum, including those referred to by my right hon. Friend, and I am glad to say that there has been good progress. We are finding unlikely bedfellows—property developers and environmental groups—sitting down and talking together to find common ground on how we go forward.
I hope that I have given my right hon. Friend and his constituents a renewed assurance on the transitional arrangements and the importance of historic and other environmental protections, and reassured them that the new planning policy framework is an opportunity, not a threat. I look forward to working with him again to see how we can take the framework forward as it is translated into a final document.
Question put and agreed to.
Written Ministerial Statements
(12 years, 11 months ago)
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ECOFIN (8 November 2011)
(12 years, 11 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council was held in Brussels on 8 November 2011. The following items were discussed:
Financial Transaction Taxes (FTTs)
The Commission presented its proposal on FTTs. Under the proposal, the tax would apply where at least one of the parties to the transaction was established in a member state. The tax rate would be 0.1% of the value of equity and bond transactions, and 0.01% on derivative contracts on the notional value of the transaction. I made it clear that the Government do not support the Commission’s proposal. As stated in the Commission’s own assessment, it would reduce growth and cut jobs. Other member states, including Bulgaria, the Czech Republic, Italy, Luxembourg, Latvia, the Netherlands, Romania and Sweden also voiced concerns with the current proposal. I asked the presidency and the Commission to work on a timetable to resolve this issue quickly, as it was clear that the Council would not be able to reach unanimous agreement on this proposal. The presidency noted the request for a fast resolution, and suggested the working group meeting on 5 December should consider options and alternatives to put to Ministers for further consideration.
Energy Taxation Directive (ETD)
The presidency decided to remove the orientation debate on the ETD from the agenda. This directive would require member states to tax energy products by taking into account both CO2 emissions and energy content. Discussion will continue with officials at working group level.
Follow up to the October European Council. 23 October and Informal meeting of EU Head of State or Government on 26 October
Ministers discussed the banking package that was announced on the 26 October by EU Heads of State and Government. The discussion focused on all three aspects of the banking package: access to term funding for banks; bank recapitalisation; and state aid guidelines. I made it clear that the Government would support co-ordinated national guarantee schemes, where appropriate, to support banks accessing term funding. However, the Government could not support a scheme which placed euro area bank liabilities on the UK. I underlined the importance of the bank recapitalisation aspect of the package. This should be undertaken while mitigating the risk of deleveraging. I also emphasised that the state aid rules should continue to apply fully. As a next step, the Council asked the Economic and Financial Committee to explore the options for addressing the issues related to access to term funding.
Follow up to the G20 summit 3-4 November in Cannes
Ministers discussed the outcomes from the G20 leaders’ summit held in Cannes on 3-4 November. The outcomes from the summit include: an action plan for growth and jobs; building a more stable and resilient international monetary system; reforming the financial sector; promoting more efficient commodity markets; strengthening the international trading system; and addressing climate change and development challenges. The G20 agreed that additional resources for the IMF could be mobilised in a timely manner; Finance Ministers will work on deploying a range of options by their next meeting.
Financial assistance to Greece—disbursement of next instalment
The presidency removed this item from the agenda. Euro area countries and the IMF made it clear that they would not disburse the next instalment of the Greek financial assistance programme until there was greater certainty about the new Greek Government. Once the new Government have endorsed the measures to put Greek debt on a sustainable footing, as agreed at the informal meeting of EU Heads of State and Government on the 26 October, the sixth tranche can be disbursed.
Economic governance—surveillance of macroeconomic imbalances: design of the “scoreboard”
The Council agreed conclusions on the scoreboard for assessing macroeconomic imbalances. Ministers agreed that current account surpluses would not lead to sanctions. Ministers also agreed the scoreboard for the excessive imbalances procedure. The Government support these measures as they will help to restore and maintain macroeconomic stability in the EU. The six-pack on economic governance, including the scoreboard, will be implemented in mid-December.
Preparation of the 17th Conference of Parties (COP-17) of the United Nations Framework Convention on Climate Change (UNFCCC) in Durban. South Africa
ECOFIN agreed conclusions on climate change in preparation for the UN conference in Durban, 28 November to 9 December. The conclusions endorse a report on finance provided by the EU and its member states as part of their “fast start” commitments. These commitments will aid climate mitigation and adaptation measures in developing countries.
Annual Meeting of EU and European Free Trade Association (EFTA) Economy and Finance Ministers
This meeting took place before the formal ECOFIN, and discussed improving regulation to secure financial stability. The Commission outlined the comprehensive response that was set out at the informal meeting of EU Heads of State and Government on 26 October. The President of the European Central Bank, made it clear that the Basel III rules on capital requirements for banks should be minimum, not maximum requirements. There is a risk that banks might deleverage as a consequence of the current economic environment and uncertainty about capital requirement rules. Following this, there was a roundtable discussion with Finance Ministers from Liechtenstein, Iceland, Norway and Switzerland. EFTA countries shared their views on the recent financial crisis and economic developments in euro area countries, and the impacts of these on their own economies.
Follow up to the Eurogroup meeting, 7 November
Ministers discussed political and economic developments in the euro area, as a follow-up to the Eurogroup meeting. I underlined that the deterioration in the euro area was having a huge impact on the UK and other non-euro area countries. As such, all 27 countries have a strong interest in the situation being resolved. I made it clear that the euro area needed to give more detail on how they would implement the package agreed at the informal meeting of EU Heads of State and Government on the 26 October.
ECOFIN (18 November 2011)
(12 years, 11 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Economic and Financial Affairs Council—Budget meeting will be held in Brussels on 18 November 2011. There is no provisional agenda at present. The following items are on the agenda:
Preparation of the Conciliation Committee meeting with the European Parliaments
The Council will aim to agree a final position on the draft budget for 2012, as part of negotiations with the European Parliament via a concurrent Conciliation Committee meeting. The Government will seek a final budget that delivers real budgetary restraint at EU level, supporting ongoing efforts to consolidate public finances across many member states, and that respects the principles of sound financial management.
As part of this process, the Government expect Ministers to be invited to discuss the Letter of amendment No. 2 to the preliminary draft budget for 2012, which handles mainly administrative costs relating to the expected accession of Croatia to the EU. The Government believe that these amendments should not increase the level of EU administrative expenditure.
Ministers are also expected to be invited to discuss Letter of amendment No. 3 to the preliminary draft budget for 2012, which concerns updates for estimated needs for agricultural expenditure and international fisheries agreements, reflecting changing market factors, revised estimates of needs for some direct payments, and legislative decisions this year, which are expected to affect this policy area next year. The Government are broadly supportive of these technical amendments.
Finally, Ministers may be invited to discuss this preliminary draft amending budget No. 6 for 2011, which would amend the 2011 EU budget to reflect latest implementation capacity and financial needs for the remainder of this year. The Government believe that any extra funding needs should be met fully via redeployments within existing budgets.
Outcome of the Conciliation Committee meeting with the European Parliaments
The Council will seek to agree to the outcome of the Conciliation Committee conciliation.
Any other business
At this time, the Government do not expect any issues to be raised under this agenda item.
Banking Act 2009 Reporting
(12 years, 11 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Treasury has laid before the House of Commons a report required under section 231 of the Banking Act 2009 covering the period from 1 April 2011 to 30 September 2011. Copies of the document are available in the Vote Office and the Printed Paper Office.
Personal Independence Payment
(12 years, 11 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Welfare Reform Bill introduces a new disability benefit, personal independence payment (PIP), which will replace disability living allowance (DLA) for working-age claimants from 2013-14. There are a number of existing tax reliefs relating to DLA, and suitable amendments to a number of pieces of tax legislation will be needed on the transition to PIP.
In line with the Government’s approach to tax policy making, legislation relating to these provisions will be published in draft form in due course, with appropriate amendments made in a future Finance Bill (or by Treasury Order if appropriate).
In line with this, the relevant provisions have been removed from the Welfare Reform Bill.
However, the Government have decided to retain the provision in the Welfare Reform Bill that will make PIP tax exempt, in order to provide absolute certainty that these payments will be free of tax.
Private Finance Initiative
(12 years, 11 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
Today, I am announcing the Government’s intention to reform the private finance initiative (PFI).
The Government are committed to continuing sustainable investment in the assets we need to deliver public services, including our schools, hospitals and roads. However, we need to ensure that this investment is cost-effective, and that the taxpayer is getting maximum value for money. The Government share some of the commonly identified concerns that PFI contracts can be too costly, inflexible and opaque.
Reforming the PFI model will be the next in a series of steps that this Government have already taken to improve the cost-effectiveness and transparency of PFI.
We abolished PFI credits at the spending review 2010 to create a level playing field for all forms of public procurement. We also introduced new assurance and approval arrangements in April this year, to strengthen the scrutiny given in the approval process of all projects, including those using private finance.
In July, to improve transparency, the Government published, for the first time, the unaudited Whole of Government accounts which included an assessment of the PFI liabilities, and we announced a plan to deliver £1.5 billion of savings from the existing stock of PFI contracts in England.
The Government will expect a new delivery model to draw on private sector innovation but at a lower cost to the taxpayer, offering better value for our investment in public services. The Government’s approach to reform will be guided by the following principles, to create a model that:
is less expensive, and that uses private sector innovation to deliver services more cost-effectively;
can access a wider range of financing sources, including encouraging a stronger role to be played by pension fund investment;
strikes a better balance between risk and reward to the private sector;
has greater flexibility to accommodate changing public service needs over time;
maintains the incentive on the private sector to deliver capital projects to time and to budget and to take performance risk on the delivery of services;
delivers an accelerated and cheaper procurement process; and
gives greater financial transparency at all levels of the project so that the public sector is confident that it is getting what it paid for, and that the taxpayer is sure it is getting a fair deal now and over the longer term.
In order to bring about that change I am announcing the Government’s intention to conduct a broad-based engagement process with interested parties, led by the Treasury, to bring forward proposals for a new approach in using the private sector in the delivery of public assets. In considering what the future model should be it will be important to learn from the past and make full use of the wealth of experience that exists across the public and private sectors, and internationally. Where PFI has been successful—in getting projects delivered to time and to budget, and creating the correct disciplines and incentives on the private sector to effectively manage risk—we will look to retain these benefits.
The Government will be launching a call for evidence on 1 December that aims to capture the learning and lessons of the past 20 years of PFI. We will look to use those lessons to help inform the development of a new model that addresses the concerns of PFI. We invite those across the private and public sector that have strong ideas on how the future model should work to come forward with proposals and contribute to the development of a new delivery model.
Marine Conservation Zones
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
As part of the Government’s commitment to implementing in full the provisions of the Marine and Coastal Access Act, we are creating a network of national protected areas in British seas to ensure our underwater wildlife flourishes in years to come. We are clear that looking after the wildlife and habitat in our seas is just as important as looking after those on land.
The Government’s first step to identifying new marine conservation zones (MCZs) in English waters was taken forward through four regional MCZ projects managed by the statutory nature conservation bodies, who are Natural England and the Joint Nature Conservation Committee. The regional projects provided their recommendations for proposed sites for MCZs on 8 September. These have been reviewed by the independent science advisory panel (SAP) and their advice to the SNCBs and DEFRA is being published today on DEFRA’s website.
The Marine and Coastal Access Act requires the establishment of a network of conservation sites in the UK marine area. In English waters the network will comprise European marine sites, sites of special scientific interest, sites designated under the Ramsar convention and marine conservation zones (MCZs). The Act requires that the network must conserve or improve the UK marine environment and protect a range of representative features.
The regional MCZ projects have done excellent work in bringing stakeholders together and making site recommendations, but it is clear from the SAP’s advice that there are a number of gaps and limitations in the scientific evidence base supporting the MCZ recommendations.
It is important that we get this right. It is vital that we have an adequate evidence base for every site if we are to create successful well-managed MCZs. An adequately robust evidence base will be essential when we come to implement management measures.
DEFRA will therefore be commissioning significant additional work to support MCZ designation including an in-depth review of the evidence base for all the regional projects’ site recommendations and committing additional resources to carrying out seabed and habitat monitoring.
Protecting our marine environment is essential and the Government remain fully committed to establishing MCZs to contribute to an ecologically coherent UK network. However, the need to strengthen the evidence base for the MCZ recommendations means this is going to take longer than the ambitious target first put forward. We are likely to be able to designate some MCZs fairly quickly where the supporting evidence is adequate. However, for others we anticipate that more investigation will be needed before they can progress towards designation.
Natural England and the Joint Nature Conservation Committee will provide the MCZ impact assessment and their formal advice in July 2012. This is six months later than previously planned and this revised timetable will enable them to address the recommendations from the independent review of the evidence process for selecting marine Special Areas of Conservation (published July 2011) and take account of any further evidence obtained from the work that DEFRA is now commissioning. We will give careful consideration to all the advice received before undertaking formal public consultation on MCZs by the end of 2012. This consultation will include all sites recommended by the regional projects with clarity on how and when work on them will be taken forward. It is envisaged that the first MCZ designations will take place in 2013.
DEFRA and delivery partners will work together ensuring that early management measures are put in place to provide effective levels of protection for designated sites and continuing to build the evidence base for future designations. DEFRA will also take the opportunity, working with stakeholders and SNCBs, to look at other marine features which may benefit from spatial protection.
This phased approach to designation will also allow more scope to shape the English network taking account of sites being considered by the devolved Administrations and neighbouring member states.
Natural Capital Committee
(12 years, 11 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
The natural environment White Paper, published on 7 June 2011, set out the Government’s intention to establish an independent Natural Capital Committee. It will commence its work in early 2012. As part of this, I will be making appointments to this new committee, and these will be advertised shortly.
The natural environment White Paper sets out our commitment to putting natural capital at the centre of economic thinking, and at the heart of the green economy. The Natural Capital Committee will enable us to achieve this goal by advising the Government on the state of natural capital in England. The Committee will report to the Economic Affairs Committee, chaired by the Chancellor of the Exchequer.
The Committee will:
Provide advice on when, where and how natural assets are being used unsustainably.
Advise the Government on how they could prioritise action to protect and improve natural capital, so that public and private activity is focused where it will have greatest impact on improving wellbeing in our society.
Advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital.
Further information on the natural environment White Paper can be found on the DEFRA website.
UK Relations with Colombia
(12 years, 11 months ago)
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The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)
I wish to update the House on the UK’s developing partnership with Colombia, and the opportunities this provides to both our countries.
In last November’s Canning lecture, the Foreign Secretary set out his vision for a step change in the UK’s relationship with Latin America. As part of our re-engagement with the region, the relationship between the UK and Colombia is broadening and deepening. Colombia has the potential to be one of Latin America’s great success stories and we are working in partnership with the Colombian Government to help it achieve this aim. Colombia is already an emerging power with a diversified economy, a growing middle class and a strong, democratic central Government. Colombia’s economy grew by 4.3% in 2010, with similarly strong growth forecast over the next five years. It has achieved macroeconomic stability.
It is important not to forget the context in which this has taken place. Colombia is addressing a legacy of over 50 years of armed conflict. In the 1990s the country was on the brink of political, social and economic collapse. The numbers of paramilitary and guerrilla forces grew and Colombia endured increasing and apparently unstoppable violence, cocaine production and trafficking, poor economic performance and massive internal displacement. Colombia’s citizens suffered serious human rights abuses, including the extrajudicial killing of thousands of civilians by members of the armed forces.
A new Colombia is emerging. Since the 1990s, the security situation has changed dramatically. There has been significant reduction of cocaine production, while murder and kidnapping rates have sharply decreased. The FARC guerrilla group has been significantly weakened.
The country’s progress to date in dealing with these issues should be recognised, but we should not shy away from the scale of the remaining problems. High numbers of candidates were murdered in the months before last month’s local elections. Too many Colombian soldiers continue to lose their lives at the hands of the FARC. Large numbers of alleged cases of extra judicial killings are yet to be prosecuted. Deadly attacks on human rights defenders have increased. Making progress in these areas is fundamental to Colombia realising its full potential.
The Colombian President, Juan Manuel Santos, stated his strong commitment to reform and modernisation in his inauguration speech in 2010. He has set out an ambitious programme in the areas of governance, equality, prosperity and security and committed to a policy of zero tolerance of human rights abuses. President Santos has improved relations with neighbouring countries like Ecuador and Venezuela and enhanced the active and constructive role Colombia plays internationally.
We have already seen important examples of these pledges being put into practice. The Santos Government have passed the flagship Victims and Land Restitution Law, which aims to return land to millions of displaced people and compensate victims. The state intelligence agency (DAS), which had been responsible for some of the worst human rights abuses, has been disbanded. In September, in a landmark judgment, its former head was found guilty of criminal conspiracy for providing right-wing militias with lists of leftist activists and trade union leaders, some of whom were subsequently killed or imprisoned. The rate of prosecutions for extrajudicial killings has risen sharply.
Colombia is at a pivotal moment of change at which it enjoys the leadership of a strong president with a strong mandate, with whom we share common values. The UK is taking the opportunity this offers to develop further our close relationship with Colombia.
Prosperity—Partnership for Growth
Promoting trade is vital for the UK’s economy and prosperity. Our approach is to ensure that Colombia’s economic growth, development, human rights and the rule of law are complementary and mutually reinforcing.
At present Colombia is only the UK’s fifth largest export market in Latin America. The export of UK goods to Colombia grew over 30% in 2010 and has grown even faster in the first half of 2011. But there is more potential to be realised. We support the EU/Andean multiparty trade agreement, which will help to increase our commercial exchanges. Education, science and innovation are central to the growth of both our economies. Colombia has pledged $89 billion for investment in these sectors by 2015. Educational exchange will be a central part of our relationship. We will explore opportunities to develop partnerships between UK and Colombian research institutes and spin-off companies.
Human Rights—Shared Values
We welcome the efforts of the Santos Government to address human rights abuses through a wide-ranging reform programme and a national human rights policy, working with civil society and the international community. This commitment has already translated into an improved dialogue with civil society, better relations with the judiciary and an impressive legislative record.
We have long been a strong advocate of human rights improvements in Colombia and a close partner of the Colombian Government and civil society in delivering them. This is a central part of our relationship and will not change.
Very serious problems remain, on which we encourage further progress. This includes ensuring the security of human rights defenders, protecting the cultural and territorial rights of indigenous groups, tackling impunity and improving access to justice.
Security and International Partnerships—Common Purpose
At the UN and elsewhere, the UK and Colombia continue to have a strong partnership on international security matters and on counter narcotics. We are working together closely at the UN Security Council.
Counter-narcotics work in Latin America is an integral part of the UK’s drugs strategy. Colombian cocaine poses a direct and significant threat to the UK. With our help, in recent years Colombia has arrested high-profile drugs traffickers, dismantled organised crime networks and seized over 25 tonnes of cocaine per year. Our support for this work will continue.
We are developing our partnership to achieve shared objectives on other international issues such as climate change and biodiversity. We work together in international fora to pursue green growth, combat climate change and secure our energy supplies for the long term. We are both committed to a legally binding international climate agreement and have strategies for delivering low carbon growth.
Our relationship with Colombia has long historical roots and is broad and rich in substance. It is predicated on our common aim of improving prosperity and security in the UK, Colombia and further afield. The Government look forward to developing our broad-based relationship further and the visit of President Santos to the UK later this month will make a significant contribution to this process.
Misuse of Drugs
(12 years, 11 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I am pleased to announce that the final version of the joint Working Protocol, developed and agreed between this Government and the Advisory Council on the misuse of drugs, has been deposited in the House Library today.
The new Working Protocol sets out the framework within which the Government and the Advisory Council commit to engage in the provision and receipt of its expert advice to Government on drug-related issues; maintain the expertise and membership of the Council; and intend to work together under the new power under the Misuse of Drugs Act 1971 to invoke temporary control of a new and emerging psychoactive substance to help prevent harm.
Hon. Members may wish to note that a draft of the protocol was made available (DEP2011-0598) to the House to help inform the scrutiny of related provisions in the Police Reform and Social Responsibility Act 2011.
I am pleased to inform the House that the Government and the Council will continue to embed working practices in accordance with the Working Protocol. The Working Protocol will support the Council in the delivery of its work programme that addresses both the work priorities set by Government as well as work of its own volition. The Council has recently delivered a thematic report on new psychoactive substances, which I commissioned, and that will now inform a cross-Government strategic response to this problem. It is also working to provide expert advice to deliver recovery based support to dependent users, which is central to this Government’s drug strategy.
Professor Les Iversen, chair of the Advisory Council, and I welcome the protocol in supporting our respective roles and responsibilities. At the heart of the protocol is a shared commitment to ensuring that the best evidence-based advice is available to Government on drug misuse, working together with the common purpose of reducing drug-related harms in the UK.
High Court and Court of Appeal Civil Division (Fees)
(12 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I have published today a consultation paper detailing proposals to increase fees in the High Court and Court of Appeal Civil Division.
These two jurisdictions hear the most complex civil court cases, and are particularly resource-intensive to run. The fees structure does not currently reflect the cost of providing services in these courts, meaning that there is a significant gap between costs and fee income. We propose to make targeted changes to these structures, affecting around 30 fees, in order to align more closely costs and income. Taken together, the proposals would reduce the current taxpayer contribution to HMCTS by £12 million to £14 million.
The cost of running the civil and family courts is currently around £612 million a year. Of this amount, 80% is funded through court fees with the remaining 20%, around £121 million, funded by the taxpayer. The Government’s long-term aim is to reduce this taxpayer subsidy by ensuring that fee income covers 100% of the cost of providing civil court services, minus the income foregone to the remission system. This is a system of fee waivers and reductions which ensures that access to justice is preserved for the least well off; around 160,000 fee remissions are granted per year.
Reducing the taxpayer subsidy of the courts service will be achieved through a combination of cost reductions (for example, reform of the courts estate, changes to civil and family justice processes) and fee increases. This will offer a fairer system to the taxpayer by targeting their contribution where it is most needed, and will ensure that, as far as possible, users pay for the service they receive while access to justice is protected for the most vulnerable.
As the cost of running civil court services is projected to decrease due to planned efficiency savings taking effect, it would be premature to increase all civil court fees to cover costs in a single round and risk recovering more than the cost of running the service. Instead, we propose to make phased and measured increases to fees over the short to medium term in order to balance correctly cost reduction and fee increases. My Department has already taken several such steps:
September 2010—inflationary increases to fees paid in private family cases, which projected an increase in fee income of around £6 million per year.
April 2011—inflationary increases to most civil, family and non-contentious probate court fees since each fee’s last increase, which is projected to increase court fee income by around £21 million per year.
This consultation paper represents the next step in this strategy. The paper contains 17 proposals affecting just over 30 civil fees in the High Court and Court of Appeal Civil Division, focusing on areas where there is a noticeable gap between fees and the cost of providing services in particular cases. The proposals cover diverse areas of work in these jurisdictions; the most notable are:
introduction of higher bands of issue (entry) fees in the High Court. The current highest issue fee paid is £1,670, for money claims over £300,000. We propose to add further bands, meaning that the highest entry fee paid would be £10,000, for claims over £l billion;
introduction of time-related hearing fees in the High Court and Court of Appeal Civil Division to reflect the increased cost involved in providing longer trials. The current hearing fee in the High Court is £1,090; we propose to introduce banded fees based on the time a court hearing is projected to last. The highest proposed fee is £10,900, for a case which lasts over 10 days.
Making increases in this way will mean that those whose cases consume a greater resource in court will pay more proportionally for the cost of processing their case, while the remission system remains in place for those who cannot afford to pay fees.
It is available online at http://www.justice.gov.uk/consultations.
Rail Reform
(12 years, 11 months ago)
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The Secretary of State for Transport (Justine Greening)
Our railways are currently the most expensive in Europe. That is something we can and must tackle. The recent review by Sir Roy McNulty found scope to cut rail costs by 30%—up to £l billion a year. My Department is committed to working with the rail industry to develop a strategy to deliver a better value railway for the benefit of passengers, taxpayers and the wider economy.
In furtherance of that strategy, my Department has undertaken to develop and publish detailed proposals on delivering a sustainable railway including reform of Network Rail. I am today announcing my intention to publish a Command Paper that sets out those proposals early next year.
It will allow time for greater consideration of other issues central to the question of rail reform. This will also allow the Command Paper to reflect properly the consequences of my decision following our consultation on a national high-speed rail network.
As part of the development of a comprehensive strategy for rail, and alongside the Command Paper, I also plan to consult on the scope to devolve responsibility for some rail passenger services in parts of England to sub-national bodies, and on issues relating to the review of fares and ticketing announced in May. In addition, the ORR expects to consult later this year on possible changes to its role, particularly in respect of future franchises.