House of Commons

Monday 19th December 2011 Commons Chamber

Monday 19 December 2011

The House met at half-past Two o’clock

Prayers

Monday 19th December 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 19th December 2011 Commons Chamber

The Secretary of State was asked—

[Caroline Dinenage (Gosport) (Con)]

2. What expertise women can provide and which roles they can fill on board Royal Navy submarines.

[Harriett Baldwin (West Worcestershire) (Con)]

6. If he will take steps to encourage women in the Royal Navy to apply to serve on Vanguard and Astute class submarines.

[The Secretary of State for Defence (Mr Philip Hammond)]

I announced to the House on 8 December that women will be recruited into the Royal Navy submarine service. All submariner roles will be open to women, and this new opportunity to serve will enlarge the talent pool from which the submarine service will recruit. All male and female applicants will be assessed against the same criteria. All applicants will receive the same training. I am confident that there will be sufficient interest from female personnel to serve on board Royal Navy submarines.

[Caroline Dinenage]

I welcome that news from the Secretary of State and the confirmation of what many of us know: that women can do everything that men can do. [Hon. Members: “Hear, hear!”] But better. Can the Secretary of State please expand on when it is most likely that women will first be put into training and service on submarines?

[Mr Hammond]

Let me say, Mr Speaker, that if my wife is to be believed, not only can women do everything that men can do, but they can do two things at a time, while men can do only one thing at a time. I hope that this will contribute to the efficiency gains that we need to make in the Royal Navy and elsewhere. I can tell my hon. Friend that female officers will serve on Vanguard class submarines from late 2013, followed by ratings in 2015, and that women will be able to serve on Astute class submarines as both officers and ratings from about 2016.

[Harriett Baldwin]

I pay tribute to all those who have the fortitude to serve on submarines underwater for many months at a time, particularly at this time of year. Can the Secretary of State say whether there will be any cost to the public purse from adapting submarines to accommodate both sexes?

[Mr Hammond]

Yes, there will be an estimated cost of about £3 million in total, to provide appropriate accommodation and emergency air supplies, so that should any female submariner be found to be pregnant while on board, she will be able to breathe from a discrete air supply until she can be medically evacuated.

[Nicholas Soames (Mid Sussex) (Con)]

Have any trials been conducted for this project? I generally welcome the principle entirely, particularly given the great success of women on board all other ships, but does my right hon. Friend not think that it might be worth while conducting a lengthy trial in simulated conditions before the plan goes ahead?

[Mr Hammond]

I would say two things to my right hon. Friend. First, the only reason why women were not eligible for the submarine service was that until recently the best medical evidence suggested that there could be a risk to foetal health. It is now clear that that risk does not exist. I would also say that the United States navy has made the change already, and has found the arrangements to be perfectly satisfactory.

[Amber Rudd (Hastings and Rye) (Con)]

3. What food and entertainment his Department plans to provide to service personnel on operations during the Christmas period.

[The Minister for the Armed Forces (Nick Harvey)]

Where the security situation allows, troops and support staff in Afghanistan will be served an English breakfast, a traditional turkey lunch with trimmings and a buffet supper. The Scots band will tour UK bases and there will be a carol concert in Camp Bastion. A variety of arrangements are similarly in place for those deployed elsewhere. Christmas decorations have been delivered to Camp Bastion already, and boxes of welfare and morale-boosting goods have arrived from UK4U, in addition to what is provided by the MOD.

[Amber Rudd]

Last weekend I spoke to my constituent Valerie Hindson, whose son, Lance Corporal Joel Hindson, is serving with 1st Battalion The Princess of Wales’s Royal Regiment in Afghanistan. She is concerned about Christmas provision for him, because he is not at Camp Bastion, but out at a patrol base. Can my hon. Friend reassure me, and the friends and family of many brave men and women, that extra effort will be made to reach those out at patrol bases, as well as those at Camp Bastion?

[Nick Harvey]

Yes, I can certainly give my hon. Friend that assurance. Special Christmas packages are going out to all forward operating bases and patrol bases. In most cases there is a chef on site and proper catering facilities to ensure a Christmas lunch. That will not be possible for a small number of people in very remote locations, but even in those cases, special Christmas provision is being made.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

For purposes of comparison, will the Minister tell the House how much will be spent on food and entertainment for Ministry of Defence Ministers and officials over the same period?

[Nick Harvey]

To the best of my knowledge, no such funds are being spent at all.

[Bob Stewart (Beckenham) (Con)]

As the patron of the Forces Children’s Trust, which looks after service orphans and widows, may I gently remind the Minister that it would be nice if the Ministry of Defence were to encourage all units, when they are having their Christmas celebrations, to look after the people who have lost loved ones within the unit? I am sure that that is happening, but a gentle reminder would not go amiss.

[Nick Harvey]

My hon. Friend makes a good point. I share his confidence that commanding officers and those responsible for the welfare of troops will have this in mind, but when there are opportunities to offer such reminders, we will certainly do so.

[Nic Dakin (Scunthorpe) (Lab)]

4. What steps he is taking to mitigate the effects of redundancy on those leaving the armed forces. 7. What steps he is taking to support service personnel through the process of resettlement.

[Toby Perkins (Chesterfield) (Lab)]

13. What steps he is taking to support service personnel through the process of resettlement.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

In addition to the tax-exempt compensation and, for many, an immediate pension, the welfare of those leaving the services is very important to the Ministry of Defence. We have in place a robust and effective resettlement system that helps our service personnel on a number of levels, and allows them to serve knowing that they will receive professional and tailored assistance on leaving. The MOD fully understands that making the transition from the armed forces into civilian life can be daunting, and we remain committed to supporting service leavers in taking this important step.

[Nic Dakin]

I thank the Minister for his reply. Given the increased challenges for those going through the resettlement process, will he commit to including an update on the success of the process in the Secretary of State’s annual report on the military covenant?

[Mr Robathan]

That is an extremely good point. The hon. Gentleman may be aware that we estimate that 96% of ex-forces personnel find employment within 12 months, and that 93% of the total do so within the first six months. He has made a good point, however, and we will see whether it is possible to do as he asks.

[Susan Elan Jones]

May I ask the Minister whether the new Cabinet Committee will allocate new funds to tackle the important issue of homelessness among veterans?

[Mr Robathan]

We are very concerned about anyone being homeless, and the Ministry of Defence is especially concerned about homeless veterans. One should, however, make absolutely certain that one deals in facts. While any individual being homeless is a concern, we reckon that approximately 3% of those who are found homeless on the streets in the United Kingdom are ex-service personnel. Indeed, I commend to the hon. Lady the organisation Veterans Aid, based in Victoria, which I visited recently. It does fantastic work with ex-service personnel who are homeless.

[Toby Perkins]

The country is already facing a significant housing shortage, massive increases in unemployment and real difficulties relating to primary school intake numbers. Is this not absolutely the worst time for 17,000 of our service people to be entering that housing and jobs crisis? Is that not a pretty shabby way to treat people who have served our country so well?

[Mr Robathan]

May I gently say to the hon. Gentleman that we are not happy to be making people redundant from the armed forces? Unfortunately, however, we have a serious financial situation in this country, as I think he and everyone on the Opposition Benches will recognise, and we have to address that. Regarding housing, he will know that my right hon. Friend the Minister for Housing and Local Government has announced that he is in discussion with local authorities to ensure that ex-service personnel get to the front of the queue, because they might have local connections. He is consulting on that issue at the moment. Regarding employment, I have just said that ex-service personnel are eminently employable and that they are valued by the employment market, and I think that those leaving the services will, God willing, not find it too difficult to find a job.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Over Christmas, will my right hon. Friend find time to think about the difference between those in the armed forces who are made redundant and those in the Ministry of Defence civil service who are made redundant? Members of the armed forces are frequently made redundant compulsorily, but that has not happened to a single civil servant so far.

[Mr Robathan]

My right hon. Friend will know that there have been a large number of applications from civil servants for the voluntary early release scheme. That is why very few people are likely to be compulsorily made redundant at the moment. Those in the armed forces have been less forthcoming with applications for voluntary redundancy, but only 40% of those taking redundancy are doing so compulsorily, the rest having applied for it.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend will know that it tends to be early service leavers rather than those who have served their full commissions who feature disproportionately in criminal justice and homelessness figures and mental health statistics, yet the resettlement facilities—such as they are—are focused very much on those who have served the armed forces for a long time. What can we do to redress the balance?

[Mr Robathan]

My hon. Friend speaks from his own personal experience, and he is absolutely right that early service leavers are often those who have the greatest difficulty. I would like to thank him again for his “Fighting Fit” report on the mental health needs of ex-servicemen, and indeed for his recent work on prosthetics. In fact, everyone—even someone who has served for a very brief period—gets some resettlement advice. Inevitably, those who have served for a brief period have less need to adjust, if I may put it that way, because their service has been so short.

[Mr John Redwood (Wokingham) (Con)]

Will the Minister look again at ideas put forward by me and others in the past to allow service personnel to buy a property while still serving in the armed forces, or to build housing equity before they leave, in order to avoid the problem of homelessness?

[Mr Robathan]

My right hon. Friend raises an excellent point. There are schemes that we are taking forward to ensure that people can get priority in some ways. For instance, my right hon. Friend may not know that until recently—in fact, this is still the case—a BFPO address may not count as a proper address for creditworthiness; we are taking steps to change that.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Daily Telegraph reported over the weekend that a further 150 trainee pilots may be sacked and have to go through the resettlement process. Will the Minister confirm that that is not correct?

[Mr Robathan]

I understand that the story to which the hon. Lady refers is, in fact, a rehash of a previous story. We very much regret making trainee RAF pilots redundant—but by reducing the number of aircraft we have reduced the number of pilots that we need. We have no plans for further redundancies from the RAF’s flying training pipeline.

[Mr Edward Leigh (Gainsborough) (Con)]

There are widespread reports in today’s press that the Government are planning a large cull of senior officers. I know it is a bit of a joke that there are now more admirals in the Royal Navy than major warships—but can the Government not solve this problem by increasing the number of warships instead of cutting the number of admirals?

[Mr Robathan]

I am grateful to my hon. Friend for his pre-Christmas question. Unfortunately, we have a slight problem with paying for the number of warships. I am sure we will bear it mind, but I have to say that the reduction in the number of senior officers has been spoken about at great length, including in the recent report by Lord Levene.

[Jeremy Corbyn (Islington North) (Lab)]

5. What expenditure on the Trident replacement he expects to have incurred by 2016.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

We expect to spend £3.9 billion on the successor submarine programme by the maingate decision-point in 2016. We have deferred the decision on the future warhead until the next Parliament. We are spending around £900 million a year at AWE—the Atomic Weapons Establishment—on capital investment and running costs to ensure that we can sustain the capabilities to maintain the current stockpile. As a consequence of this sustainment, we will also have the capability to design and produce a new warhead, should that be required. We expect to spend around £8 million over the next three years to examine the condition of the physical infrastructure at the naval bases and current communications systems for the successor submarines.

[Jeremy Corbyn]

By the Minister’s own figures, the Government are proposing to spend £5 billion on the submarine replacement and the preparations for a new missile system from AWE Aldermaston, which means that after the next election the new Parliament will be confronted with the decision whether to renew the Trident system, having already spent £5 billion on it. Does the Minister not think that we are walking—indeed, sleepwalking—into a massive expenditure, after that, of £25 billion on a replacement, plus the running costs? Is it not time we brought this vanity project to an end and cancelled the Trident system?

[Peter Luff]

No, I do not think that at all. In fact, not spending that money would prevent us from preserving the option for the next Parliament to take the decision. The hon. Gentleman is fond of pointing out the problems in respect of the capability for the nuclear deterrent, but let me assure him that the work we are undertaking will have benefits for other classes of nuclear submarines in future— particularly in respect of the primary propulsion systems, for example with the PWR3. There are real benefits from doing this work—not just for the security of the nation in the short term, but for the long term as well.

[Dr Julian Lewis (New Forest East) (Con)]

Given that both the Polaris and Trident submarines came in on budget and on time, is that not a good precedent for the successor system? Will the Minister take the opportunity to repeat in resounding terms the assurance that the Prime Minister gave to Conservative MPs when the coalition was formed—that Trident will be renewed, whether the Liberal Democrats like it or not?

[Peter Luff]

I believe that, notwithstanding the views of the hon. Member for Islington North (Jeremy Corbyn), no programme is subject to greater scrutiny in the House than the nuclear deterrent. That is one of the reasons for the accuracy of our costings. Let me assure my hon. Friend that the primary responsibility for our nation is the security of the country, that the nuclear deterrent is the ultimate guarantee of the country’s security, and that we stand firmly behind it.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Will the Minister tell us how many Government staff are working on his review of alternatives to the Trident system, when he now expects the review to end, and whether he has reached a final conclusion on whether its findings will be published?

[Peter Luff]

I cannot tell the hon. Gentleman off the top of my head exactly how many Government colleagues are involved in the review, but I will write to him about it. What I can tell him is that its findings will be available towards the end of next year for the Prime Minister and the Deputy Prime Minister to consider, and that, given that it will constitute a full and frank exploration of the alternative systems at a highly classified level, there are no plans to publish either the report or the information on which it draws. However, we are a long way from the end of the review, and it is therefore premature to speculate on how the final assessment might be used once it has been completed.

[Tessa Munt (Wells) (LD)]

What is the point of having a review if no one, except a select few, has an opportunity to look at its findings? Should not the Liberal Democrats, in particular, be allowed some access to that information? [Interruption.]

[Peter Luff]

As my hon. Friend the Minister for the Armed Forces says, I was of the view that the Deputy Prime Minister was a Liberal Democrat—and he will see the report.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

8. What arrangements were included in the recent memorandum of understanding with Turkey.

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

I signed a defence industrial co-operation memorandum of understanding with the Turkish Ministry of National Defence during the state visit of President Gül. The memorandum provides for a committee to be formed, to meet at least annually, and to be staffed by the Ministry of Defence, the UK Trade and Industry Defence and Security Organisation, and the Turkish Ministry of National Defence. It also establishes a framework for the potential acquisition of common defence equipment, for scientific and technical co-operation to meet the needs of both our armed forces, and for the development of joint projects.

[Eric Ollerenshaw]

Is that memorandum simply part of a wider recognition by the Government of the increasingly pivotal role that Turkey is gaining for itself in world affairs?

[Mr Howarth]

Turkey is indeed an important ally of the United Kingdom. Like us, it is an important member of NATO, and given that its economy is growing at five times the average rate of the eurozone, it is also an important economic player. In the context of defence, there is a great deal that we can exchange with Turkey, and I am delighted that a number of British companies, including BAE Systems, are investing in joint ventures there.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Minister agree that Turkey and Israel are the only two functioning democracies in the region—and will he therefore increase contact and co-operation with the military in both those countries, particularly with a view to containing, or indeed confronting, an Iranian nuclear bomb threat?

[Mr Howarth]

I can tell the right hon. Gentleman, who has considerable experience of foreign affairs, that we already co-operate closely with both Turkey and Israel. In this instance, however, I think that Turkey is the important country, and I am delighted that the treaty, which was also signed by my right hon. Friend the Secretary of State at the time of President Gül’s visit, will give United Kingdom forces access to training facilities in Turkey.

[Mr Julian Brazier (Canterbury) (Con)]

Will my hon. Friend join me in commending the very restrained and at the same time statesmanlike way in which the Turks have been handling the hideous problem on their borders that has been created by the barbaric behaviour of the Syrian Government?

[Mr Howarth]

Indeed. My hon. Friend has drawn our attention to a serious matter of concern to all of us in the House, and indeed to the wider community—what is taking place in Syria. The Turks are clearly important and concerned players because they share a border with Syria, and we are watching developments there with close interest.

[Jonathan Ashworth (Leicester South) (Lab)]

9. What recent discussions he has had on armed forces pay; and if he will make a statement.

[The Secretary of State for Defence (Mr Philip Hammond)]

I provided oral evidence to the Armed Forces Pay Review Body on 13 December. The discussion covered various aspects of the current remuneration package for members of the armed forces, as well as the broader economic context.

[Jonathan Ashworth]

I thank the Secretary of State for his answer. He will, of course, be aware that the pay freeze and changes to pensions are causing some concern, perhaps even anger in some quarters, not least among non-commissioned officers. Does he have any concerns in that regard, and does he have any contingencies in place should the changes to pensions and the pay freeze lead to an exodus of experienced personnel?

[Mr Hammond]

The Government recognise the unique and important role played by the armed forces, which is why we doubled the operational allowance to £5,280 tax free, why the incremental pay system will continue during and after the pay freeze, and why we have exempted the armed forces from the average 3% increase in pension contributions that public sector workers will pay. I recognise the concern that the hon. Gentleman expresses, and I have discussed it with the Armed Forces Pay Review Body. The proposals that the Chancellor announced in the autumn statement for continued pay restraint after the freeze include flexibility for the Ministry of Defence to address specific problem areas if we find we are losing, or failing to recruit, specialist staff.

[Mr David Nuttall (Bury North) (Con)]

What does my right hon. Friend think will be the effect on the morale of our armed forces personnel of their pay being frozen this year, while many people on benefits are being given a 5.2% increase?

[Mr Hammond]

My hon. Friend will recognise that by doubling the operational allowance for the armed forces, exempting them from the pension contributions increase and continuing the incremental pay system, we have sent a very important signal to them about the importance that we attach to them. I think that most members of the armed forces understand that we are facing some very tough decisions in order to get the MOD budget back on track and ensure a sustainable future for our armed forces, and that the restraint was necessary to achieve that.

[Mr Kevan Jones (North Durham) (Lab)]

Frozen pay, reduction in the pension and compulsory redundancies: can the Secretary of State explain how that squares with the Prime Minister’s statement in The Sun this morning that he intends to uphold the military covenant and support our servicemen and women?

[Mr Hammond]

I think that the hon. Gentleman was a member of the last Government, so he will be very clear about the scale of the financial problem that the MOD and the wider public sector face. The armed forces are playing their role in helping to correct the deficit and get this country back on track.

[Mr Philip Hollobone (Kettering) (Con)]

What discussions has my right hon. Friend had with the Department for Education about financial incentives to encourage retiring service personnel to take up teaching as a career, in order to get some self-respect and discipline taught to our young people in schools?

[Mr Hammond]

My hon. Friend will know that the Secretary of State for Education has announced the “troops to teachers” scheme. Work is ongoing to put the flesh on the bones of that proposal, and an announcement will be made in due course.

[Mr Jim Cunningham (Coventry South) (Lab)]

10. What assessment he has made of the likely effects on the defence sector of the aircraft carrier programme.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

Having visited Govan and Rosyth to see the Queen Elizabeth class carriers under construction, I know that the project is good news for the UK defence industry. It is anticipated that 7,000 to 8,000 jobs will be created or sustained at the tier 1 shipyards, with a further 2,000 to 3,000 jobs in the wider supply chain. Apprenticeship schemes have also been reinvigorated, with nearly 800 apprentices now involved in the project. Some £1.35 billion-worth of equipment subcontracts have been placed, the majority of which have been awarded to more than 75 different UK companies spanning the length and breadth of the UK. With an expected 50-year service life, there will be continued opportunities for UK companies to benefit from this project.

[Mr Cunningham]

I am sure that companies such as Rolls-Royce will welcome the Minister’s statement, but does he agree with the First Sea Lord that if a British aircraft carrier had been available during the Libyan mission, it would have been most cost-effective and efficient to use it?

[Peter Luff]

Actually, I do not fully agree with that. A carrier might well have been deployed, but the aircraft that were necessary to deploy the missiles we needed were the Tornados and Typhoons, and they did a first-rate job. That proved that the Government made the right judgment in the strategic defence and security review by deciding on a gap in respect of that particular capability.

[Sir Menzies Campbell (North East Fife) (LD)]

Does the Minister recall that an important factor in the decision to continue with the construction of the two aircraft carriers was the availability of the F-35, the joint strike fighter? Is he aware of reports that there is a delay in its development programme? What will be the impact on the effectiveness of the carrier force if there are no aircraft to fly off them?

[Peter Luff]

The world is full of rumours about the future of the F-35 programme; I hear a new one almost every day. It is true that a lot of questions are being asked, and those aircraft are very important to carrier strike capability, but I shall wait to see what actually happens, rather than joining in the speculation.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

In a written answer to me, the Minister put the estimated cost of converting one of the carriers to the catapult and arrestor system at about £1 billion. Can he therefore tell us whether the Chancellor’s announcement in the autumn statement of real-terms cuts in respect of procurement issues of almost £30 billion, extending into the first two years of the next Parliament, is apt, or whether the Prime Minister’s promise of a real-terms increase in defence spending of 1% will apply to this and other major projects?

[Peter Luff]

I can confirm that nothing has happened to our commitment to increase the equipment budget by 1% in real terms from 2015. I have to say that our job would be a great deal easier if the previous Government had not taken the decision to delay the carriers, thus adding an extra £1.3 billion of costs to the programme with no capability gain whatsoever.

[John Mann (Bassetlaw) (Lab)]

11. When he expects UK troops to be withdrawn from Afghanistan.

[The Secretary of State for Defence (Mr Philip Hammond)]

My right hon. Friend the Prime Minister told the House that UK force levels in Afghanistan will reduce from 9,500 to 9,000 by the end of 2012. By the end of 2014, the security transition will be complete and British troops will no longer be in a combat role. The UK and the international community are committed to Afghanistan for the long term, and a number of UK troops will remain after 2014, including in training roles at the UK-led Afghan national army officer academy.

[John Mann]

Does the Minister pay more attention to the German Foreign Minister, who wants us in Afghanistan for another 15 years, or to the people of Bassetlaw, who say that now is the time to bring our lads back home?

[Mr Hammond]

We have a clear plan for the completion of the mission in Afghanistan, which involves transitioning lead security responsibility to the ever more competent Afghan national security forces. That will be done over the next three years, resulting in the withdrawal of the overwhelming majority of our forces by the end of 2014 and the ending of our combat role. That is the position that most people in this country would want to see: a measured and properly controlled winding down of our involvement that protects the legacy that we have won with so much blood and treasure.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Will my right hon. Friend assure the House that any reduction in UK force strength in Afghanistan will be based on the improving situation on the ground, not on any political expediency?

[Mr Hammond]

The trajectory of the force draw-down to the end of 2014 will be determined by the evolution of events on the ground. No prior decision has been taken about the pattern of that draw-down other than that 500 troops will come out next year, as my right hon. Friend the Prime Minister has announced.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

It was widely reported in the press that the Secretary of State had proposed to the National Security Council a draw-down that was accelerated beyond that originally envisaged. Will he tell us what the time scale for decision making is in Afghanistan? I agree with him that this is a very complex theatre of operations, and we have an absolute duty to make things as right as we can as we exit from our combat mission in Afghanistan.

[Mr Hammond]

As the right hon. Gentleman will know, the National Security Council discussed strategy on Afghanistan last week and a number of different scenarios were considered. It is clear that we must have regard to the decisions that the United States has yet to make about the pattern of its force draw-down. We will want to look again at this issue once it is clear how and when the United States will draw down its forces, but we have made no fixed commitments, other than to reduce the force level by 500 next year and to be out of the combat role by the end of 2014.

[Bob Russell (Colchester) (LD)]

This time last year, 16 Air Assault Brigade was deployed to Helmand province. Many of those young soldiers were also there in 2008 and, based on the time line that the Secretary of State has given, I suspect that some of them be deployed yet again. However, none of those who joined the Army since February 2007 will be entitled to the Jubilee medal. Why not?

[Mr Hammond]

The simple answer is that the conditions of service requirement attached to that medal is five years’ continuous service. The hon. Gentleman is absolutely right that some members of 16 Air Assault Brigade might be deployed for one more Herrick tour before our operations in Afghanistan are complete, but the jubilee service medal is a separate issue and the conditions set for it are very clear.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

In this week before Christmas, our thoughts are with our forces who are separated from their families and in particular those families who continue to feel the loss of a loved one in Afghanistan.

The Bonn conference on Afghanistan cannot be considered to have been a strategic success. I am not blaming the Government for that failure—it was an international responsibility—and the Opposition remain committed to the Afghanistan mission, but for the Government, bipartisanship in Afghanistan cannot mean just getting agreement between the two parties in the coalition Government; it is also about persuading the public and Parliament. What else can the Secretary of State say about his early assessment of the levels of non-combat troop involvement from the UK that will be needed in 2015 in Afghanistan?

[Mr Hammond]

I am pleased to hear the right hon. Gentleman reiterate the Opposition’s support for the Afghanistan strategy, as it is vital that we go forward with a broad measure of consensus. On the post-2014 troop levels, no decisions have yet been made about the level of UK troops in a training, support and advisory role. We will want to take that decision nearer to the time, when we have seen what other international security assistance force nations propose to do and when the level of international funding for the Afghan national security force has been determined and committed to, so that the scale and competence level of ANSF forces can be seen clearly.

[Andrew Stephenson (Pendle) (Con)]

12. What steps he is taking to support research and development of military capability in the aerospace sector.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

I am committed to providing sustained support for science and technology across all aspects of defence. The Ministry of Defence has and will continue to invest in the aerospace sector, developing capability and undertaking research into new ideas. As part of that ongoing investment, I am pleased to announce today that we have placed a £40 million four-year research contract with BAE Systems to explore critical technologies and key systems integration for the UK’s next generation of highly capable air systems. The future combat air system research contract is expected to include significant benefits for the wider UK supply base.

[Andrew Stephenson]

I thank the Minister for that answer and, in particular, for the good news about BAE Systems. However, many companies based in Pendle and Lancashire are small and medium-sized enterprises. Will the Minister say a little more about what he is doing specifically to support SMEs in the aerospace sector?

[Peter Luff]

We have plans to do more to help SMEs and I had hoped to announce them in the White Paper that I was due to publish this month, but the pressure of Christmas business has delayed that until the new year. I can assure my hon. Friend that there will be good news in that for the SME sector and I also reiterate what I said in my original answer: the future combat air system contract will bring real benefits to small and medium-sized enterprises in the UK, including, I am sure, in my hon. Friend’s constituency.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister acknowledge that the British aerospace industry and sector are vital to British manufacturing and that the Department for Business, Innovation and Skills is at this moment conducting a rationalisation of procurement methods? Will he have an intelligent conversation with BIS about how procurement can be longer reaching and longer term in the defence industry?

[Peter Luff]

All my conversations with BIS are intelligent.

[Diana Johnson (Kingston upon Hull North) (Lab)]

14. What assessment he has made of the advice from the Armed Forces Pay Review Body; and if he will make a statement.

[Mr Speaker]

Now for an intelligent answer, from whichever Minister.

[The Secretary of State for Defence (Mr Philip Hammond)]

Apologies for the delay, Mr Speaker. The Armed Forces Pay Review Body reports annually to my right hon. Friend the Prime Minister and to me. Its next report is expected in early 2012.

[Diana Johnson]

In the 2010 election, the Liberal Democrats promised to raise the pay of our lowest paid soldiers by as much as £6,000. The coalition is now ignoring the Armed Forces Pay Review Body, which will mean a real-terms cut, and the operational allowance, as I understand it, will benefit only a third of our armed forces personnel. Should not promises made to our armed forces be worth more than another abandoned Deputy Prime Minister election pledge?

[Mr Hammond]

I have already said in answer to an earlier question that we have doubled the operational allowance. That is critical to troops on operations and is hugely appreciated. We have increased the pay of the lowest paid members of the armed forces, even during the pay freeze, by a fixed £250, which is a more significant percentage for those on the lowest pay levels. The hon. Lady can pontificate all she likes from the Labour Benches, but the problem that we are dealing with and that we have to deal with to give our armed forces the stability and confidence they want for the future is based on the legacy of debt from and undeliverable promises made by the previous Administration.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

15. What support is available at higher and further education level for young people who want to join the armed forces; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Further education support is provided to people who join the services, generally through apprenticeships which include nationally recognised vocational and academic qualifications. For those young people who wish to join the armed forces and have aspirations to continue in higher education, opportunities include the defence sixth-form college at Welbeck; bursaries and scholarships in secondary and further educational establishments; the defence technical officer and engineer undergraduate scheme; and cadetships for students reading degrees in specific professions, such as medicine or the law.

[Simon Hughes]

That is very welcome, but it is not as well known as it ought to be. Given that next month is the first cut-off date for people applying to go to university next year, will the Minister see if he can make sure that all those who have shown an interest in joining the armed services are told about the support opportunities open to them if they go into the services but also want to carry on in formal education?

[Mr Robathan]

I take the right hon. Gentleman’s point entirely and I agree with him, but those opportunities are quite well known. Some 41 years ago I took up a university cadetship at university, which was very welcome. People who wish to join the armed forces now know that they can get assistance at university and at other educational establishments.

[Jim Shannon (Strangford) (DUP)]

I, too, thank the Minister for his response. I am a member of the armed forces parliamentary scheme who has had the opportunity to attend many Army camps at locations across the United Kingdom. We were told that the MOD had a bursary scheme for those aged 16 to 18, and none of us was aware of that. Can the Minister assure us that it is his intention to raise awareness of the scheme across the whole of the United Kingdom, including Northern Ireland?

[Mr Robathan]

Certainly. We are not contemplating broadening the scheme to the armed forces parliamentary scheme, but bursaries do exist. I take the hon. Gentleman’s point on board, as I did the previous point. We should give the bursary scheme good publicity. However, I think he will find that there is considerable over-subscription to the bursary scheme, not under-subscription, because young people know about it and are a bit quicker than I am.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

16. What support his Department provides to armed forces veterans with mental health disorders.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Further—wrong one.

[Mr Speaker]

No. 16.

[Mr Robathan]

Yes. We will continue to work closely with the Department of Health on the mental health care of our former service personnel. That includes implementation of all the recommendations in the “Fighting Fit” report produced by my hon. Friend the Member for South West Wiltshire (Dr Murrison).

[Mr Speaker]

I am glad the right hon. Gentleman’s sense of humour has not deserted him.

[Stephen Phillips]

I am grateful to the Minister for that answer. Martin Pratt, about whom I wrote to my right hon. Friend in November, was a constituent of mine before his untimely death. He served his country in the SAS and his experiences were sufficiently traumatic that, long after he had left the Army, he suffered from severe post-traumatic stress disorder which ultimately led to alcoholism and the death of a much loved husband, father and grandfather. It seems clear that there is little understanding in the civilian medical community of such cases of later-life PTSD in military personnel, and very little joined-up thinking between agencies responsible for the care of veterans. I hope that my right hon. Friend can assure Martin’s family and the whole House that he will look into this case in detail with his colleagues in the Department of Health so that the lessons that plainly need to be learned are learned.

[Mr Robathan]

My hon. and learned Friend makes a good point. He will understand that it would be invidious of me to comment on an individual case, but he will understand that I have a particular regimental interest in Mr Pratt. This is a joint venture between the MOD and the Department of Health, and my hon. and learned Friend should have received—or he will receive it shortly; I have a copy here—a letter from the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), explaining what should have been available and what may not have taken place in this particular case. My hon. and learned Friend must see that letter himself. We are very concerned about this. We are pursuing the “Fighting Fit” report from my hon. Friend the Member for South West Wiltshire and we are putting in place many measures that will assist people who have PTSD and other mental health problems.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

At the end of last year, the strategic defence and security review announced 35 mental health nurses. Experience shows us that many of the cases that have been diagnosed as either PTSD or veterans with mental health problems date back to the first Gulf war. How confident is the Minister that we will have enough appropriately qualified nurses, and is it the intention to be able to cover all parts of the country?

[Mr Robathan]

It certainly is the intention to cover all parts of the country. I think that the hon. Gentleman shares my concern that people with mental health problems who have been in the services and who have been affected by their service are given particular care by the Department of Health, assisted by the MOD, and we are determined that that should happen. The extra mental health nurses are being rolled out and I think that most are already in place. That is a Department of Health responsibility, but most, if not all, are already in place, and we certainly take this very seriously. I do not know whether the hon. Gentleman has visited the King’s centre for military health research, but I recommend that he does so and that he talks to Professor Wesseley—the right hon. Member for East Renfrewshire (Mr Murphy)will know him—who does an excellent job there on our behalf dealing with mental health.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

17. What support his Department is providing to the families of service personnel during the Christmas period.

[The Minister for the Armed Forces (Nick Harvey)]

We aim to provide the highest level of welfare support to the families of deployed service personnel throughout the year. In addition, local commanders are able to use the family welfare grant to support families with funding for gatherings, children's Christmas events, day trips, pantomimes and coffee mornings. For example, 20th Armoured Brigade has set aside some £16,000 for that purpose. Unit welfare staff will remain on hand to provide help and support throughout the Christmas period.

[Oliver Colvile]

Earlier today, the military wives choir, which is based in my constituency, released its “Wherever you are” single, which I for one very much hope will be the Christmas No. 1. Will my right hon. Friend be willing to join me in urging the Treasury to give the VAT proceeds to its nominated charities, the British Legion and the Soldiers, Sailors, Airmen and Families Association?

[Nick Harvey]

I very much endorse the enthusiastic welcome that my hon. Friend has given the military wives choir, which comprises constituents both from his Plymouth constituency and my North Devon constituency. We wish it well with its “Wherever you are” single released today and hope that it will be the Christmas No. 1. Matters of VAT must be addressed to the Chancellor.

[Mr Speaker]

I am relieved that the Minister of State did not burst into song, but that may happen later in the day—who knows?

[John Glen (Salisbury) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Defence (Mr Philip Hammond)]

My departmental responsibilities are to ensure that our country is properly defended, now and in the future, through the delivery of the military tasks for which the MOD is mandated; that our service personnel have the right equipment and training to allow them to succeed in the military tasks; and that we honour our armed forces covenant. In order to discharge those duties, I have a clear responsibility to ensure that the Department has a properly balanced budget and a force generation strategy and a defence equipment programme that are affordable and sustainable in the medium to long term.

I am deeply aware that our people are the greatest assets of the armed forces, and I am sure that all Members of the House will want to join me in wishing all of them, especially those who are away from home over the festive period, a happy and a safe Christmas.

[John Glen]

I thank my right hon. Friend for his answer. Will he update the House on the status of the service chiefs' review of force generation and sustainability, which among other things was looking at harmony guidelines? I am sure that my right hon. Friend will be aware that if he adopted the Navy’s harmony guidelines, he would secure a significant saving across the MOD.

[Mr Hammond]

The single service chiefs are reviewing force generation issues in the light of the proposed change structure of the armed forces. The issues around harmony are different in the three services, and it is right that the individual services develop harmony guidelines that are right for their conditions and allow them to operate within their single service budgets.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

The Minister with responsibility for veterans has confirmed the proposals to cut MOD police by 50%, which has been described by the Defence Police Federation as “irresponsible and ill thought out”. There will be real worries about the impact on the protection of munitions stores and barracks. Will he guarantee that there will be no cut in MOD police numbers at the most sensitive of bases, particularly Faslane and Coulport?

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Security, particularly of our nuclear installations, is absolutely at the top of our list of priorities, but that does not mean that we cannot organise things better, which is what we are looking at. May I just say to the right hon. Gentleman that we struggle with the huge black hole in the money that he left us?

[Mr Peter Bone (Wellingborough) (Con)]

T2. If there was a terrorist attack on this country and the Prime Minister was killed, what would be the Secretary of State’s role in co-ordinating a military response and who would be in charge of the country? Would it be the Deputy Prime Minister?

[Mr Hammond]

As you would expect, Mr Speaker, robust arrangements are in place for dealing with any such contingency, but I will not talk about them in the Chamber today.

[Angus Robertson (Moray) (SNP)]

Last week the Russian aircraft carrier Admiral Kuznetsov and its support group were moored off the north-east coast of Scotland. Will the Secretary of State confirm that not a single fixed-wing UK maritime patrol aircraft was available and no appropriate naval vessels were able to deploy from a Scottish base because there are none in that category?

[Mr Hammond]

The hon. Gentleman rather narrowed the scope of his question at the end by saying “able to deploy from a Scottish base”. We operate the UK armed forces and our response is on a UK-wide basis. I will check the facts of the incident and write to him.

[Harriett Baldwin (West Worcestershire) (Con)]

T3. Cyber-security is an integral part of the nation’s defences, so may I invite the new Defence Secretary to visit the wide range of cyber-security firms located in cyber valley in Malvern in my constituency?

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

The Secretary of State and I have just carved up our diaries and I, as the Minister responsible for industry, equipment and science, will be prepared to make the long and arduous journey from Mid Worcestershire to West Worcestershire to visit those firms, hopefully at an early date.

[Paul Flynn (Newport West) (Lab)]

What steps is the Secretary of State taking to reduce tension between the west and Iran, as there is a possibility of a war between our two countries, the consequences of which would be unimaginable?

[Mr Hammond]

The Government’s policy remains one of both applying pressure and maintaining engagement with Iran in the sincere hope that the crisis can be resolved peacefully.

[Margot James (Stourbridge) (Con)]

T4. May I sing in unison with my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) in congratulating the military wives and crave your indulgence, Mr Speaker, on this festive occasion by presenting an advance copy of the disc, via my hon. Friend the Member for Devizes (Claire Perry) who is sitting in front of me, to the Secretary of State for his enjoyment on one of the long car journeys that I know he enjoys so much?

[Mr Hammond]

I am grateful to my hon. Friend. I had the great pleasure of meeting members of the military wives choir when they performed at Downing street a couple of weeks ago, and we wish them every success for a Christmas No. 1 next week.

[Dan Jarvis (Barnsley Central) (Lab)]

Does the Secretary of State believe that the utility of military force as an instrument of UK foreign policy is more relevant or less relevant than it was, say, 30 years ago, and how does he intend to reflect that in future UK defence policy?

[Mr Hammond]

That is a very deep but helpful question. The Government are clearly committed to integrating defence diplomacy with our wider diplomatic effort to ensure that the UK’s Government-wide objectives are best delivered through the use of all the assets available, including our defence assets, and my right hon. Friend the Foreign Secretary and I will publish our strategy for defence engagement in the new year.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

T5. I warmly welcome the Prime Minister’s announcement today that he is setting up a Cabinet Committee to deal with all matters relating to the armed services and veterans. I ask that the Committee prioritises housing issues, which are referred to often, and that there is an indication of how colleagues in this House and members of the armed services and their families outside can give evidence to the Committee.

[Mr Robathan]

I thank the right hon. Gentleman for his question, because I think that the announcement shows that we are prioritising the needs of our service, particularly ex-service personnel. I am absolutely certain that housing will be at the top of the list of matters that are discussed. It is a Cabinet Committee and so will not be taking evidence, but I am sure that it will receive representations and submissions, which will be very welcome.

[Alex Cunningham (Stockton North) (Lab)]

I am pleased that companies including Darchem Engineering in Stillington in my constituency still have contracts related to the new aircraft carriers, but with which of our partner nations’ carriers will the new carrier-variant aircraft be interoperable?

[Peter Luff]

One major gain of moving to the carrier-variant joint strike fighter is enhanced interoperability with our United States allies, in particular, but there will also be interoperability with the French. The change produces real opportunities for interoperability.

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

T6. I have recently urged Hounslow council to review its banding criteria for council housing for ex-service personnel. What discussions has my right hon. Friend had with the Department for Communities and Local Government and the Minister for Housing and Local Government to ensure that there is provision for ex-service personnel, who have done so much for this country?

[Mr Robathan]

I am very pleased to receive that question from my hon. Friend. The Minister for Housing and Local Government, as she will know, has a committee—of which I am a member—that discusses those matters, and as I mentioned earlier he recently announced a consultation on priority for ex-service personnel on social housing lists. The community covenants that we are taking forward are specifically with local authorities, so that service personnel leaving the armed forces are given assistance and receive proper recognition in social housing, as elsewhere.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The previous Government established the St Malo agreement with France, and the previous Secretary of State for Defence took it further. Will the current Secretary of State have words with the Prime Minister to ensure that his current attitude to France does not damage our important programme of defence co-operation?

[Mr Hammond]

I can reassure the hon. Gentleman that the Prime Minister’s attitude is that we have a commonality of interests in securing strong defence in Europe, and that bilateral relationships between Britain and France will be mutually beneficial to both countries. We are advancing our defence co-operation with France and expect to conduct a defence summit in February.

[Andrew Stephenson (Pendle) (Con)]

T8. I welcome the news that armed forces personnel will be used to aid security at the Olympics games, but will any of those returning from Afghanistan end up having their post-operational leave cancelled and, instead, be posted to Olympic duties?

[Mr Hammond]

Some of those returning from Afghanistan may at some point be involved in Olympic duties, but no one will lose their post-operational leave. Post-operational leave has to be scheduled anyway, and it will be scheduled around the requirements of the Olympic task.

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

May I press the Minister for more detailed figures on the capacity being built at Aldermaston for a possible new warhead? When will he announce the specific breakdown of costs associated with that and, in particular, with the Octans and Orchard programmes, and will he do so through a statement to the House, rather than by slipping it out in a written answer?

[Peter Luff]

I do not know how often one has to say this: no expenditure at the Atomic Weapons Establishment is being incurred to enable a new warhead; it is to sustain the security of the existing stockpile. I do wish the hon. Lady would get this into her head: no money is being spent on new warheads.

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

T9. The Secretary of State will understand the significance of the fact that only 3% of Afghan security forces are from the Pashtun south, particularly when it comes to how successful our handover will be in 2014. What progress is being made to improve the imbalance in ethnicities before our troops withdraw?

[Mr Hammond]

My hon. Friend is right to draw attention to that continuing issue. The Pashtun percentage in the ANSF is very much higher than 3%, but he is right that Pashtun recruits tend to be northern rather than southern. The ANSF has strategies to address that, and the situation is slowly improving, but it remains one of the important issues that has to be addressed if we are to create a stable and sustainable Afghan Government.

[Derek Twigg (Halton) (Lab)]

In the past week I have intervened in the case of a constituent who is being made redundant from the Army in a few weeks’ time, to ensure that he is able to get social housing and an educational place for his child. He had little help from the MOD, so will the Minister look again at what help is being given to those who are made redundant? Specifically, I have been told that education legislation does not prioritise those being made redundant, as it does those being given a new posting, and that is completely wrong.

[Mr Robathan]

I should be grateful if the hon. Gentleman wrote to me with the details of the case, which I will certainly take up. We remain committed to both social housing and educational benefits for those leaving the services, and I am not sure whether the situation to which he refers is correct, but I will pursue it if he takes it up with me.

[Stephen Gilbert (St Austell and Newquay) (LD)]

On Friday evening, I visited 781 squadron of the Air Training Corps, based in Newquay, and I saw the great work done there. What plans does the Minister have to develop and further support our cadet forces?

[Mr Robathan]

We absolutely believe in the value of our cadet and youth organisations, and not just the armed forces cadet organisations. The Air Training Corps does fantastic work. We are looking to expand, if we can, cadet organisations, particularly the combined cadet forces in all schools. However, the cost is quite large and we are short of money. Nevertheless, we are looking into the matter at the moment—indeed, as I speak.

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

In his earlier reply, the Minister referred to the touching issue of homelessness. I spent the weekend with soldiers off our streets in my constituency; many homeless veterans are slipping through the net. What work will the Minister be doing, including with the devolved Administrations, to ensure that veterans on the streets are helped to adjust to civilian life again?

[Mr Robathan]

That is, of course, a matter for the devolved Administrations but we are in close contact with them, particularly over the covenant. The Scottish and Welsh devolved Administrations have accepted the covenant in full—I think the Northern Ireland devolved Administration have as well, although there are slight differences there. We certainly wish to see our ex-service personnel receive proper housing support in Wales, Scotland and Northern Ireland as well as in England. If the hon. Gentleman has a particular case in mind, I would be grateful if he wrote to me.

[Mark Lancaster (Milton Keynes North) (Con)]

I remind the House of my interest. Will the Minister confirm that no distinction will be made between “regular” and “reserve” when it comes to the qualification criteria for the Queen’s diamond jubilee medal?

[Mr Robathan]

My hon. Friend speaks with some passion, and he has spoken to me about the issue before. I can confirm that reservist personnel will receive the diamond jubilee medal if they qualify. I believe that we have made sure that the anomaly that took place at the Queen’s golden jubilee will not apply next year.

[Mr David Hanson (Delyn) (Lab)]

On service pay, the Secretary of State for Defence has again prayed in aid the operational allowance. For my benefit, will he confirm how many, in percentage terms, of our service personnel will receive that operational allowance over the next three years?

[Mr Hammond]

I am doing the maths on my feet; there are about 9,500 people in Afghanistan on a five-cycle rotation, so the answer is about 45,000 or 47,000 of our armed forces personnel.

[Mr Dominic Raab (Esher and Walton) (Con)]

Following the failure of the congressional committee to agree savings as part of the deal to raise the debt ceiling, the US military faces automatic spending cuts of up to $500 billion from 2013. What reassurances have Ministers sought specifically about the impact that that may have on UK-US co-operation in intelligence and counter-terrorism?

[Mr Hammond]

I assure my hon. Friend that we are having regular discussions with US counterparts; I am going to Washington immediately after the new year holiday. Whatever happens, our strong security and intelligence relationship with the US will continue. It benefits both parties and is at the very heart of our strategy.

[Mr Iain Wright (Hartlepool) (Lab)]

On Friday, I attended a ceremony to commemorate the 97th anniversary of the bombardment of the Hartlepools. It was the first direct attack on the mainland for centuries, and 118 people, including 37 children, were killed. Given the national and local significance of the event, what steps will the Government put in place to commemorate the centenary in three years’ time?

[Mr Robathan]

I pay tribute to those of my grandfather’s generation who did so much in the first world war—what they did is almost beyond our ken. The issue is to do with history, and for that reason the Department for Culture, Media and Sport leads on it. However, as the hon. Gentleman may know, my hon. Friend the Member for South West Wiltshire (Dr Murrison) has been appointed the special representative on the first world war and he will deal with all the commemorations. He will co-ordinate input from the Ministry of Defence, the DCMS and the Imperial War museum for the nation as we approach the centenaries of the 1914 to 1918 period.

[Elizabeth Truss (South West Norfolk) (Con)]

Given the sterling performance of RAF Marham servicemen in Libya and the strategic and economic advantages of the base, when a decision is made in the spring about basing for the joint strike fighter, will RAF Marham not be the ideal candidate?

[Mr Hammond]

I give my hon. Friend full marks for her persistence on behalf of her constituency interest, but I have to tell her that it is far too early to make a decision about where the joint strike fighter will be based.

Petition

Monday 19th December 2011 Commons Chamber

Mr Gordon Marsden (Blackpool South) (Lab)

- Hansard - - Excerpts

I have the pleasure and honour of presenting to the House a petition of more than 1,000 people from Blackpool South.

The petition states:

The Petition of residents of Blackpool South,

Declares that the Petitioners are concerned that the Government’s Health and Social Care Bill, with its proposed changes to the NHS, will adversely affect NHS services for residents across Blackpool South.

The Petitioners therefore request that the House of Commons urges the Government to amend the Health and Social Care Bill so as to secure existing levels of funding and service provision for NHS patients in Blackpool South.

And the Petitioners remain, etc.

[P000994]

Foreign National Offenders

Monday 19th December 2011 Commons Chamber

15:34

[Chris Bryant (Rhondda) (Lab)]

(Urgent Question): To ask the Secretary of State if he will make a statement on the Home Office report on the number of foreign national offenders who have committed crimes on release before being deported.

[The Minister for Immigration (Damian Green)]

This Government believe that foreign criminals should be returned to their home country at the earliest opportunity, and the UK Border Agency always seeks to remove them. Last year we removed more than 5,000 foreign criminals, 43% by the end of their prison sentence. Where there are barriers to early removal, the agency seeks to detain them to protect the public. However, the agency has to operate within the law. It must release foreign offenders when ordered to do so by the courts and release low-risk offenders where there is no realistic prospect of removal within a reasonable period. When this happens, the agency works closely with the police and the National Offender Management Service to reduce the risk of reoffending. Deportation action continues in all cases.

There are 3,940 foreign offenders in the community, 90% of whom were released by the courts. Deportation can be delayed for many reasons, including challenges under human rights legislation, the situation in the offender’s home country, and lack of co-operation by the offender or his home Government in getting essential travel documents. We are doing everything in our power to increase the number and speed of removals. We now start deportation action 18 months before the end of the sentence to speed up the deportation process. We are chartering flights to remove foreign offenders to many more long-haul and challenging destinations. We will change the immigration rules to cut abuse of the Human Rights Act 1998. We will open more foreign national-only prisons, and we will be able to remove more European offenders through the prisoner transfer agreement. The House can therefore see that we have already taken significant action to address this long-standing problem and intend to take further action in the months ahead which I hope Members on both sides of the House will support.

[Chris Bryant]

Well, quite the opposite, in fact. The trouble is that the rhetoric does not fit with the facts. We learned this weekend that a report has been sitting in the Minister’s hands for weeks and yet he had absolutely no plans to publish it. When was he going to reveal the true figures to this House? Will he publish the report, in full, this afternoon? Will he confirm that according to the report by the independent chief inspector of the UK Border Agency, John Vine, there were 3,775 foreign national offenders awaiting deportation in May this year, and that according to the secret internal Home Office report in his hands, that figure had leapt by September by nearly 500 to 4,238—higher than the number that the Minister just gave us? That equates to seven foreign criminals in every constituency awaiting deportation. Is not that an increase of 12.5% in just four months? Can the Minister tell us where these people are? To be precise, can the Home Office be precise about the whereabouts of every single one of these people? If not, then contrary to what the Minister says, he has absolutely no means of deporting any one of them.

Will the Minister confirm that the number of foreign national offenders deported has actually fallen this year—fallen, not risen—by more than 700, an astounding figure? Will he confirm that the number of staff at the UK Border Agency is being cut by 6,500? Will he confirm that foreign criminals who left prison this year and have not yet been deported have been arrested and charged with violent crimes? If so, how many; and does that include murder, kidnapping and violence to the person?

So far on the Minister’s watch, we have seen numbers of staff at the UK Border Agency going down, numbers of foreign national offenders deported going down, and numbers of foreign criminals in our midst going up. Does the Minister not realise that that is the wrong way round? I urge him to get a grip as soon as possible, to publish the figures, to publish his secret report, and to put a real plan in place to ensure that more, not fewer, foreign criminals are deported: fewer words, more action.

[Damian Green]

The problem for the hon. Gentleman is that he should think carefully before asking urgent questions about newspaper reports that he has not read very carefully. All the figures in the newspaper report that he is relying on start not in May 2010 but in March 2009, so they cover a large period when his Government were in power. He appears to have forgotten that under his Government foreign national prisoners were freed on a routine basis without even being considered for deportation.. Indeed, let me give him some figures to show what has changed for the better.

Between 1999 and 2006, 1,013 foreign national offenders were released from prison without consideration for deportation. In 2009-10 the figure was 64 and in 2010-11 it was 28. Over the past two years, all 92 have been considered for deportation and 10 have already been removed—a stark contrast with the complete failure under the previous Government.

[Chris Bryant]

Seven hundred fewer.

[Damian Green]

The hon. Gentleman asked about violent criminals. Again, I tell him in all friendliness that he should check his facts before he comes to the Dispatch Box. The report at the weekend mentioned three cases involving murder. I have checked the facts. One of those people was charged and acquitted, so was not a murderer at all. Of the other two, one was not only released from immigration detention under the previous Government, but committed the murder for which he was convicted under the previous Government. That is not the previous Government’s fault. People who commit murder commit a crime on their own responsibility. However, the hon. Gentleman should not attempt to distort facts and figures to serve a political purpose, particularly when he is on such weak ground.

Of the 90% of people who have been released by the courts, 60% were released under human rights legislation. We will change the immigration laws to stop the abuse of article 8 of the European convention on human rights.

[Chris Bryant]

Seven hundred fewer.

[Damian Green]

Having failed with his question, the hon. Gentleman is now trying again from a sedentary position, non-stop. I invite him to lead his party in supporting our legislation, when it is brought forward, to change the Human Rights Act so that it better reflects the British people’s view of what human rights should be.

May I correct one canard that the hon. Gentleman has repeated a lot, which is that this Government propose to cut the number of staff at the UKBA by 6,500? It has been a matter of a public document for more than a year that in the current spending review period, we will cut the number by 5,200. Again, I gently tell him to stop using the 6,500 figure, because the first 1,300 of those people were planned to be cut by the previous Labour Government.

[Mark Field (Cities of London and Westminster) (Con)]

The general public will find it rather unedifying to watch this blame game, when what they want is to be protected from dangerous foreign criminals who should have been kicked out of the country. Will the Minister tell us why, in his 18-month tenure, there has not already been a move to alter the human rights legislation to which he referred? What impact does he think that legislation has had on the severity of this problem, which clearly has not come about since May 2010 but has been around for some years?

[Damian Green]

The problem has indeed been around for some years. As I said in my introductory remarks, we have taken a number of measures to make the system more effective, the most important of which was to ensure that every foreign national offender who is in prison starts having their deportation considered 18 months before the end of their sentence. That is the most effective way to ensure that we do not have hundreds of people or, as in some cases, more than a thousand people falling through the cracks.

My hon. Friend is right about human rights legislation. I apologise if we have been too slow for his taste in bringing reforms forward. As he will know, we produced a consultation document some months ago suggesting changes to human rights legislation. Given the tenor of the exchanges so far, I expect our changes to receive support from both sides of the House.

[Keith Vaz (Leicester East) (Lab)]

The Minister will know that the Home Affairs Committee’s last report on the UKBA emphasised that the crucial relationship in respect of foreign national prisoners was that between the Prison Service and the UKBA. Fifty per cent. of such people have been waiting for up to two years for removal. The Minister has used the 18 month figure several times. Could we not start looking at deportation the moment the prisoner enters the prison system?

[Damian Green]

Obviously, the practical point is that it depends on the length of the sentence. As the right hon. Gentleman knows, if somebody is sentenced to more than a year they are up for deportation at the end of their sentence, so what he suggests effectively happens. I am grateful to him for both the Committee’s thoughtful reports and the tone of his question, which gets to the heart of the matter. There has to be better co-ordination between the Prison Service and the UKBA. We have taken significant steps towards achieving that, and I am sure that more steps need to be taken in future.

[Tony Baldry (Banbury) (Con)]

In many cases the trial judge makes an order for deportation as part of the sentence, but a significant number of offenders destroy their passports and paperwork in an attempt to frustrate deportation. Would two things be possible? First, the trial judge could be invited to make a finding of fact at the time of sentencing about the citizenship of the offender. Secondly, to follow on from the question asked by the Chair of the Home Affairs Committee, notice could be served on the offender’s high commission or embassy indicating that on completion of the sentence the individual would be deported to the country concerned, and inviting the full co-operation of that embassy or high commission.

[Damian Green]

I am grateful to my hon. Friend for those helpful and practical suggestions, some of which the UKBA already attempts to operate. He will be aware that most countries co-operate with the process entirely and are extremely helpful but, sadly, some countries are much less helpful. One measure that we are taking to ensure that the situation improves in the years ahead, as it needs to, is persuading Governments who are less keen than others on helping us with returns to be more helpful and co-operative about accepting their nationals back.

[Frank Dobson (Holborn and St Pancras) (Lab)]

When a prisoner is sentenced to imprisonment and deportation, why do we not just deport them straight away and save the expense of sending them to jail?

[Damian Green]

Successive Home Secretaries and Immigration Ministers have grappled with that suggestion. One problem is that we would need to know that offenders would be sentenced to some kind of equivalent term in their own country. Otherwise, we would have the terrible situation that somebody could commit a serious crime in this country in the full knowledge that the worst thing that would happen to them if they were caught and convicted would be that they were returned home free to their own country. I cannot believe that the right hon. Gentleman wants that to happen. That is why successive Governments have not taken that path.

[Charlie Elphicke (Dover) (Con)]

I have seen people in the Dover removal centre who have been there for three years, being held in stasis after having served their sentence. May I urge the Minister to take all measures possible to get such people out of the system as quickly as possible? It seems basically unfair that they should be incarcerated when they have served their sentence.

[Damian Green]

I take my hon. Friend’s point, and he is assiduous in his work on the conditions at the removal centre in his constituency. I can assure him that this Government—like the previous Government, to be fair—will keep people in detention after their prison sentence has finished only if they are thought to pose a danger to the wider community. I am sure he will appreciate that if such people cannot be deported immediately for the reasons that we have been discussing, but they pose a danger to the British public, the best place for them is in immigration detention.

[Mr David Winnick (Walsall North) (Lab)]

Is it not clear that the reason why the Home Secretary is not here to make the statement herself is that her Department is in such a shambles over matters relating to immigration control? Can the message be sent to her loudly and clearly that it is time she got a grip on her Department?

[Damian Green]

The hon. Gentleman has been here long enough to know that if the shadow Minister for Immigration asks an urgent question, it is answered by the Minister for Immigration. That is the way things work.

[Mr Peter Bone (Wellingborough) (Con)]

Would not the British Government prefer foreign nationals who come here, commit a crime and are put in prison to be sent home to their country early, rather than be kept in prison and let out again to commit further crimes?

[Damian Green]

As I explained to the right hon. Member for Holborn and St Pancras (Frank Dobson), it seems slightly perverse for anyone to want to send out a signal that if someone commits a serious crime in Britain, uniquely in the world they will get off with either no sentence or a very short one. We want people to know that if they commit a crime in this country, they will be caught and convicted. If they are convicted, they should serve a proper sentence. Of course it would be preferable if they could serve some of that sentence in their own country, and we have negotiated arrangements to that end with certain countries.

[Malcolm Wicks (Croydon North) (Lab)]

Following the murder of one of my constituents, and following the murderer’s being sent to prison, it was put to me by other constituents that this man—the murderer—might be a foreign national. I did not know whether that was true, so I wrote to ask the Minister. The Minister replied that he could not tell me and that the only way I could find out was to seek the permission of the murderer—no doubt because of human rights. Is not the Minister’s reply, and this situation generally, total nonsense? Sometimes it is the Member of Parliament who can track such individuals, to ensure that the Home Office is doing its duty.

[Damian Green]

I rather agree with the right hon. Gentleman. The amount of data protection that Ministers are required to observe may well seem absurd, and I can reassure him that I found it absurd as well. Indeed, those sorts of messages go out to Members of Parliament much less frequently than in the past, because I have changed the system.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Minister share with the House what specific steps he will take to prevent the misuse of human rights law from stopping the deportation of dangerous foreign criminals?

[Damian Green]

As my hon. Friend will know, we produced a consultation document a few months ago. He will have to wait for the final verdict on the deliberations, but he will be as aware as I am that the pleading of human rights—in particular family rights, under article 8 of the European convention on human rights—has been distorted beyond all measure, principally by courts in this country in this instance, rather than by the European Court. We want to send much clearer guidance to our judges, so that they know where the balance should lie between the rights of the individual and the rights of the community, because that balance has got completely out of kilter.

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

Can the Minister say how many prisoners who are due to be deported are currently detained in Scottish prisons? Also, when did he last speak to the Cabinet Secretary for Justice in the Scottish Government to ensure that this matter is dealt with as quickly as possible?

[Damian Green]

I speak to the Justice Secretary in the Scottish Government on a regular basis about various issues, because of the devolved powers in this area. I am afraid I do not have the exact figure that the hon. Lady asks for to hand, but I will write to her with it.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Minister name and shame the three countries from which most of the foreign nationals in question come and that are being the most awkward in facilitating their return to secure detention in their own countries?

[Damian Green]

Two were named in the weekend press, but they were not, in fact, the most awkward. Awkwardness is difficult to define. The two countries named were Jamaica and Nigeria, whose nationals account for most such prisoners. However, I should pay tribute to both countries’ Governments, who are considerably more co-operative now than they were. I visited Nigeria recently, where I visited a prison, part of which had been built by the British taxpayer specifically to make it easier for us to return Nigerian national prisoners to Nigeria. That is the kind of practical action we are taking.

[Mr John Spellar (Warley) (Lab)]

Did not the Minister’s reply to my right hon. Friend the Member for Croydon North (Malcolm Wicks) demonstrate exactly how he is failing in this job? He is just the mouthpiece for his civil servants, who are still pumping out the same old line. However, perhaps he can help us on a couple of issues on which he did not reply to the shadow Minister. Does he have a clue where the various prisoners are or how many are in the west midlands, for example?

[Damian Green]

At this moment it is quite difficult to say where every individual in this country is, or where any sub-set of those individuals is, because they may be travelling around. We put strict reporting arrangements on all who are released—both those released by the courts and the 10% released by the UKBA. We use electronic tagging and monitor them carefully so that we know where they are. That is why, as an example, we are in touch with all 92 individuals who were released without being considered for deportation over the last two years. We are pursuing deportation for all of them, and 10 have already been removed.

[Andrew Stephenson (Pendle) (Con)]

On 7 November, giving an answer in the House, the Minister said that there were 162 successful appeals by foreign criminals against deportation in October to December last year, of which 99 were allowed on article 8 grounds. Does the Minister agree that it is a bit rich of the Opposition, who introduced the Human Rights Act and who now oppose its reform, to bring this matter up today?

[Damian Green]

I am always willing to welcome repentant sinners, so if Labour Members were to support our reform of human rights legislation, I am sure that we would be delighted.

[Tony Lloyd (Manchester Central) (Lab)]

Notwithstanding the Minister’s answers on the reform of the Human Rights Act, Britain has a good reputation historically for not sending people back if there is a reasonable chance that they will face torture or death. Will he guarantee that that will still be the benchmark against which we will be measured?

[Damian Green]

Of course that will remain the law. The hon. Gentleman takes a close interest in these matters, and I am sure that he will recognise that there is something absurd about a situation in which “human rights” has become a boo phrase, and in which many people in this country regard human rights as something that gets in the way of justice. That is nonsense—

[Chris Bryant]

That is because of your speeches.

[Damian Green]

If the hon. Member for Rhondda (Chris Bryant) believes that, he really is completely out of touch with reality.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome the Home Office’s review of article 8 and the right to family life. Successful article 8 challenges to deportations are running at about 400 a year, and they include that of the man with no dependants who was convicted of killing my constituent, Bishal Gurung. Will the Minister tell the House when the Home Office review will report, and is he mindful of the evidence from the Lord Chief Justice and the President of the Supreme Court that changes of this nature would require primary legislation?

[Damian Green]

Obviously, we are mindful of all the representations we have received on the consultation. We will come to a conclusion within the next few months. My hon. Friend’s point is clearly a serious one, and we are looking carefully into the fastest and most effective method of achieving what I hope we all want to achieve.

[Nic Dakin (Scunthorpe) (Lab)]

The Home Office’s quarterly figures for the removal of foreign criminals from the UK show that, in the first quarter of 2009, the figures were consistently between 1,300 and 1,400, but that they fell to 936 and 1,056 in the last two quarters. Can the Minister explain that change in the numbers?

[Damian Green]

Some of the reasons relate to the fact that fewer people are coming into the system. Also, there is an increasing cohort of people who have been here a long time and who are therefore able to have lengthy legal processes. All the points that I have already mentioned are used by individuals to delay the process.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does the Minister know how many released foreign prisoners have had to be rearrested for the commission of sexual offences?

[Damian Green]

I do not know that figure off the top of my head, but if I find it, I will certainly pass it to the hon. Gentleman and put it in the Library of the House.

[Kevin Brennan (Cardiff West) (Lab)]

The figures seem to show a sudden drop in the last two quarters, down from 1,339 to 936 and then barely above 1,000. There seems to be something going on that is more significant than a long-term trend. Will the Minister look again at why the number of foreign national offenders being removed seems to have dropped off a cliff edge in the past six months?

[Damian Green]

I do not accept that characterisation. Indeed, as the hon. Gentleman says, the figure went down and it has now gone back up again. As I explained to the hon. Member for Scunthorpe (Nic Dakin), there are a number of reasons for the change, some of which are precisely related to the changes that we have introduced and will introduce to stop people using and abusing the legal system to enable them to stay in this country when they have no right to do so.

Banking Commission Report

Monday 19th December 2011 Commons Chamber

16:58

[The Chancellor of the Exchequer (Mr George Osborne)]

The Government are proposing the most far-reaching reforms of British banking in our modern history. Our objective is to make sure that what happened in Britain never happens again, that taxpayers are protected and that customers get a better service. Last year, the Business Secretary and I set up the Independent Commission on Banking to look at what has been called the British dilemma—that is, how Britain can be home to one of the world’s leading financial centres without exposing British taxpayers to the massive costs of those banks failing.

In the years leading up to the financial crisis, a failure of regulation contributed to the build-up of a debt-fuelled boom. Banks borrowed too much and took on risks they did not understand. When the bubble burst, these banks turned out to be too big to fail, and the last Government had to spend billions of pounds bailing them out. Of course, major financial institutions in other countries were bailed out by their taxpayers, but the British bail-outs were on a different scale. The Royal Bank of Scotland bail-out was the biggest in the world. The recent report of the Financial Services Authority on the failure of RBS attributed that to

“poor decisions made by the RBS management and Board”

against a backdrop of a regulatory regime that failed to stop them. The politicians responsible are named in the report.

This Government are determined to do better at protecting British taxpayers from the cost of failing banks, while at the same time acknowledging the importance of the financial sector to our country. Britain should remain home to one of the world’s leading financial centres and the home of global banks, but the strength of this industry is also a potential weakness to the economy if not properly regulated.

The sector supports nearly 1.4 million jobs—not just in the City of London but across the whole of the UK. The balance-sheet of our banking system is close to 500% of our gross domestic product, compared to 100% in the US and 300% in Germany and France. So while a European and international regulatory response to the crisis is important, we cannot rely on this response alone to make our banking system safe. We in this Parliament have to take action—and under this Government, we are.

We are putting the Bank of England back in charge of prudential regulation; we have created the Financial Policy Committee to look at risks across the financial system; and I welcome today’s report from the Joint Committee on the draft Financial Services Bill. I wanted proper pre-legislative scrutiny. That has happened, and we will respond in the new year so that we improve the legislation. We have also introduced a permanent bank levy on wholesale funding and we have introduced the toughest and most transparent pay regime of any major financial centre in the world. We also need to address the structure of our banks, however. That is why the coalition Government set up the Independent Commission on Banking. I again want to thank Sir John Vickers and the other members of the commission—Clare Spottiswoode, Martin Taylor, Bill Winters and Martin Wolf—for their impressive report.

The report made three main recommendations: first, that everyday high-street banking services should be separated from wholesale and investment banking activities, and that this be done via a ring fence; secondly, that banks be required to have bigger cushions to absorb losses without recourse to the taxpayer; and thirdly, that competition in the banking sector be strengthened by increasing the number of banks on the high street and the power of customers to switch accounts. When the final report was published in September, I made it clear that I welcomed these recommendations in principle and would return to the House by the end of the year. Today, I fulfil that commitment. Let me set out in detail how the Government plan to respond, and invite further views before we publish a White Paper next spring.

First, the Government will separate retail and investment banking through a ring fence. It is important to know that this ring fence will not prevent banks from failing, but it does mean that if banks get into trouble, those elements of the banking system that are vital for families, businesses and for the whole economy can continue without resort to the taxpayer, so the following will be in newly ring-fenced banks: the deposits of individuals and their overdrafts, and the deposits and overdrafts of small and medium-sized businesses. They will all be kept separate from riskier wholesale and investment banking, which will have to be outside the ring fence. Larger corporate deposits and lending and private banking can be either in the ring fence or outside. The ring-fenced bank will be legally and operationally independent; it will be able to finance itself independently and have its own board; and there will be limits on the amount it can lend to the rest of the group. The commission’s interim report proposed a de minimis exemption for small banks that were clearly not systemic, and we invite opinion on whether to proceed with that. Our objective is clear. We want to separate high-street banking from investment banking to protect the British economy, protect British taxpayers and make sure that nothing is too big to fail.

Secondly, we will make sure that banks have bigger cushions, so they are better able to withstand losses. The international Basel III requirement, which the UK was instrumental in negotiating, requires banks to hold minimum equity capital of 7%, and there is a top-up for systemically important banks. We will go further. Large ring-fenced retail banks will be required to hold equity capital of at least 10%, and there will also be a minimum requirement for the loss-absorbing capacity of big banks of at least 17%. This requirement will apply to the UK operations of British banks, and will also be applied to the non-UK operations of UK-headquartered banks unless they can demonstrate that they do not pose a threat to the UK taxpayer.

I can also confirm that the Government will introduce the principle of depositor preference: in other words, the principle that unsecured lenders to banks, who are better placed to monitor the risks that banks are taking on, should have to take losses ahead of ordinary depositors. We seek further views on the best way to implement this principle. This comes on top of the guaranteed protection offered by the Financial Services Compensation Scheme, which covers 100% of eligible deposits up to £85, 000.

Those proposals on loss absorbency will also strengthen the European single market. One of the greatest distortions to the single market in banking is the perceived implicit taxpayer guarantee for all European banks. Through these proposals, the UK is setting out a plan to remove that distortion for UK banks. The European Commission has indicated that it plans to consider what it can do to reconcile it at EU level. I welcome that, and the UK will engage actively in the debate.

This House and other member states have objected to the European Commission's proposals to impose maximum standards for bank capital. These proposals undermine efforts that we and others are making to improve financial stability and the single market, and bodies such as the International Monetary Fund believe that they also water down the international Basel III agreement, giving exemptions to globally active banks in certain European countries. Along with others, we will seek changes to ensure that the EU faithfully implements international agreements.

Thirdly, the Government will take action to increase competition in the banking sector. As a result of the disappearance of banks such as Bradford & Bingley and the last Government’s decision on the merger of Lloyds and HBOS, the banking sector is dominated by a handful of large banks. Last year, just four banks took 70% of the market share. We need new banks to enter the market and provide consumers and businesses with more choice. Last month the Government announced the sale of Northern Rock to Virgin Money, which creates a new competitor in our retail banking sector. In the coalition agreement we made it clear that we wished to foster diversity in financial services, including the promotion of mutuals. We welcome last week's announcement that Lloyds has identified the Co-op as preferred bidder for the divestment of more than 600 branches, which will create a strong challenger in the high street.

We will also make it easier for people to switch their current accounts. This recommendation from the Commission has received less attention from the media, but could be of huge benefit to millions of customers. The idea is that individuals and small businesses can switch to another bank within seven days, and all the direct debits and credits will be switched for them at no cost. The Government have secured the banking industry's agreement that it will implement these proposals by September 2013.

We will support the Treasury Committee's proposal to bring the Payments Council within the scope of regulation, and I can confirm that our financial services legislation next year will specify that one of the objectives of the Financial Conduct Authority is to promote effective competition in the interests of consumers. A new statutory competition remit will provide the FCA with a clear mandate for swifter, more effective action to address competition problems in financial services. Within months of the ICB report, legislation will be introduced to bring the change into force.

That brings me to timing. Some have questioned whether the Government will seek to delay implementation of these reforms—such questions come from people who never even contemplated reform when they were in office. In fact, the reverse is true. On the advice of Sir John Vickers and others, I will introduce separate legislation to implement the ring fence. The Government intend implementation to proceed in stages, with the final changes relating to loss absorbency fully completed by the beginning of 2019 in line with the Basel agreement, but I can confirm that primary and secondary legislation relating to the ring fence will be completed by the end of this Parliament in May 2015, and that banks will be expected to comply as soon as practically possible thereafter. The Government will work with the banks to develop a reasonable transition timetable.

Of course, there are both costs and benefits to these reforms. The Government estimate the total costs to UK banks to be between £3.5 billion and £8 billion, broadly in line with the commission’s estimate. Much of this reflects the cost to them of removing the subsidy that comes from any perceived implicit taxpayer guarantee, which is precisely what we intend. The cost to GDP is estimated by the Government at just £0.8 billion to £1.8 billion, slightly lower than the commission’s estimate. These are far outweighed by the benefits of the ICB’s recommendations. Even a relatively modest reduction in the likelihood or impact of future financial crises would yield an incremental economic benefit of £9.5 billion per year, such is the cost of financial crises to the economy. Since the wholesale arms of non-UK banks would be unaffected by these reforms and the principal recommendations relate to UK retail banking, the competitiveness of the City of London as a location for international banking will not be affected.

We are fixing the banking system to protect taxpayers in the future, but we also need to clear up the mistakes of the past. I have already mentioned Northern Rock and Lloyds, but the biggest call on the taxpayer was the bail-out of RBS. The Financial Services Authority’s recent report was a damning indictment of all that went wrong in this crisis, and those responsible are clearly identified in it. We need to deal with the mess they created. Despite promises from the previous Government that taxpayers would profit from the RBS bail-out, the Government’s shareholding is now worth around £27 billion less.

We are already reforming the regulatory structures that allowed these catastrophic failures to occur. Bonuses are a fraction of what they were four years ago. Early this year we placed a limit of £2,000 on cash bonuses for RBS and Lloyds. We have made it very clear that the bonus pool next year must be lower again, and more transparent. We are also clear that, at a time like this, the Financial Policy Committee’s advice should be followed: bank earnings should be used to build capital levels, not pay out large bonuses.

RBS itself has also made significant changes since 2008, including reducing the size of its investment bank by half, but I believe RBS needs to go further, and the management agree. We are the largest shareholders. Let me set out our view. RBS has already announced that it will further shift its business strategy towards its personal and SME customers and its corporate banking business which serves UK and international companies. We believe RBS’s future is as a major UK bank, with the majority of its business in the UK and in personal, SME and corporate banking. Investment banking will continue to support RBS’s corporate lending business, but it will make further significant reductions in the investment bank, scaling back riskier activities that are heavy users of capital or funding. RBS should emerge a stronger, safer bank able to maintain lending to businesses and customers, and which in time can be returned to full private sector ownership.

The British people are angry about what happened in our banks, and angry at the politicians who let it happen. This coalition Government see two parties working together to clear up the mess of the past and to create a banking system that protects taxpayers and serves customers better. Today we present the most far-reaching changes to banking in our modern history so that we can build an economy that works for everyone. I commend this statement to the House.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Let me start by thanking the Chancellor of the Exchequer for advance notice of his intention to give a statement but, as with the autumn statement, it is deeply disappointing that the statement, and the 75-page document, arrived with us only eight minutes before the Chancellor entered the House of Commons. One has to ask: do the Chancellor and the Business Secretary have something to hide?

I have a number of questions for the Chancellor. We have not had time to read the report so I hope he will make an effort to answer our questions today, but let me thank him for agreeing, at least in part, to our recommendation back in September that he produce an implementation plan for the Vickers commission by the end of the year. It is vital that the Government now implement these important banking reforms without foot-dragging or back-sliding or watering them down.

So will the Chancellor now agree to our second request, also made in September, and ask the Vickers commission to come back in 12 months’ time and publish an independent report on the progress that has been made in implementing its report?

Labour Members are determined to play their part in implementing these proposals in, as far as is possible, a cross-party spirit—taxpayers, customers and businesses, angry at banking recklessness which forced a multi-billion pound bail-out, will expect nothing less. We have apologised for the part that the last Government played in this global regulatory failure. In that same cross-party spirit, perhaps the Chancellor would like to take this opportunity to apologise too: for the role his party played in opposition, and he played as shadow Chancellor, in complaining of “too much regulation”, and for the then Leader of the Opposition calling, as late as spring 2008, for “lower taxes” and “less regulation” for the City. We all made mistakes and perhaps this Chancellor, who opposed financial regulation legislation, who opposed the nationalisation of Northern Rock, RBS and Lloyds, and who opposed Bank of England independence, should show a little more humility as well. If he does, I will, in a cross-party spirit, commend him for that.

I join the Chancellor in commending the excellent work of the pre-legislative scrutiny Committee on the draft Bill and of the Treasury Committee. We will study those reports in detail, and we will approach the Bill and the Chancellor’s reforms to the machinery of financial regulation with an open mind. However, like those Committees, we are concerned that his reforms could make decision making both more complicated and less transparent in future. There is a serious and still unanswered question as to whether there is sufficient accountability to match the massive new powers that the Chancellor plans to delegate to the Bank of England. His so-called “simplification” actually increases the number of deputy governors of the Bank of England from two to three.

Our fear is that he is replacing the tripartite system with a de facto quartet system—the Treasury, the MPC, the FPC and the PRA—with the FCA on the outside. Given that complexity—I can explain the acronyms; they are all different autonomous agencies in the Bank of England—can the Chancellor tell the House why he has still not published the promised memorandum of understanding between the Treasury and the different Bank agencies? I hope it is obvious to the Chancellor that the memorandum of understanding must specify that in any crisis the Chancellor must always hear the direct advice of all three deputy governors—alongside that of the Governor—most importantly that of the deputy governor who is also the chief executive of the independent regulator responsible for ensuring the stability of the banking system. In my view, that is essential if this new, more complex quartet system of financial regulation is to work in an effective and transparent way.

In responding to the Vickers commission, Labour set out three tests that will guide our view of banking reform—let me deal with them in turn. First, to protect taxpayers, we, too, support the commission’s radical reforms on ring-fencing and regulatory standards. Rather than delay, could the Chancellor explain why he is not at least making a start with reforms in the current financial regulation Bill, which will come before the House next year? Can he clarify to the House whether it is his intention to implement, in full, the Vickers recommendation on depositor preference? On the requirement on the biggest UK global banks to have the ability to absorb losses equivalent to between 17% and 20% of risk-weighted assets, can he explain why he is deciding to water down the Vickers proposal by not applying this rule to their full global balance sheets? Is he sure that this will not leave the taxpayer exposed?

The Business Secretary told the BBC yesterday that the Vickers report was being implemented in full, but what we have here is not an implementation report; it is a consultation paper before a White Paper in the spring. Already we learn that the Chancellor is not implementing the Vickers recommendations in full. Will he tell the House whether he really intends full implementation, or have the Liberal Democrats been sold a pup yet again?

On the second test of securing international agreement, given the Prime Minister’s decision 10 days ago to walk away from the negotiating table without securing any protections at all for financial services in those discussions, will the Chancellor tell the House whether he is confident that he can do a better job? In particular, is he confident that he will be able to get the necessary EU-wide agreement, which means a qualified majority vote, to implement the Vickers capital requirement proposals?

On the third test of delivering a banking system that supports the wider long-term interests of the economy, may I ask the Chancellor about competition and the supply of credit? On competition, we argued back in September that any delay or backsliding on competition would leave consumers and small businesses to pick up an unfair share of what he has confirmed is a multi-billion pound bill for tougher capital and regulatory standards. Developments since September have not been encouraging.

On Northern Rock, will the Chancellor reassure the House that his rather hurried trade sale will deliver over the coming years—in two, three, four and five years—a new challenger bank that will compete in the small business and mortgage markets? Will he assure the House that that will be the outcome? Will he confirm that it is as a result of widespread concern that the taxpayer will not get value from his loss-making sale that the National Audit Office has launched an investigation into that decision?

On the sale of Lloyds branches to support a new challenger bank, will the Chancellor explain to the House—perhaps he could explain it to the Business Secretary, too—why he has decided not to implement in full Vickers’s proposals to increase the size of branch sales from Lloyds on divestiture? Why has he not taken the advice of the Vickers commission on competition? Is it not overwhelmingly clear, as we argued back in September, that rather than waiting until 2015 the Chancellor should now commit to a review in 2013—two years’ time—of the impact on competition of these proposals?

The fact is that none of these long-term reforms can address the two immediate threats to the supply of credit and the stability of our already fragile economy and banking system. First, here in Britain, with rising unemployment and a flatlining economy depressing confidence, thousands of small businesses are now struggling—as Members on both sides of the House know and as I heard for myself in Leigh on Saturday—to access the credit they need to survive and grow, with net bank lending to businesses not rising but falling. Alongside the long-term reforms, will the Chancellor tell the House why, rather than cutting taxes for the banks, he is not acting now to ensure that UK banks start to act now to increase their lending to small businesses?

Secondly, finally and most gravely of all, the failure of all our political leaders across Europe to solve the euro crisis and in particular to get the European Central Bank to start doing its job as lender of last resort is now the biggest threat to banks in Britain, businesses in Britain and jobs in Britain. Ten days ago, the Prime Minister walked away. Will the Chancellor reassure the House that he has not walked away, too? Are he and the British Treasury seriously engaged in trying to solve what is now the gravest threat to prosperity in our country in this generation? Is anyone in the rest of Europe listening to the Chancellor any more?

[Mr Osborne]

First, I apologise if the right hon. Gentleman did not get the statement far enough in advance for him to read it. I am merely following the procedures that he laid down when he was at the Treasury.

Let me deal specifically with the points he raises in detail. First, on the financial services Bill which we will introduce in Parliament early in the next year, I did not talk about it in the statement because we will have the Second Reading debate, I hope, shortly after we come back in January, but it is an important part of what we are doing. I mentioned it in passing. It is about changing the regulatory system to put the Bank of England in overall charge of monitoring levels of debt and systemic risk in our economy—a responsibility that I believe should never have been taken away from the Bank of England back in 1997—and at the same time giving it the powers that it needs to act as a prudential regulator, without which it would not be able to identify those systemic risks.

The reason why I have not produced the memorandum of understanding is that I was waiting for the Joint Committee—the pre-legislative Committee—that has been looking into the Bill. I thought it would be completely inappropriate to produce the MOU before it had reported so, as I explained to the Committee, I was going to wait until I had its report. The report is only being published today and I hope fairly shortly to be able to produce that MOU, having taken into account what both it and the Treasury Committee say.

The right hon. Gentleman says this is all rather complicated. There is a simple principle, which is that the Bank of England is in charge of monitoring risks in our financial system—

[Ed Balls]

This plan is dangerous.

[Mr Osborne]

Well, we have tried the right hon. Gentleman’s approach and look what happened: the entire banking system collapsed. So with the greatest respect, his advice on what is a dangerous approach to regulation we will take with a pinch of salt.

I turn to the right hon. Gentleman’s other points. On international agreement, obviously it is extremely important that we are able to do this under European law. There has been an argument about this. We have a great deal of support. Countries such as Spain and Sweden have written to the Commission to urge it to allow countries to have their own national regimes that sit on top of the minimum capital requirements, and we are encouraged by the very recent Commission quote which says that “Vickers can be implemented fully in the UK in a way that is compatible with EU law”, but we will continue to make our argument. It is encouraging that both the European Commission and the European Parliament have expressed their keen interest in the Vickers report and are doing their own work on that. It is good to see us leading the international debate on that.

The right hon. Gentleman mentions competition. On Northern Rock, we welcome the National Audit Office investigation. It would be very surprising if the NAO did not do a report into such a financial transaction. It has done reports into all the previous financial transactions by this Government and the previous Government. I think what it will demonstrate is that this was a loss-making bank and the independent advice that we received was that it would go on losing money. The people who should be to blame for losing taxpayers’ money are sitting directly opposite me.

On Lloyds and the Lloyds branches, we have spoken throughout this process to John Vickers. Obviously, he can speak for himself and give his view, but we have kept him closely informed of what we are proposing. I think it is consistent with the intention in the report to create a strong challenger out of the divestment of the Lloyds branches.

Let me turn to the timetable that the right hon. Gentleman mentions. As I say, we will be implementing some of the competition requirements in the Vickers report—for example, the new competition remit for the FCA. That will be part of the financial services Bill that we introduce in January. We considered carefully whether to try and put all the Vickers requirements—the creation of the ring-fenced banks—into the financial services Bill that we are introducing early next year.

We did not think that was sensible. That was also the view of John Vickers, who recommended a separate piece of legislation. That is precisely what we are going to do, but our commitment is clear. We will have all the primary and secondary legislation, which is where quite a lot of the detail will be, through by the end of this Parliament. That is exactly what we want to see.

Finally, the right hon. Gentleman has been going around complaining that we are not doing enough, we are in danger of watering down Vickers, and the like. This is from the people who have opposed structural reform to our banking system. When I was sitting on the Opposition Front Bench as the shadow Chancellor under both the previous Chancellor of the Exchequer, who is in his place, and also under the Chancellor of the Exchequer before, who then became the Prime Minister, they opposed structural reform. They did not want to separate the banks. No doubt they can answer for themselves, but for the former City Minister who was in post when RBS made its bid for ABN AMRO, for the City Minister who was in post when Northern Rock was offering those 125% mortgages, for the City Minister who was in post when HBOS was making all those commercial property loans, for the former City Minister to complain that we are not doing enough is ridiculous. This is the man who advised that Fred Goodwin should get a knighthood and who told his boss to go and open the Lehman Brothers headquarters. That is his record, and his mealy-mouthed apology reminds me of that film “Whoops Apocalypse”—I am sorry, I just brought down the entire British economy; can we all please move on now. That is what he has done. Frankly, he has not made a substantive or interesting contribution to this debate on bank reform. Perhaps in the next few months he will.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

I am grateful to my right hon. Friend for his welcome for the Joint Committee report on the financial services Bill. Will he confirm that the legislation implementing recommendations on ring-fencing will be subject to pre-legislative scrutiny, but after that the banks will be required to implement ring-fencing without delay, whereas there is a strong case for allowing time for the requirements for higher capital adequacy to be built up to prevent intensifying the shortage of capital in the short term?

[Mr Osborne]

I will consider the case for pre-legislative scrutiny, and the House will consider it, closer to the time. Obviously there is a trade-off between getting the legislation through and having the pre-legislative scrutiny, but my right hon. Friend’s Committee has done a very good job. Not everyone here will have had a chance to read its report, but I have read its executive summary and I will read the full report tonight. It is an impressive piece of work and an advert for pre-legislative scrutiny. I repeat our commitment that we want all this legislation, primary and secondary, by the end of the Parliament.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I welcome the Vickers report and I am glad to hear that it is being implemented, but will the Chancellor be careful about overselling this? This would not have stopped the failure of Northern Rock or HBOS, and the idea that a future Government might decline to step in and rescue an investment bank if it failed is simply not credible. Look what happened to Lehmans when the Americans tried that. So these problems have not gone away. Will he accept that if his reforms of the Bank of England are to work, he has to look at the governance of the Bank, as the Treasury Committee recommended recently? The Bank made some bad mistakes in the past and we have to face up to that, just as we have faced up to the mistakes of the Financial Services Authority. Will he urgently accept the need for European Governments to shore up their banks, because there is very real risk, if we have a sovereign default in the next few weeks, that their banks will be affected because they are not adequately capitalised? If he is still on speaking terms with his opposite numbers, that is something that he should attend to very quickly.

[Mr Osborne]

I can assure the former Chancellor that we are still on speaking terms. Indeed, I had an hour and a half conference call just before I came into the Chamber, so I can promise him that a lot of speaking is still going on. The question he rightly asks is: where is the action? The eurozone has taken a number of important steps, but we still need to see a more credible firewall, which will enable it to stand behind its banks even more effectively.

On the right hon. Gentleman’s specific point about the Bank of England and whether this could have prevented what happened when he was Chancellor, of course institutions can get things wrong, and the Bank of England got things wrong in the run-up to the crisis, but it is sensible to try to have one body that is looking at both the prudential risks in individual firms and the overall systemic risks in the economy. The tripartite system clearly failed to do that. I do not think that before he became Chancellor it met in person at a principal level, or perhaps only once. The system did not work and many Committees of this House have pointed that out. For the Bank of England to have clear responsibility for monitoring risks is sensible. As to whether all this could have prevented what happened, I draw attention to two points. First, there are higher capital requirements in Vickers that would have better protected banks such as HBOS, and, secondly—the biggest challenge of all that he had to face—it is precisely the collapse of a large universal bank such as the Royal Bank of Scotland that Vickers is seeking to address. No one pretends that it is easy, but we believe, Vickers believes and many others believe, that the idea of ring-fencing the retail operations focused on the UK will give the Chancellor of the day greater opportunity to protect what really matters to the UK economy without having to resort to bailing out the entire institution.

[Mr Andrew Tyrie (Chichester) (Con)]

The House and the Chancellor will have heard the remarks made across the House about the need to strengthen the accountability of the Bank of England, which the Treasury Committee has already reported on, so I will not dwell on that. On the European angle, does he agree that the UK should be permitted to implement Vickers without awaiting the outcome of Commissioner Barnier’s latest announcement that he will review the merits of breaking up banks altogether, an idea explicitly rejected by Vickers, while at the same time not worrying about another of Mr Barnier’s curious and contradictory proposals, which is that a cap, as has just been mentioned, should be placed on the amount of capital UK regulators could demand of banks, which, if implemented, could prevent us from putting Vickers in place at all?

[Mr Osborne]

As I have said, I will return to the House early in the new year to address the issues that my hon. Friend’s Committee, other Members of the House and the pre-legislative Committee have raised about the accountability of the Bank of England and the accountability and responsibility of the Chancellor in a financial crisis. On his points about Europe, I understand that Commissioner Barnier, or the part of the European Commission that sits under him, is interested in the Vickers report and is looking at it, as is the European Parliament, which we welcome. On maximum harmonisation—in other words, not allowing individual countries with large banking systems to have their own regimes sitting on top of the EU minimum—that is something that other member states are concerned about. It was actually the Swedish Finance Minister who signed the letter that first raised concerns about that and got other Finance Ministers, myself included, to sign it, and the International Monetary Fund has also been very public in raising its concerns. We have not yet reached the point where the directive is about to be passed, but there is certainly a lively debate going on about it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. If I am to accommodate the level of interest in the statement, I will from now on require brevity, the textbook for which can be written by Sir Stuart Bell.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Building on my right hon. Friend the shadow Chancellor’s statement on bank lending to the small and medium-sized enterprise sector, has the Chancellor made any study at all of the impact of what he calls bigger cushions—raising capital requirements from 7% to 9%—on bank lending to that sector? Can he offer the House a guarantee that he will consider that as part of his consultation leading to his White Paper in the spring?

[Mr Osborne]

It is precisely to avoid a procyclical impact that the backstop for capital requirements is 2019, so there is quite a long timetable, which is consistent with the Basel agreement, but the hon. Gentleman is of course right to point out—indeed, the shadow Chancellor made this point—that the current situation in the eurozone is causing a stress on bank funding around the world. It was good to hear the shadow Chancellor acknowledge at the end of his remarks that the biggest single threat to British businesses, as I think he put it, is the current eurozone crisis, which is an analysis we share.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Still on the subject of brevity, I now turn to the person I would describe as the emeritus professor of that subject, Mr John Redwood.

[Mr John Redwood (Wokingham) (Con)]

Will the Chancellor take urgent action with RBS to create three new competitor banks from its assets and liabilities so that we can have real competition and more promotion of growth?

[Mr Osborne]

I have set out our view as the largest shareholder of RBS. We have to be careful of the shadow director rules and the like, but I was very clear in my statement that we expect and hope to see RBS shrink the size of its investment bank and focus on the UK and its UK customers. That is our proposal as an RBS shareholder. Of course, the question of how to dispose of our shares in RBS, which might arise in future, is one that we will address at the time.

[Malcolm Wicks (Croydon North) (Lab)]

Given the interesting speech recently made by the Prime Minister on the importance of Christian values, is there not a danger that the Chancellor and the Treasury as a whole are spending too long talking to the money changers and not enough time talking to more important elements of the British economy, such as manufacturers and small businesses? Does he feel that when Jesus overthrew the money tables he should have waited six years before acting?

[Mr Osborne]

I would not say that what we are undertaking is of biblical proportions, but we are acting now to deal with those problems. We are changing the system of regulation, which will be in place once the draft financial services Bill is passed next year; we are changing the competition remit, which will be in place by 2013; and we are committed to introducing all that legislation, including the secondary legislation, in this Parliament. We are undertaking those reforms, but in the years in the desert, which were the years under the Labour Government, none of those things was proposed at all.

[Stephen Williams (Bristol West) (LD)]

I congratulate my right hon. Friends the Chancellor and the Business Secretary on working together to provide a secure future for our banking sector and to put behind us the failures of the past. Uppermost in the public’s mind from the past will have been the £45 billion bail-out of the Royal Bank of Scotland, and, given that it is now under state ownership, could not the Chancellor consider its break-up to establish a challenger bank on the high street for lending specifically to small and medium-sized businesses in order to provide the finance for future growth and economic recovery?

[Mr Osborne]

I have already set out the Government’s view on the Royal Bank of Scotland, and the issue of what to do when we come to dispose of the shares will be one that we can all address at the time.

The document and the process have been a very good advertisement for the coalition Government. The Business Secretary and I have worked incredibly closely on the document, which is a joint one from us both, and people will not have read in the newspapers lots of stories about the “splits between us on the issue”—

[Ed Balls]

That was last week.

[Mr Osborne]

Getting a lecture on “splitism” from the shadow Chancellor, who has been the biggest source of division in the House over the 10 years that I have been in Parliament, adds to his lessons on how to regulate banks properly as something to treasure, but this document is a very good advertisement for the coalition Government and the work that we have done with the Business Secretary.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Chancellor for the statement, and for much of what was in it on Lloyds divestment, competition, account switching, retail ring-fencing and the final 2019 implementation date. I hope that that implementation will do nothing to weaken small and medium-sized enterprise lending, but what in particular did he mean by “RBS will make further significant reductions in the investment bank”? Can he put a cash figure on that? How much deleveraging does he see taking place? What does he envisage being sold off? Will it be in the UK or overseas? We need certainty about RBS’s future, so can we have some detail today, and will he confirm that he does not intend to undermine the independence of the board, notwithstanding the fact that the Government are the major shareholder?

[Mr Osborne]

The hon. Gentleman asks me not to undermine the independence of the board and, then, to provide all sorts of detail on exactly what the board should now do, so let me say this. I know that the Royal Bank of Scotland is a very important employer in Scotland and a very important part of the Scottish economy. We want to see it focused on its UK businesses, on UK corporate and individual customers, and its investment bank should support that service. The Royal Bank of Scotland management have also come to that conclusion, and in the coming months they will set out further details on how they are going to do that work, but it is a significant change of direction for the bank.

[Adam Afriyie (Windsor) (Con)]

Given the shadow Chancellor’s involvement in the biggest banking crisis in the history of our country, and given his overt criticism of the current Chancellor, will my right hon. Friend tell me whether he has received from him any constructive submissions at all during this period?

[Mr Osborne]

I do not think that I have received a single submission on banking reform from the shadow Chancellor since he took up his job.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Will the Chancellor of the Exchequer confirm that nothing he has announced today will for the next five years reduce in any way the risk to the British taxpayer in the event of a British bank losing out on sovereign debt in the European Union in a way that damages its retail operations?

[Mr Osborne]

There are things that we have done and are doing now to make our banking system safer. Banks are required to hold more capital—more cushion—to protect them against losses, whether from sovereign debt or anything else. We regularly take part in pan-European stress tests, and actually the British banks pass those tests when other European banks do not. I think that that is because the British banking system is well capitalised and liquid.

We are also introducing a new system of regulation, which, as I say, will be operational in 2013; once the legislation has passed through the House of Commons, the Bank of England will be in charge. Furthermore, we are introducing the Vickers requirements over the next three and half years, until the general election at the end of this Parliament—we are getting all that legislation through as well. We are doing a huge amount to make the British banking system safer now, but also safer in future.

[Mr William Cash (Stone) (Con)]

To protect the City of London, will the Chancellor follow the example of the Prime Minister when he used the veto the other day? When necessary, will the Chancellor here in Westminster override European legislation to protect the taxpayer, the City of London and the United Kingdom?

[Mr Osborne]

We need legislation that works effectively for British banks across Europe; British banks have subsidiaries in other European countries. Actually, a single market in financial services would be a very good thing—and it is a good thing for this country, although we need to see it deepen. We also need to make sure that countries with very large banking systems, such as our own, are able to take national decisions that protect our banking systems. I am confident that we can secure agreement to that.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is there not a possibility that if the banks are split up, there will be more top bankers than there are now? What we need in Britain is small business growth and large business growth. The chances are that the most reviled group of people in the land—the top bankers—are going to multiply.

[Mr Osborne]

I do not think that it automatically follows that if we ring-fence the banks, we double the number of bankers. It is our intention, yes, to have a successful financial services industry, which is very important in Derbyshire, Cheshire, where my constituency is, the west midlands and Scotland, as well as in the City of London.

However, we do not want our entire economy to be in hock to the City of London; that is what we are seeking to avoid. We do not want to put all our bets on the City of London. That is what happened over the last 13 years, and it went disastrously wrong. The Government are determined to build up other sectors of the economy, including manufacturing and small businesses. The very fact that later today we are debating the Government’s apprenticeship programme shows our commitment as a Government to building up those other industries.

[Mr Edward Leigh (Gainsborough) (Con)]

After these reforms, will our banks be more or less regulated than their international competitors?

[Mr Osborne]

In certain respects, they will be more regulated compared with some other regimes. Obviously, the ring-fencing requirement that we are introducing is not present in every other financial centre. However, it is an appropriate course of action for the UK, given the size of our banking system relative to our GDP—it is 500% of our GDP; the United States banking system is only 100% of its GDP. As I said, there is now quite a lot of international interest in what we are doing, so we may find that other financial centres follow our lead.

[Ann McKechin (Glasgow North) (Lab)]

The Chancellor rightly attacked casino banking. Does he not agree that now is the time to restrict UK state-owned banks in respect of their operations in tax havens, which have been a source of much of that casino banking?

[Mr Osborne]

We have required all the major banks in Britain to sign up to the tax code that the previous Government introduced, although they got only two or three banks to sign up to it. We not only have the code, but we are making the banks sign up to it.

[Michael Fallon (Sevenoaks) (Con)]

Does the Chancellor agree with me that if the three politicians identified as culpable in the Royal Bank of Scotland report had been serving in local government, they would probably have been surcharged? Does he think it likely that, in the fullness of time, other European countries will follow us along the road of a retail-wholesale split?

[Mr Osborne]

Two of those three politicians are now busy earning quite a lot of money in the financial sector to deal with the fact that they might face a surcharge. Perhaps, with the efforts of my colleagues, we can make sure that the third politician soon follows them.

[Ed Balls]

You wish.

[Mr Osborne]

Actually, we are quite happy for the right hon. Gentleman to stay where he is, so I retract my previous comment.

In response to my hon. Friend the Member for Sevenoaks (Michael Fallon), we are confident that we will be able to do this within the regime of European Union law.

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

Has the Chancellor assessed the impact on levels of net lending to business of corporate deposits, estimated at £270 billion for RBS, Barclays and Lloyds, potentially lying outside the scope of the retail ring fence? Who will decide which corporate deposits sit outside the ring fence—the new Prudential Regulation Authority or the banks themselves?

[Mr Osborne]

A key part of the Vickers report was that the location of the ring fence would be flexible. Certain things would have to be in the ring fence, such as small and medium-sized business overdrafts and deposits and the overdrafts and deposits of individuals, and certain things definitely could not be in the ring fence, such as investment banking activity. However, corporate deposits could either be in the ring fence or not in the ring fence; that would be a decision for individual institutions, although of course they sit under the regulatory regime. That is what John Vickers recommended, having looked at this very carefully, and that is the plan that we are now implementing.

[Lorely Burt (Solihull) (LD)]

I welcome the coalition Government’s commitment to implementing the recommendations of the Vickers report. What difference, practically, will it make to people in Solihull and elsewhere in the country, and by when will they start to feel that difference?

[Mr Osborne]

The intention is to make sure that the taxpayers of Solihull are better protected against the failure of banks in future in a way that they were not in recent years when banks such as RBS failed. That is the overall intention of the report, but it has a very important component that does not get nearly the same media attention as the ring-fencing element that we have all been talking about—namely, the promotion of competition. The report has a specific recommendation whereby, from 2013, customers in Solihull will be able to switch their bank account within seven days, at no cost, and all their direct debits and credits will follow them to their new bank account. That is a very practical benefit to the people of Solihull and, indeed, the entire country.

[Mr Denis MacShane (Rotherham) (Lab)]

Given that the Government are not spending and banks are not lending, is the Chancellor at all worried that he and Sir John Vickers are generals fighting the last war? Surely, rather than keeping a lot of money in vaults, we want it out there fructifying in the economy creating jobs and new businesses.

[Mr Osborne]

At times it feels like the current war as well. I do not think that the effects of the financial crisis have disappeared from our economy. Through these proposals, we are taking steps better to protect British taxpayers in the future. There is a decent implementation period for some of the recommendations, such as the loss absorbency recommendations, precisely to take account of what is going on in funding markets. It would be pretty extraordinary if this country, after all that it went through in recent years, with the biggest bank bail-out in the entire world happening here, did not learn the lessons of what went wrong and try to protect people in future.

[Andrea Leadsom (South Northamptonshire) (Con)]

The Vickers proposals definitely make banks more robust and more resolvable, but does my right hon. Friend think that they will definitely be more competitive? Specifically, the stickiness of personal current accounts and SME accounts is a real problem. Will he consider the proposal for full account portability rather than this halfway house which just makes it faster to transfer one’s bank account?

[Mr Osborne]

There is a specific reference to full account portability in the report, as my hon. Friend will see when she reads it, and that is there partly because of the point that she made to me about it in the Treasury Committee. We will consider full account portability if the switching service that we introduce is not effective and does not deliver the expected consumer benefits.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The House is not clear from an answer that the Chancellor gave to my right hon. Friend the Member for Morley and Outwood (Ed Balls) whether he supports the Vickers recommendation that in order to create an effective challenger bank, Lloyds needed to divest itself of a greater number of branches. Does he agree with that recommendation, and if so, when is he going to implement it?

[Mr Osborne]

We are confident that the sale proposed by Lloyds of 600 branches to the Co-op will create a sufficiently strong challenger bank because it is to an existing institution rather than a new institution. Obviously, that sale is subject to commercial negotiations and the deal is not yet done, but we think that it meets the conditions set out in the Vickers report. We have kept in close personal contact with John Vickers throughout this process.

[Mark Field (Cities of London and Westminster) (Con)]

The Chancellor has acknowledged that the Vickers recommendation would gold-plate the already onerous capital requirements on EU banks, as set out in the Basel III protocol. Does he recognise that if the figures were implemented in full, there would be the twin risk of diminishing the attractiveness of London as a global financial centre and further disincentivising corporate lending by UK banks, which is an essential part of the economic recovery and growth that we all support?

[Mr Osborne]

I do not think that it will discourage corporate lending, nor do I think that it will make the UK any less attractive as a location for the headquarters of global banks. We addressed that issue explicitly in our response. Because the principal proposals and additional national requirements are directed at UK retail banking, I do not think that it will change people’s view of the UK as an attractive place to locate their financial services, whether it be in the City of London or elsewhere.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

I welcome the Chancellor’s conversion on bank regulation. I remind him that there are more bankers and former bankers behind him than there are behind me. [Interruption.] I mean on all the Benches behind me. Why can he not bring forward the 2019 timetable? That is what my constituents want to know.

[Mr Osborne]

The 2019 timetable was recommended by John Vickers in the report. People should be clear that that is the backstop. That is the final day when everything has to be implemented. In particular, if the additional capital requirements were implemented today, it might have an impact on the economy that we would not want to see. The ring-fencing legislation will be in place by the end of the Parliament and banks will be expected to comply with it as soon as is practically possible. The competition requirements will be in place by 2013. When it comes to jibes about who is working in the financial services, I seem to remember that a number of former Labour Prime Ministers are now quite lucratively paid in the financial services.

[Steve Baker (Wycombe) (Con)]

Chapter 3 of the Government’s report, on loss absorbency, seems, perhaps reasonably, to take for granted the adequacy of accounting standards. I press the Chancellor in his forthcoming White Paper to consider seriously the pernicious effects of the international financial reporting standards, which were applied to banks by the previous Government.

[Mr Osborne]

There is a debate to be had about international accounting rules and their impact on the financial crisis, which I am happy to have with my hon. Friend in person. There are moves afoot to make the international bodies that set the standards more accountable by using the Financial Stability Board. He raises a good issue.

[Kevin Brennan (Cardiff West) (Lab)]

What assessment has the Chancellor made of the proposal in the ICB report to apply a blanket leverage ratio across all financial institutions, and in particular of the possible unintended consequences that that could have for building societies?

[Mr Osborne]

That is an issue that some building societies have raised with us. That is why we say in the report that we are attracted to a leverage ratio—indeed, it is now part of the international regulatory architecture—but that we will consult on exactly how to implement it so that it does not have a perverse impact on building societies, which have served customers well throughout this period.

[Richard Harrington (Watford) (Con)]

On behalf of my knees, Mr Speaker, I thank you. [Laughter.] I commend the Chancellor on his statement. Will he confirm that had these proposals been implemented before 2007, the RBS-ABN AMRO deal could not have taken place?

[Mr Osborne]

The RBS-ABN AMRO deal stands out as the moment of greatest folly in banking regulation, not just because—[Interruption.] The shadow Chancellor was the City Minister. He has incredible amnesia about his role, but thankfully we are here to remind him. It is extraordinary that the ABN AMRO deal was given the go-ahead after Northern Rock had failed. People do not appreciate the fact that it happened after that. We were highly critical of the Government’s regulatory system then, and we remain highly critical of the regulatory system that we inherited.

[Keith Vaz (Leicester East) (Lab)]

On 16 June 2010 the Chancellor told me that he would read the confidential parts of the Bingham report on the closure of the Bank of Credit and Commerce International and seek urgent advice from the Treasury about whether he should publish them. I do not know what the definition of “urgent” is in the Treasury, but 18 months seems like a very long time. I know that he has been busy, but has he read the report and will he now publish it?

[Mr Osborne]

The good news is that I have read the report. The bad news, from the right hon. Gentleman’s point of view, is that I do not propose to publish the appendices. Of course, my predecessors also took that decision. I have looked into the matter, and the view remains that publishing the appendices would not add substantially to people’s understanding of what went wrong, and that they would probably require extensive redacting, which would not only be expensive but still leave people with suspicions, even if those suspicions were unfounded. I have taken the same view that I believe the last three or four of my predecessors took.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I think the hon. Member for Watford (Richard Harrington) has set a trend of leaning forward expectantly, and the hon. Member for Erewash (Jessica Lee) is now following in his wake.

[Jessica Lee (Erewash) (Con)]

Does my right hon. Friend agree that one key conclusion of the report is about customers’ ability to move their accounts more cheaply and easily? That will be well received by people in Erewash and elsewhere. Banks are there to provide a service, and that is the type of measure that will significantly increase competition and aid this country’s recovery.

[Mr Osborne]

My hon. Friend is right, and she speaks up well for her constituents, who want greater choice on the high street. They want to be able to switch their bank accounts easily, and there are significant proposals in the report to help them do that within seven days and without having to chase up all the direct debits and the like, which will be done for them at no charge. That will be a practical benefit of the Vickers report and the Government’s implementation of it.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Chancellor give the House a categorical assurance that he has now fully recovered from his dangerous flirtation with deregulation, and that he will be able to avoid any further advances from the right hon. Member for Wokingham (Mr Redwood)?

[Mr Osborne]

If the hon. Gentleman examines what the Government and I have done over the past 18 months, he will see that we want proper regulation that works, enabling consumers to make choices and market forces to operate where appropriate while protecting the British taxpayer, with the Government stepping in where necessary. The report that we commissioned from John Vickers sets out a very important point about the regulation of bank structure that the previous Government did not examine. It represents a significant advance by this Government.

[Duncan Hames (Chippenham) (LD)]

The public are impatient for reform and proper regulation of our banks, so I applaud the Chancellor’s dexterity in separating the timing of the loss absorbency requirements from that of the requirements for increased competition and the introduction of a ring fence on high street banking. Having decided to introduce that ring fence, what is preventing him from doing so before 2015?

[Mr Osborne]

We have made a clear commitment—Sir John Vickers set the back-stop at 2019, but we have said that we want the legislation to go through by 2015. My hon. Friend has to appreciate, and I am sure he does, that it is about passing not just the primary legislation but the secondary legislation through Parliament. That is a very complex matter, because we do not want the banks to find a way around secondary legislation and we do not want to come up with rules that turn out to be full of holes. It is detailed, technical work, but we are absolutely determined to do it and have given ourselves a clear timetable for delivering it.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

How much money has the City of London donated to the Conservative party since the general election?

[Mr Osborne]

rose—

[Mr Speaker]

Order. In framing his response, the Chancellor of the Exchequer should be aware that if it is related in any way to banks, he is welcome to answer, but he is not obliged to do so. The question must relate to the specifics of the statement. It is up to the Chancellor.

[Mr Osborne]

indicated dissent.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s excellent statement, and I also understand why progress on ring-fencing has to be slow. Will he confirm that the guarantee for eligible retail deposits does not necessarily extend to the banks themselves?

[Mr Osborne]

The financial compensation scheme is very clear. We cover 100% of eligible deposits, up to £85,000 in a subsidiary. It is important that people are aware of that, and I think the public are more aware of it than they were three or four years ago. We want the explicit taxpayer guarantee of people’s deposits; what we do not want is the implicit taxpayer guarantee of the banks that took those deposits.

[Jim Shannon (Strangford) (DUP)]

I welcome the Chancellor’s statement. Will he confirm that the legislation will apply to mutual societies? If so, would it have prevented the crisis in the Presbyterian Mutual Society in Northern Ireland?

[Mr Osborne]

One of the things we are considering is whether there should be a de minimis exemption from the regulations for smaller banks and building societies. Vickers proposed that in the interim report, but not in the final report, so this is an area where we are looking at the interim report, rather than the final report. However, we will consult, and the views of Members from Northern Ireland and others will be welcome in that process.

[Stephen McPartland (Stevenage) (Con)]

Does the Chancellor agree that there is no painless way of reforming the banks and that the banks have to accept a little pain now, so that the Government can protect taxpayers from future bail-outs?

[Mr Osborne]

The banks themselves—inasmuch as we are talking about shareholders who own them—will benefit from a safer banking system. Among the casualties of the banking crash were shareholders of the Royal Bank of Scotland, Northern Rock and the like. They lost money too and, as my hon. Friend well knows, they were not all immensely rich City people; rather, many were actually on quite low incomes. The shares were their main source of savings, so the shareholders also lost out. Owners of banks, including small shareholders, will benefit from a safer banking system.

[Mr David Nuttall (Bury North) (Con)]

Given that the UK’s four largest banks hold seven out of 10 personal current accounts and eight out of 10 of the current accounts of small and medium-sized businesses, will my right hon. Friend reassure me that the proposed new legislation and regulation will neither result in banks leaving the UK or being deterred from expanding, nor deter new banks from opening in the UK, thereby reducing competition and restricting choice for customers?

[Mr Osborne]

The reforms will make the UK an attractive location for international financial services, which will know that our system is better regulated, and for retail banking, because customers will have greater assurances that the banking system is safe and that they will not have to bail out the banks if they go wrong.

[Matthew Hancock (West Suffolk) (Con)]

I very much welcome the report, which, along with all the other measures, I hope will help to change the culture of finance. With that end in mind, will the Chancellor set out what he hopes we can achieve in terms of having a direct impact on individuals’ personal pay and compensation in the financial sector?

[Mr Osborne]

We expect the bonus pool to be lower than last year and very much lower than four or five years ago, when it was probably four times what it will be now, so bonuses have come down. We have a very transparent regime, which did not exist when we took office, with the pay of the eight highest-paid non-board executive members now having to be disclosed. Above all, however, people should pay attention to what the Financial Policy Committee has just advised, which is that banks should retain earnings to build up capital at a time such as this, not pay them out in bonuses. The Governor of the Bank of England, the Financial Services Authority and I have all made it clear that banks would do well to pay attention to that advice over the next couple of months.

[Jason McCartney (Colne Valley) (Con)]

Does the Chancellor agree that the high street banks have a key role to play in regenerating our towns and rural communities, by continuing to have a presence on the high street?

[Mr Osborne]

Yes, I do, and, to be fair, the banks themselves acknowledge that they withdrew from the high street too much. We want to get back to more of that face-to-face banking that served our country well for many decades. As I have said, the banks acknowledge that, and they have come together to create the business growth fund, which will invest in new start-up businesses. They have also issued a new code of conduct to enable them to get back to the high street banking that we remember from the past.

[Mr David Hamilton (Midlothian) (Lab)]

On the subject of the personal responsibility of directors, I should like to draw the House’s attention to Fannie Mae in America, some of whose directors are being charged and, if found guilty, could face prison. Is there anything in the Chancellor’s proposals that could put directors in this country in the same boat, in that they could be sent to prison if they were found guilty of doing something wrong?

[Mr Osborne]

There is nothing specifically about that in the Vickers report, but the Financial Services Authority has done an investigation into what happened at the Royal Bank of Scotland, and has made specific recommendations on the law regarding bank directors. It turns out that the laws were inadequate to help the authorities to investigate specific individuals at RBS and HBOS, so we are going to look at the recommendation, which came to us only recently, and see whether we can implement it, to ensure that individuals as well as institutions can be held responsible for their actions.

[David Mowat (Warrington South) (Con)]

There is no agreed definition of which bank functions may be included in the ring fence, and which may not. There is therefore a risk of fudge as the proposals are rolled out over the next few years. Will the Chancellor agree to ensure that that is defined in primary and secondary legislation, and not simply left to the regulators to argue over with the banks?

[Mr Osborne]

There will be clear definitions in the legislation. To be fair, what John Vickers recommended, and what we are proposing, is relatively straightforward. There are certain things that will have to be in the ring fence, such as the deposits of individuals and the overdrafts of small businesses. There are also certain things that cannot be in it, such as classic investment banking activities. There will then be a middle ground, which will essentially involve corporate lending, and that can either be in the ring fence or not. John Vickers thought that it would be wrong to prescribe that, because different banks have different models, so he has left the location of the ring fence flexible. However, the height of the fence will be high, and we are going to introduce it into legislation.

[Nicky Morgan (Loughborough) (Con)]

I welcome the emphasis in the Chancellor’s statement on more choice and competition, which will benefit businesses in my constituency and elsewhere. They often tell me that this is not just about bank lending, and that it is also about poor customer service and unexpected charges being imposed. Will my right hon. Friend confirm that this is just the start of a process, and that there will be continuous monitoring of the way in which banks treat their customers from now on?

[Mr Osborne]

There will be, and part of the new regime will involve a specific authority looking at competition and customer service. In that way, we shall avoid having one institution—namely, the FSA—trying to do both functions of a regulator, which are to look at the point-of-sale service that someone gets to ensure that they are being sold a product correctly, as well as ensuring that the bank itself is being properly managed and is not about to collapse. Separating those functions will be an essential part of our reforms.

[Charlie Elphicke (Dover) (Con)]

May I urge the Chancellor to consider a whole in-country depositor preference system, such as that in the United States, rather than the insurance-based system recommended in the Vickers review? This would, over time, discourage reliance on the wholesale short-term funding markets. It would also reduce the risk to the taxpayer of banks that are too big to fail.

[Mr Osborne]

I am happy to consider my hon. Friend’s views, but we are equally clear that the depositor preference proposals in the Vickers report are the ones that we support in principle; their implementation in practice will be addressed in the White Paper.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that the ring-fencing outlined in the proposals will not only protect the taxpayer from casino banking but have the longer-term benefit of encouraging more competition by creating a fairer and more even playing field for small banks, which would be to the benefit of all?

[Mr Osborne]

We want to see more competition, which is why we proceeded with the sale of Northern Rock and why we are pleased to see Lloyds seeking to sell its branches to the Co-operative bank. It is also why we want to see other challenger banks out there. We are also considering a de minimis exemption for some of the smallest banks; we will report back on that when we publish the White Paper.

[Tony Baldry (Banbury) (Con)]

Small businesses in Banbury, Bicester and elsewhere will welcome the enhancement of competition in high-street banking and the fact that it will be easier for them to move accounts. Will my right hon. Friend explain, however, why it is going to take until September 2013 for these changes to be implemented? If the banks had the will, surely they could implement those changes much more speedily.

[Mr Osborne]

I believe this is quite a complex operation. We have looked at this, as has John Vickers—and he thought 2013 was the appropriate timetable. We are trying to create a seamless service through which people can indicate that they want to change their current account; that happens within seven days without any charges and all the direct debits and the like will follow people to the new bank. It is, as I say, quite complex to achieve and we want the service to be seamless for the customers, so I would rather spend a few months to get it right rather than try to rush its introduction.

[Glyn Davies (Montgomeryshire) (Con)]

Notwithstanding the benefit to individual taxpayers, the banking sector is unlikely to welcome the separation of its retail banking from its investment banking activities, so will my right hon. Friend assure us that he will stand his ground and ensure that our banks cannot look to the taxpayer to save them from the consequence of high-risk borrowing in future?

[Mr Osborne]

I can absolutely assure my hon. Friend that we will stand our ground. While I have been on my feet, I have received the news that John Vickers has welcomed our response. I absolutely commit to my hon. Friend, to John Vickers and to others that we will implement the proposals in the report to make sure that our banking system is safer, that taxpayers are better protected, that customers get a better service and that we do not repeat what went so badly wrong under the previous Government’s regulatory regime.

[Andrew Stephenson (Pendle) (Con)]

Given the dominance of the four largest banks in the UK, does my right hon. Friend agree that, in addition to new banks, credit unions such as the Pendle Community Credit Union or building societies such as the Marsden building society headquartered in Nelson in my constituency have a key role in improving competition on the high street?

[Mr Osborne]

I think credit unions and small building societies have a key role to play, whether it be in Pendle or other parts of the country. What we want is the greatest possible choice for customers. This report is an important step towards providing that competition and dealing with the large banks that have such a large proportion of the market. The competition part of the report is important and sits alongside the ring-fencing part—all designed to make our banking system safer and to serve customers better.

[Mr Philip Hollobone (Kettering) (Con)]

My Kettering constituents would like to see more competition between the high-street banks. At the moment the big four banks have about 77% of all personal current accounts and 85% of all small business accounts. Would the Chancellor like to see those market shares fall; and, if so, by how much?

[Mr Osborne]

I would like to see them fall, which is why we are keen to get challenger banks out there. It is why we proceeded, as I have said, with the sale of Northern Rock, and why we want the Lloyds divestment to take place. As for what the exact market share of those banks should be, I do not believe, perhaps unlike my hon. Friend, in the command economy in which the Chancellor of the Exchequer determines every share of the market for every business. I will not prescribe exactly how much market share a bank should have; there has to be an element of the free market .

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I welcome these recommendations for regulation. It might come as a surprise or, indeed, a shock to Members to learn that I was refused my first mortgage application. That happened back in the days when mortgages to first-time buyers were capped at two thirds of the value of the property. Under the previous Government, however, first-time buyers could get 100% or 125% mortgages. Will the Chancellor confirm that those days of irresponsible lending are behind us?

[Mr Osborne]

We have not much mentioned today the report from the Financial Services Authority, which is about ensuring that people can afford the mortgages they seek. The changes are important, as they get the balance right between not pricing first-time buyers out of the market even more than they are now and ensuring at the same time that people are informed and can get a mortgage that they are able to afford.

Fisheries Council

Monday 19th December 2011 Commons Chamber

17:19

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I wish to inform the House of the outcome of the discussions on fisheries at last week’s Agriculture and Fisheries Council, at which I represented the United Kingdom for the fisheries elements of the agenda, while Richard Lochhead, Michelle O’Neill and Alun Davies represented Scotland, Northern Ireland and Wales respectively. I am aware that that many Members are very interested in the annual fisheries discussions, and I am grateful for the opportunity to inform the House of the outcome of this year’s negotiations.

The annual December round is always a difficult negotiation, but this year we went into it facing a greater challenge than we have confronted in recent years. Just under a month ago, the Commission published a regulation on the cod recovery plan that would have had dire consequences for significant elements of the UK fleet. We had not only to negotiate the annual total allowable catch and quota allocations, but successfully to negotiate a resolution of the threat of massive cuts in the time that our fishermen can spend at sea under the cod recovery plan. I am pleased to report that we managed to achieve both those outcomes.

We stated and won our case for our interpretation of article 13 of the cod recovery plan. That means that we can continue to offer incentives, in the form of additional days at sea, to fishermen who undertake additional conservation measures. Without that correction in interpretation, more than three quarters of the fleet would have had their fishing time cut drastically short, in some cases to just four days a fortnight. This important victory means fleets can go on fishing and catching their quota, while continuing the ground-breaking cod avoidance and discard reduction schemes that are being developed and implemented by fishermen all around our coast.

I know that the fact that—except in regard to the regulation that I mentioned a moment ago—we were unable to avoid reductions in days at sea has come as a blow to significant parts of the industry, and I share their disappointment. However, the Commission felt that significant legal obstacles, as well as resistance from a number of member states, prevented it from not cutting the number of days at sea. That said, the Commission has made it clear that the cod recovery plan is not meeting its objectives, and has agreed that the review that I secured last year must be accelerated as a matter of urgency. I hope that it will be possible to revise the rules without a full-blown co-decided revision of the text, but if that is needed, we will work hard with the Commission to create mitigating technical measures that will maximise the opportunities available to our fishermen.

Let me now turn to the TACs and quotas for next year, which constituted the main issue on the Council’s agenda. Since the Commission’s proposals were published in the autumn, we have consistently argued that we should follow the science, and should aim for the securing of sustainable fish stocks in our seas. That was particularly important in the context of tackling the so-called data-poor stocks. The Commission’s proposal that quotas should be reduced by up to 25% did not take into account all the information that the fishing industry and scientists had been collecting, or the implications of such cuts, both in economic terms for the fleet and for discards. Significant cuts in by-catch species, for instance, would have been likely to result in a substantial increase in discards. That is completely contrary to the policy of both the UK and the Commission, which is to eliminate discards.

We successfully negotiated amendments to the Commission’s original proposal for TACs and quotas—amendments that are worth an additional £36 million to the UK fleet. We secured the continuation of this year’s quota allocations for the majority of stocks, including North sea and west of Scotland megrim, whiting in western waters, and pollack and sole stocks along the west coast. I can give more details if Members require them, but a couple of noteworthy gains included a 200% TAC increase in west of Scotland haddock, a roll-over of Northern Ireland nephrops, and a 150% increase In south-western cod. The UK battled hard to reach an agreement that ensures the long-term sustainability of fish stocks while providing short-term catching opportunities for our fishing industry. The package we secured helps all sectors of the industry, large and small, and delivers benefits for all parts of the UK, north, south, east and west.

I would like to put on record my thanks for the co-operative manner in which colleagues from Scotland, Northern Ireland and Wales contributed to the discussions. In the event, all Administrations were able to agree to the final deal. I would also like to stress that the overall package of measures was negotiated with close and constructive co-operation with the European Commission and with other member states, most notably France, Germany, Spain, Denmark and Ireland. This shows that the UK is playing a firm and constructive role in Europe, getting the best deal for the UK and its fishermen. This was a good result for the UK fleet and, equally importantly, a good result for the long-term sustainability of the stocks that our fleet fish.

[Fiona O'Donnell (East Lothian) (Lab)]

I congratulate the hon. Gentleman on at least managing to stay in the room with his European colleagues until 4 am, unlike the Prime Minister. I also congratulate him on exposing the two faces of the Scottish National party on Europe: on the one hand it promises to get out of the common fisheries policy, while on the other hand it says it wants to be a leading player in the EU.

A sustainable and profitable fishing industry is vital to the UK’s economic interests and to coastal communities around the UK. Some 12,000 fishermen are employed on UK boats, with just over 5,000 working in Scotland. The fishing industry is particularly important in Scotland. I grew up in the highlands of Scotland, and on a recent visit to the Western Isles I had a chance to speak to the fishermen in those fragile island communities. Fishing provides employment not only to the men I met in Tiree, Barra and Lewis, but to women as well, in the processing of the catch. May I ask the Minister whether he has visited the Western Isles, and if he has not may I urge him to talk to those men and women, so he can see for himself the impact the decisions he makes has on these fragile communities? Without a good deal from this Minister, the very existence of those communities is at risk.

The case for reforming the CFP is compelling. At present, almost half the fish caught in the EU are discarded, which is both an economic and an environmental waste. In July, this House unanimously adopted a motion urging the Government to support radical changes to the CFP. The Commission published its draft reform proposals on 13 July. What guarantees can the Minister give that the Government’s position on discards and CFP reform will not lose out in future negotiations? What progress is he making in advancing the case for the regional management of fisheries waters, a move that would be welcomed by the UK fishing industry?

I pay tribute to the Scottish fishing fleet, which has already reduced discards and introduced CCTV as part of catch quota to better manage fish stocks. What investment in scientific evidence is the Minister proposing to make as we move to long-term management of fishing stocks?

The verdict on this Minister is in: the fishing industry and conservation groups have described his deal as a disaster. In November he met representatives of the fishing industry and stakeholders to agree the UK’s red lines for the negotiations, including rejecting any calls to cut the number of days that fleets can spend at sea. On 5 December he issued a press statement saying his discussions with Commissioner Damanaki on the amount of time fishermen can spend at sea were very positive, yet his deal will mean a cut of between 15% and 25% in the number of days white-fish vessels can put out to sea in 2012 as part of the cod recovery plan. Fewer days at sea could lead to the unintended consequence of more damage to fish stocks and higher levels of discards, as fleets rush to catch all they can in their allotted time. Will the Minister explain why he abandoned his red line last week? Will he confirm that some vessels will see their period at sea cut to about four days in every fortnight? Will he tell us how many vessels will be affected and what the position of the Scottish fisheries Minister was on this issue? How difficult was it for the Minister to build alliances to support his red line? What went wrong? Bertie Armstrong, chief executive of the Scottish Fishermen’s Federation, said:

“This is a bitter blow for our fishing fleet, which is now going to struggle to maintain economic viability under the impact of these…unwarranted cuts.”

What is the Minister’s message to fishing communities who feel betrayed by his broken promises?

I welcome the 200% increase in respect of west of Scotland haddock, the 150% increase in respect of south-west cod and the deal for fishing fleets in Northern Ireland. What assessment has he made of the ability of the fleet to use the extra quota, given that they will be at sea for fewer days? What impact does he believe the overall package will have on the number of fishing vessels that will be viable next year? What assessment has he made of the impact of the reduction in the number of days at sea on the financial viability of the Scottish fishing fleet and fleets elsewhere in the UK?

Next year, we have a once-in-a-lifetime opportunity to reform the CFP. What reassurances can the Minister give the House that the Prime Minister’s stance on Europe will not isolate us in discussions and ultimately harm the British fishing industry?

[Richard Benyon]

I thank the hon. Lady for her warm welcome—I am attempting irony, which never quite works from this position. She really needs to understand that at the beginning of last week we were looking down the barrel of a gun at cuts that could have resulted from a penalty regulation introduced by the Commission. Its interpretation of the cod recovery plan could have resulted in between half and two thirds of the Scottish fleet being put out of business, the Northern Irish nephrops fleet being tied up for 11 months of next year and a great many other vessels and fleets around the country being put out of business. We argued that both at meetings last week and at the end of the week at the Council and we got things reversed. We did so by close working with Ministers from other devolved Governments, and I thank them for their efforts.

If the hon. Lady looked into the details, she would see that although vessels will have a reduced number of days at sea next year, what we secured, through our interpretation of the cod recovery plan, was the ability for them to buy back days at sea by the imposition of other methods of conservation. So she simply has not understood the difference between the control order that the Commission has now withdrawn and the remains of the cod recovery plan.

The hon. Lady asked me to visit the Western Isles. I have done so in the past but not in this role, and I will certainly do so in the future. My right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) has reminded me that I am due to visit Shetland soon, and I see such visits as an important part of my job as UK Minister. She rightly says that there is an important social element to this, because the men who risk their lives to get this healthy and much-needed food on to our plates also support people in ports.

The Government remain absolutely committed to reform of the common fisheries policy. I sat up until 4 o’clock on Saturday morning arguing about net sizes, the gauge of nets, the Orkney trawl and eliminator trawls—such details simply should not be the subject of a management system where the people imposing regulations on the fishery are sometimes located 1,000 miles away from the fishermen who are supposed to use them. We must have reform that is more decentralised and that gets away from the micro-management that has failed. I believe that last week exposed a system that is obsessed with process and therefore ignores outcomes. The cod recovery plan is not working because the Commission sticks so rigidly to the process and the rules and regulations.

What we have achieved is a realisation from the Commission that it must start to look at the process, because the outcomes we all want to achieve are being lost. The hon. Lady is right that Scotland’s fleet has done many good things. It has led the way in real-time closures and selective measures, but it has not done so exclusively. Wonderful work has been done around the United Kingdom and we want to see it being brought forward. That is why we have secured the science budget, which the hon. Lady asked me about, to ensure that the information we can give the Commission is accurate. We faced 25% cuts in total allowable catch for data-poor stocks, but we managed to argue against that, not out of a blind desire to let our fishermen go fishing but because there was scientific evidence for it.

When the hon. Lady talked about last week, she talked as though Britain was somehow isolated in Europe. Nothing could be further from the truth. My right hon. Friend the Secretary of State is today at the Environment Council and she will have the same experience as I had, which is of a close working relationship. I built alliances with the French and the Germans, and, as I said, with the Spanish, the Irish, the Danish and those from many other countries. I can assure the hon. Lady that Britain is far from being isolated in these matters.

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

I congratulate the Minister on his stamina and on delivering an agreement that was in the best interests of Britain. What does he understand centralisation to mean under the fishery reforms? I hope he will join me in wishing Denmark well as it takes over the presidency. Does he share my concern at the lack of science? He referred to the data-poor species, but we are proceeding with these annual rounds with a complete ignorance of the science about the stocks and climate change, warmer waters and the movement of species. Will he also give us an undertaking today that our inshore fishing fleet will not be disadvantaged in the future reform of the common fisheries policy?

[Richard Benyon]

My hon. Friend will know that I have been particularly keen in this job to see a better deal for the inshore fleet. I believe that the pilots we are about to start will show a new way of managing the inshore fleet and I can assure her that the scientific evidence we require for that will be vital. As we roll out the Marine and Coastal Access Act 2009 and the marine conservation zones, we will see further investment in information about what is going on in our seas, on the seabed and so on, to ensure that we protect those areas as much as possible.

My hon. Friend asked about regionalisation and it is vital that we get this right. This is a once-in-a-decade opportunity, and, frankly, I do not believe that we will have another chance if we do not get it right this time. Decentralisation must mean an end to the top-down detailed decisions that I described earlier being taken so far from the fisheries. The problem we have in the United Kingdom is that our fisheries are complex. They are mixed fisheries with species swimming alongside each other, which means that if one species is targeted another is caught. Systems of management such as the cod recovery plan that operate from the sub-Arctic waters of the north down to the waters of Spain simply do not work because they are a one-size-fits-all solution and that simply does not work with fisheries.

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

Will the Minister guarantee that the result of the Council last week still places the European Union on target to achieve maximum sustainable yield by 2015? Does not the outcome of the Council make a powerful case for the introduction of long-term reforms to the CFP and of long-term catch quotas to deal with the problem of by-catch and discards? Is not that reform preferable to the abolition of the CFP, which is the policy of Scotland’s separatist party?

[Richard Benyon]

The hon. Gentleman makes an important point. We very much stick to our international agreed position of seeking to achieve maximum sustainable yield where possible by 2015 and good environmental status by 2020. He is right that long-term management plans are the way forward. I have just been rubbishing one long-term management plan, the cod recovery plan, which is a bad plan. What we want is good long-term management plans, and we certainly can achieve that. The problem with the common fisheries policy is not that it is common but that the policy is wrong. We will always need a degree of common working and all but a very few people in this country recognise that where there is an arbitrary line, such as the one that goes down the Irish sea or the median line through the channel, fish do cross those boundaries. We simply cannot work our management systems on just one side of that line; we must work on an ecosystems basis. That is why we need co-operation with other countries.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

May I suggest speedier answers and quick questions? Then, we will get everybody in.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on resisting the more extreme ideas that came from the summit over the weekend. Does he accept, though, that one of the dangers is that as a result of the cuts in the number of days at sea, fishermen may not be able to catch their full quota? Will he undertake to keep the position under review and, if that proves to be the case, go back to Brussels in a year and argue for changes?

[Richard Benyon]

One of the most ridiculous outcomes of the penalty that was due to be imposed on British fishermen was that they would not have had enough days at sea to catch the quota they were allocated. We managed to stop that. We will constantly keep that under review and we are working hard to make sure that the problems that the fishing industry faces through the reductions in days will not continue in future years.

[Angus Robertson (Moray) (SNP)]

I am grateful for advance sight of the statement and acknowledge the efforts of the Minister, Richard Lochhead, and other colleagues at the discussion, but does the Minister not acknowledge that this annual merry-go-round in Brussels is just not fit for purpose for the fishing industry or for the marine environment, so when will we see proper regional management come into force?

[Richard Benyon]

The hon. Gentleman is right. It is a circus. It is not a way to do business. We cannot make decisions in this way, working through the night and finding that the direction that we are seeking to take is thwarted by other countries working in a different way in an entirely different sea basin. It is not a good way of making any decision, so reform of the common fisheries policy, which we are discussing in the coming year with a view to a more regionalised system of management becoming possible in 2013, is a priority for this Government.

[Amber Rudd (Hastings and Rye) (Con)]

I know that the Minister is aware that 10 days ago the Environment, Food and Rural Affairs Committee met in Hastings and took evidence from fishermen. May I let him know that the local fishermen whom we spoke to are very concerned about transferable fishing concessions, and may I urge him in all his conversations to bear in mind their differences on the under-10-metre group?

[Richard Benyon]

I am very aware of the fishermen’s concerns, which I share. Transferable fishing concessions may have application with certain vessels in certain fisheries, but by no means all. That is why we need localised management. Member states should be able to take decisions to apply such measures in a way that suits some, but not necessarily all, of their fleet.

[Mr Iain Wright (Hartlepool) (Lab)]

A large proportion of Hartlepool’s fishing fleet comprises boats under 10 metres. The Minister did not mention that in his statement. Specifically, what did his late-night work help to achieve for that category of the fleet?

[Richard Benyon]

I am delighted that we are able to report that there were considerable increases in stocks that will benefit fishing out of the hon. Gentleman’s constituency, and that we were able to invoke the Hague preference, which is of particular importance to fishermen in the north-east. We secured increases in whiting, which is of particular interest to his constituents, and I very much hope that we will be able to continue the scientific work that we are doing with fleets based in the north-east on a land-all system so that we can learn what a discard-free fishery means, following it right through the food chain.

[Neil Parish (Tiverton and Honiton) (Con)]

I congratulate the Minister on standing up for British fisheries, and compliment him on the deal he got for cod in the western approaches. On the cod recovery plan, he should not have to defend our plan when we are stopping discards. Should we not get the Commission to endorse more of our plans, rather than having to defend them?

[Richard Benyon]

My hon. Friend is absolutely right. There has been some really good work in this country on reducing the number of discards, which was acknowledged by the Commission, so it was rather perverse that there was the possibility of measures being introduced that could have brought an end to precisely that good work. In his area, for example, Project 50% saw a more than 50% reduction in the number of discards in the beam trawler fleet. That would not have been possible under the proposed reduction in days that we were facing but luckily managed to reverse.

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the Minister on the hard work done in Brussels along with the other Ministers, including our own Northern Ireland Minister of Agriculture and Rural Development and Fisheries Minister. The Minister fought hard to ensure that prawn quotas were retained although the scientific evidence showed that they should have increased. The herring quota was also decreased although, according to the scientific evidence, it should have been increased. Will the Minister comment on the state of play at the sentinel fishery? We met some of the fishermen the week before he went away and we were told it was being investigated. I believe that the figures for that scheme will show the abundance of cod in the Irish sea.

[Richard Benyon]

I was particularly worried about the impact on the Northern Irish fleet. The initial proposal would have meant that many of them would have gone out of business. They could not survive if they were tied up for 11 months of the year and I am glad we managed to reverse that. I am glad that we also managed to reverse the proposed 19% cut in Irish sea nephrops, which was totally unjustified, and we were able to prove the science behind it. I was very interested by the proposal that the hon. Gentleman brought to me about a sentinel fishery in the Irish sea. We are looking into it and I will be in touch with him as soon as I have some information.

[Sheryll Murray (South East Cornwall) (Con)]

I thank my hon. Friend for both his stamina and determination in securing an increase in many stocks that my fishermen rely on, particularly cod in area 7B to K. Will he explore the possibility of top-slicing the additional quota that he secured, creating a reserve for the under-10-metre fleet, thus avoiding the disastrous situation we had under the last Government when, in 2008, the under-10-metre fleet in Looe was tied up because the quota was exhausted by the end of February?

[Richard Benyon]

I am delighted that fishermen have been telling me at great length, not just in the south-west, but certainly in the south-west, that they are seeing more cod now than they have seen for a great many years. That has been backed up by the science and we were able to secure an increase of 150%. That was a good result. Haddock is also up 25% and whiting up 15%. The package is worth £1.3 million in total to the fleet in the south-west. The managing director of one producer organisation told me in the small hours of Saturday morning that at the start of last week he was looking at a £250,000 cut to his members, which would have been devastating, but by the end of it we had secured a £250,000 increase. I will certainly look at my hon. Friend’s proposal for the under-10-metre fleet as well.

[John Cryer (Leyton and Wanstead) (Lab)]

At the beginning of the statement the Minister mentioned that the agreement was supported by France, Germany and Spain, among others. I bet they supported it; they saw him coming. If the number of days at sea is reduced, the number of boats going out and the number of people working in the industry will be reduced. The reality is that we will end up with a smaller industry, and that will not be reversed until the Minister obtains some sort of reversal during the review of the doctrine of common resource. That is the root of all the problems in the common fisheries policy, which is one of the most loony ideas ever to fly out of Brussels, and that is saying something. Until he does something about the doctrine of common resource, we will not reverse the situation.

[Richard Benyon]

I think we are coming from the same direction, but I am not sure we are reaching the same conclusion. The hon. Gentleman is just wrong to say that our relationship with other countries was somehow to their advantage and not to ours. There was a collective view across major fishing countries in Europe that the cod recovery plan was not working and the Commission had to understand why. We were absolutely on the same page with major fishing countries that fish in areas such as the North sea and around our coast. Not only did we achieve a good result last week, but in terms of reform of the common fisheries policy, we will continue to work on those relationships, whoever is in government in those countries, to make sure that we have the result that we need for our fishermen.

[Martin Vickers (Cleethorpes) (Con)]

I, too, praise the Minister for his steadfast and robust approach. One of my constituents shrugged his shoulders this morning and told me, “It could have been much worse”, which I can assure the Minister is high praise, coming from them. Many fishermen have virtually eliminated discards through new processes, but that is not reflected in the methodology used in the negotiations. What hope is there for future improvement in that respect?

[Richard Benyon]

I am grateful to my hon. Friend. It is really important that we build on good work, such as the fisheries science partnerships, which involve scientists going out on fishing vessels and fishermen meeting scientists to discuss how to approach this, as information on discards can then be dealt with in an informed way. That helps me in our negotiations with the Commission, so I commend the work being done by fishermen in his constituency on reducing discards and ask him to keep me informed.

[Tony Baldry (Banbury) (Con)]

I know from personal experience that the post of UK Fisheries Minster is a lonely one and I congratulate my hon. Friend on what he has managed to achieve. This ludicrous system whereby decisions are taken year on year on the basis of sleep deprivation simply has to stop. Will he give the House a written statement in the new year on how he sees the reform of the common fisheries policy moving forward? This year two maritime nations—Denmark and Cyprus—will hold the presidency of the Council of the European Union, so surely there is an opportunity to move to regional fisheries management during their year.

[Richard Benyon]

I am grateful to my hon. Friend for his help and advice as I have progressed in this job. It is useful to have Members of the House who know what it is like to go through this charade—I use the word carefully—of a process, which requires decisions to be made after two or three days of heavy negotiations that run right through the night. We must have meaningful reform and it must have regionalisation at its heart. We need to be able to define in the new year exactly what we expect when working with partners in the sea basins around the UK. I pledge to keep the House informed of our progress.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Given the considerable disquiet among British fishermen about the deal, particularly the breaching of the Minister’s own red lines, is the deal not further proof of the catastrophic loss of influence in Europe since the Government parties came to power?

[Richard Benyon]

No, the hon. Gentleman probably was not listening when I said that we have been working extremely closely with our European partners. I think that he would really benefit from seeing just how well we worked and how we joined forces to defeat a proposal that, had it been implemented, would have been utterly devastating for our fishing industry.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I congratulate my hon. Friend on getting a 150% increase in the amount of cod being fished off the south-west. What position did the Hungarians and Austrians take in the matter, given that they have absolutely no coastline? Will he also confirm that there will be no impact on recreational fishermen?

[Richard Benyon]

As my hon. Friend knows, I am a great supporter of recreational angling and want to see many more people fishing in our seas. One of the ways of achieving that is by having more fish in the sea, so that feeds into what we are doing. I can assure him that all my conversations—I think—were with nations that have a maritime interest and that we work well with them.

[Mr David Nuttall (Bury North) (Con)]

We keep hearing about all the benefits of our membership of the European Union. Does my hon. Friend think that UK fishermen agree that the common fisheries policy benefits the UK fishing industry?

[Richard Benyon]

I do not think that anyone loves the precise elements of the common fisheries policy, but fishermen tell me that they understand that proper management of our seas requires a common approach that recognises ecosystems, because fish do not recognise lines on maps. We need policies that reflect the ecology of fish, which sometimes means having to work with other countries.

[Mr Philip Hollobone (Kettering) (Con)]

The tragedy of all this is that Britain should never have given away her fisheries in the first place. Our European neighbours have overfished Britain’s territorial waters and we should be repatriating powers over our fisheries industry. Given that that is not Government policy, I congratulate my hon. Friend on doing his best in difficult circumstances, but will he tell the House whether Britain’s market share of fishing will go up or down as a result of this deal?

[Richard Benyon]

If I may correct my hon. Friend, it is precisely our position to see more regional management of our fisheries, which means that we will be responsible for more of the decisions that are taken at a local level. That seems much more sensible than the current system. I believe that we have created a considerable economic benefit for a number of fishermen around our coast and that we have certainly seen off some very damaging economic decisions that could have come out of it. I hope that, in moving forward to a properly reformed common fisheries policy, I will have his support in trying to get more localised management for our fisheries.

New MEMBER

Monday 19th December 2011 Commons Chamber

The following Member made and subscribed the Affirmation required by law:

Seema Malhotra, for Feltham and Heston.

Points of Order

Monday 19th December 2011 Commons Chamber

17:56

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

On a point of order, Mr Speaker. I have given you prior notice of this point of order, which relates to item 23 of the future business on today’s Order Paper—Public Bodies: Scrutiny of Draft Orders. This was due to be debated in the House last week, but the order, as drafted, was defective and so was pulled. It has enormous implications for the Environment, Food and Rural Affairs Committee in particular, but it also relates to all the orders for the dismantling once and for all of particular public bodies, the vast majority of which relate to the Committee.

If I may, I wish to ask for three things: that the order be debated in an orderly manner in the customary fashion; that, where an order for approval is drafted, it is not to be tabled before the end of the laying period and that additional time be granted to an individual Committee, such as the Environment, Food and Rural Affairs Committee, to allow a minimum of 60 to 90 working days to consider it; and that, if necessary, a debate on such an order is allowed on the Floor of the House. This order is monumental in its nature. These public bodies will cease to exist and the members of the Committee would like to have time to consider it fully.

[Mr Speaker]

I am grateful to the hon. Lady for advance notice of her point of order, and for the point of order itself. Sadly, none of the three requests that she has put to me is a matter for the Chair; all three are matters—her brow is furrowed, but I assure her that I am right on this issue—for discussion perhaps between the Liaison Committee, as the collective representative of Select Committees, on the one hand and Treasury Front Benchers on the other.

I should say to the hon. Lady and to the House, which I am sure will want the issue to be interpreted, that the point at issue is the procedure for Select Committees to deal with proposals made by Ministers under the recently passed Public Bodies Act 2011. I note—she referred to this in passing—that a proposed Standing Order to deal with those draft orders is indeed item 23 in today’s Future Business, section C, and no doubt those on the Treasury Bench, which does not include the Leader of the House or the Deputy Leader of the House at the moment but a number of Whips, who doubtless can convey the relevant information, will have heard her point. I have a feeling that if she does not get satisfaction, she is likely, if precedent is anything by which to judge, to return to the matter.

[Mr Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Speaker. At the end of October I submitted a written question to the Treasury for a named day reply. On the named day, 7 November, the reply from the Treasury Minister was, “I shall let the hon. Member have a reply as soon as possible.” It is 19 December, and I fully appreciate that I asked about a sensitive issue—fiscal integration in the eurozone—and I know how difficult things are in the coalition on the issue of Europe, but 19 December surely indicates that I should have had a reply by now. Will you, Mr Speaker, make urgent inquiries with the Treasury to ensure that I have a reply as quickly as possible?

[Mr Speaker]

I thank the hon. Gentleman for his point of order. This has been the subject of some considerable discontent on both sides of the House over a sustained period. Ministers have heard me say before that conforming to the spirit of what the House expects requires the provision of a timely and substantive response to the question posed. Simply to say just before the deadline or on the day of the deadline, “I will reply to my hon. Friend as soon as possible,” really is not good enough. The hon. Gentleman is a perspicacious Member if ever there was one, and he might wish to provide that example and possibly others to the Procedure Committee—and, perhaps, to write to the right hon. Member for East Yorkshire (Mr Knight), who chairs that august Committee and is looking into those matters—in the hope that he and his colleagues can get satisfaction.

[Mr Denis MacShane (Rotherham) (Lab)]

On a point of order, Mr Speaker. The Front Benchers’ opening statements on the Vickers report earlier this afternoon lasted more than 25 minutes. They were almost Second Reading opening speeches. Statements have become alarmingly long recently. They used to be only seven or eight minutes, and then questions allowed points to be developed. Can we get back to that general rule?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. I share his concern. Ordinarily, a ministerial statement is not expected to exceed and, indeed, is expected not to exceed 10 minutes. I was informed that the nature of that statement had required something slightly longer, and in those circumstances I allowed a little extension of time for the Opposition Front Benchers, but on the right hon. Gentleman’s substantive point I agree, and I hope that we can start 2012 rather better, with crisp statements and crisp responses from Opposition Front Benchers, and then get on to the people with whom I am mainly preoccupied, namely Back Benchers. I hope that that is helpful.

Bill Presented

Local Government Finance Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Eric Pickles, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Danny Alexander, Oliver Letwin, Andrew Stunell, Robert Neill and Mr David Jones, presented a Bill to make provision about non-domestic rating; to make provision about grants to local authorities; to make provision about council tax; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 265) with explanatory notes (Bill 265-EN).

Apprenticeships

Monday 19th December 2011 Commons Chamber

[Mr Speaker]

We come now to the motion relating to apprenticeships, and to move the motion I call the Minister for Further Education and Lifelong Learning—he may even have other elements within his arsenal—Mr John Hayes.

18:05

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I beg to move,

That this House has considered the matter of apprenticeships.

Mr Speaker, the other element is skills—but my skills could never be as great as your own, I hasten to add.

The guitarist Chet Atkins once said:

“A long apprenticeship is the most logical way to success. The only alternative is overnight stardom, but I can’t give you a formula for that.”

Mr Speaker, you and I know, along with others, that long apprenticeships in public service can bear out the first part of that sentiment. On overnight stardom, I say only that the hon. Member for Streatham (Mr Umunna), the new shadow Business Secretary, will no doubt enlighten us on some future occasion.

Mr Speaker, you and I have no wish for this debate to become an exercise in party political tergiversation alone. There is no need for unnecessary contumely, and no need for more criticism of Opposition Members than that which is necessary to, by contrast, highlight the extent of our achievements.

There are many on the Opposition Benchers whose commitment to apprenticeship training is deep and sincere, and I recognise that the previous Government did indeed invest in apprenticeships—certainly towards the end. It is also fair to point out that there was a rise of almost 50,000 in the number of apprentices aged over 25, so, despite some things that we have read recently, the growth in older apprentices is a trend change that has been taking place over a number of years.

Indeed, the previous Government recognised, as you will know Madam Deputy Speaker, in the Leitch report on skills, which they commissioned, that such growth in the skilling of older workers was essential to keep pace with our competitors by upskilling and reskilling the existing work force.

Above all, I know that Members on both sides of the House recognise that apprenticeship training is a sure way to success. The all-party group on further education, skills and lifelong learning recently called for the creation of a “Royal Society of Apprentices” as a means of raising the profile of what many of us believe is our most effective form of vocational training, and I will, I am pleased to tell the House today, take that proposal forward.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister knows and is quite right that all Members are in favour of apprenticeships, but we are in favour of quality apprenticeships. When I was Chair of the Education and Skills Committee, I discovered that too many apprenticeships lasted only one year and very many did not lead to a secure job. There are now 1 million unemployed young people, and some of us believe that 6% of young people going into apprenticeships is not enough. We need new efforts to get more people apprenticeships now.

[Mr Hayes]

The hon. Gentleman has been a long-standing advocate of apprenticeships, and he rightly draws attention to previous Select Committee reports on the subject. He highlighted those reports in the Chamber on more than one occasion when I was present, and he is right in two particular respects: first, it is important that we focus apprenticeships on where they are of most value, and there is more evidence to suggest that they are of most value to young people between the ages of 16 and 24; and, secondly, it is important that we are relentless in our drive for quality. He is right, too, that as we increase the quantity of apprenticeships there will be a tension with quality, but I shall say a great deal more today about the steps that we have taken and the future steps that we propose to take to achieve just that ambition.

Having said that there is a broad measure of agreement, a point echoed by the hon. Gentleman, I should say, first, that the difference between us and the previous Government is that we have made apprenticeships the pivot around which the rest of the skills system turns. Secondly, we have made them fill a bigger space than ever before. Finally, we have put in place an unparalleled level of funding to support our single-minded aim to create more apprenticeships than modern Britain has ever seen. It is important to point out that that growth has not been only in traditional craft apprenticeships, but in the new crafts too—advanced engineering, IT, the creative industries and financial services.

Why, people might ask, do we put such an emphasis on apprenticeships? It is not just that apprenticeships work, although they do, or that an apprenticeship is probably the most widely recognised brand in the skills shop window, although it is; it is also about what apprenticeships symbolise—the passing on of skills from one generation to the next and the proof that that offers that learning by doing is just as demanding and praiseworthy as learning from a book. As William Morris said, all art and craft is

“the expression by man of his joy in labour”.

It is my ambition to dispel once and for all the myth that one can gain accomplishment only through academic prowess. The sense of worth that people gain through the work of their hands—through practical, technical and vocational skill—needs to be recognised, just as we recognise academic achievement.

It is that sense of apprenticeships as the embodiment of a continuum that guarantees their place at the heart of my vision for skills. I hope that, like me, hon. Members on both sides will welcome the provisional figures that show that, in the academic year that has just finished, nearly 443,000 people started an apprenticeship in England.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will my hon. Friend join me in congratulating HTP Training, an Isle of Wight apprenticeship provider, and its managing director Rachael Fidler? Most notable is its successful apprenticeship completion rate of 87%—significantly higher than the national average of 74%. Does my hon. Friend agree that none of that would have been possible without the Government’s help and support?

[Mr Hayes]

That is the kind of testing question and penetrating intervention that I expected during this debate. None the less, it was most welcome, and from a Member who never ceases to represent his constituents in the Isle of Wight with vigour, verve and absolute integrity. His support for apprenticeships has been critical in delivering the 100% increase in Isle of Wight apprenticeship numbers to which he has drawn the House’s attention.

[Mr Sheerman]

Some of us sometimes try to get the Minister to be cross with us because he is always so polite and always strokes the feathers of everyone who asks him a question. However, I have to put it to him again: we all know that apprenticeships are something of a fig leaf for the Government. One million young people are unemployed and the Government keep pointing to what I call the fig leaf of apprenticeships.

Will the Minister stop weaving the myth that they are all three or four-year apprenticeships leading to secure jobs? What is the average length of an apprenticeship today? That is the crucial thing. I think that the Minister is going to have to say that it is about a year. Is that the truth? That is what the public want to know. What quality and length are the apprenticeships of which he is so proud?

[Mr Hayes]

The hon. Gentleman is renowned for his insight, and I had thought until today that he was equally renowned for his patience. I said that I would deal with quality and I assure him that I will also deal with the length of apprenticeships. I think he is right. Although there is no direct, guaranteed link between the length of an apprenticeship and its quality, there is a relationship. It is not a direct correlation, but it is a correlation none the less.

Today I will set out my demands for a minimum length for apprenticeships. That is perfectly reasonable. As I said, it is not a guarantee of quality, but it will certainly offer considerable assurance to the hon. Gentleman and others who, like me, are determined that quality should match quantity. The hon. Gentleman has, over many years, supported my view that technical education is critical not merely because it serves an economic function—because of its utility—but because of what it does for social mobility and social cohesion. Drawing on his patience and insight once again, I ask the hon. Gentleman to wait a few moments. I shall be speaking about the issue at considerable and eloquent length.

The figures that I cited show that numbers were up by more than half in the 2009-10 academic year. I want to make the point firmly that that includes an increase of about 10% in the number of apprentices under 19. I remind hon. Members that that Government achievement has been completed not merely because of our concentrated effort and the funding that we have put in place, although that is critical, but thanks to the work of further education colleges and other training providers, businesses coming forward and creating apprenticeship places, and learners and their families seizing the opportunity with both hands. The real credit lies with the learners, the training organisations and the businesses that allowed that expansion in the apprenticeship programme to take place.

[Richard Harrington (Watford) (Con)]

SQI in Watford offers 10-week apprenticeship courses followed by 10-week placements. They lead to 85% of those taking part being in permanent employment. I do not think that the length of an apprenticeship is everything.

[Mr Hayes]

My hon. Friend has a lot to be pleased about in respect of apprenticeships; as he will know, in his constituency their number has grown by 98%. I did say that I did not think there was an exact correlation between quality and the length of a course, but I think there is a relationship. By setting down a marker about the minimum length of an apprenticeship, we will drive up quality. We will certainly reassure those who are genuinely committed to the apprenticeship programme, but have doubts about the tension between quality and quantity, that we are serious about standards. That matters.

I take my hon. Friend’s point. It may be possible, particularly for older learners with greater prior attainment, to top up skills—perhaps they are moving from a level 2 to a level 3 qualification, or they already have many of the skills necessary to gain their first level 2 qualification. None the less, I still think that length matters.

I should like to put the debate in context, Madam Deputy Speaker; you would expect me to do no less. The Government’s macro-economic policy is built on twin pillars—reducing the deficit and reshaping our economy to make it more sustainable. That second core aim is served by the apprenticeship programme, because it assists in recalibrating work force skills so that productivity rises and competitiveness grows. Britain’s future chance to prosper lies in a high-tech, high-skill economy and to prosper in that way we need a high-tech, high-skill work force.

The recent announcements of reform to the programme concentrated on three areas key to the programme’s continued expansion and success: how to get more employers involved in offering apprenticeships; how to ensure that apprenticeships continue to offer people, especially young people, a firm first step on the ladder that leads to fulfilling careers and further learning; and how we ensure that the money that we spend on apprenticeships has the greatest success.

In the end, apprenticeships are jobs and the programme is demand-led. That means that the growth depends on employers coming forward to make places available. In the current economic climate jobs are in short supply, notably for young people, so the record increase in apprenticeship numbers is remarkable. Hon. Members will join me in commending the 100,000 employers that are using apprenticeships to develop work force skills—helping their businesses, but also providing opportunities for people across this country to grow their skills and improve their prospects.

Our work to recruit more employers to our cause goes on. Only this morning, I was at No. 10 Downing street briefing major employers on what apprenticeships can do for them. They were as committed to spreading opportunity and to social justice as I am.

Our objective is to improve and strengthen the programme even further so that more individuals and employers can access the benefits of high-quality apprenticeships. Overall, employer ownership of vocational skills is the key to our approach. This ambition informs all our priorities in moving forward: first, by reducing bureaucracy to an absolute minimum, speeding up processes and boosting employer engagement; secondly, by safeguarding quality, raising standards, and enhancing the reputation of the apprenticeship brand; and thirdly, by focusing future growth where the returns and benefits are greatest, including growth sectors of the economy, small and medium-sized enterprises, young people and new employees.

SMEs tell us that they still face considerable hurdles in taking on apprentices, and we have taken a serious look at what we can do to help to remove the barriers that they face. This has rightly been raised on the Floor of the House by Members on both sides and in all parties. I can announce today that, first, we will bring reduce to one month the time it takes for an employer to advertise an apprenticeship vacancy, including identifying the provider and completing an agreement on a training package between the employer and the provider; and secondly, we will remove all health and safety requirements that go beyond what health and safety legislation requires. From 1 January, employers that meet the Health and Safety Executive’s requirements as set out in “Health and safety made simple” will be deemed to provide a satisfactory level of compliance. We will also work with the insurance industry to encourage an approach that is proportionate to risks, and with training providers to develop new service standards for supporting SMEs to be included in all contracts for apprenticeships delivered from March 2012.

In addition, we are committed, in a significant new pilot programme, to taking radical steps to give businesses direct access to up to £250 million of public funding for training and apprenticeships over two years. This pilot is a key part of the Government’s growth review. It will route funding directly to businesses, will be more efficient than current arrangements, and will give businesses real purchasing power in the schools marketplace to secure the support that they need.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Will the Minister give way?

[Mr Hayes]

I happily give way to the Chairman of the Business, Innovation and Skills Committee.

[Mr Bailey]

I thank the Minister for his customary courtesy in giving way. I welcome the announcement about provider and employer engagement, and speeding that up, but will he clarify whether there are any restrictions regarding a member of a board of a provider company being precluded from being a member of a board of a user company?

[Mr Hayes]

The answer is that I do not know; in these circumstances, it is always right to be straightforward. Because I know that the hon. Gentleman takes these matters seriously and is committed to getting this right, as I am, I will take his point away and look at it. He is arguing that there might be a conflict of interest in terms of provider and employer, and he is right to say that there should be a proper separation. However, as he will know, it is often the case in large companies that the training wing of the company provides the pedagogy associated with an apprenticeship while the apprentice is engaged in the work-based training in the same company, though in a different part of it. I would qualify his query with that caveat. None the less, I will take another look at the subject and will be more than happy to respond to him directly.

The pilot that I described will involve employers being asked to demonstrate how public funding will be used to leverage private investment and commitment to raising skill levels in their sectors or supply chains. As we grow the apprenticeship scheme, it is very important to take advantage of the value chains associated with our major corporates—their supply chains and their distribution chains, where they exist. Typically, Governments have spent insufficient time considering how that might work in the light of the well-established nature of those relationships and the dependence of large organisations on myriad smaller companies, the fragility of which, by their very nature, is possibly injurious to the interests of those corporates.

For example, major suppliers in the automotive industry tend to have very large numbers of organisations with which they deal commercially in their locality, some of which are vital to the effectiveness of such large organisations. It is vital, in their interests and in ours, that we do more to ensure that those relationships allow us to grow the apprenticeship system within SMEs. It may be of value for large companies to absorb some of the bureaucracy and some of the cost, and certainly to absorb some of the management associated with seeding apprenticeships in their value chain. Bidding for the employer-led pilot will formally be launched in the new year.

Above all else, my advocacy of practical learning and my faith in apprenticeships are driven not by economic imperative—not merely by utility—but by social purpose. I said earlier that for too long the myth that only through academic accomplishment can a sense of worth be achieved has been perpetuated by those who themselves have travelled a gilded path to academia. Now it is time once again to recognise what Ruskin and Morris knew—that all those with practical tastes and talents, with technical vocational aptitudes, deserve their chance of glittering prizes too. This is not just because of the relationship between craft and beauty and, in turn, between beauty and truth, but because for society to cohere we must promote the common good through a shared appreciation of what each of can achieve. All feel valued when each feels valued. Given that inequality is the inevitable consequence for a free economy in a free society, only through social mobility can a communal sense of fairness be achieved. A society that is unequal and rigid is bound to be unable to secure the ties of shared identity, as invisible and yet as strong as the heartstrings of love.

[Mr Sheerman]

The hon. Gentleman and I share a great admiration for the poet John Clare. I am still waiting for a quotation from John Clare, who lived very near his constituency.

May I bring the hon. Gentleman back to the false dichotomy that comes through insidiously in his honeyed words—namely, that there is one group of people going into academia and higher education and a more worthy group going into apprenticeships and more practical learning by doing? This September, 36% of people went into higher education and 6% went into apprenticeships; we want him to talk about the 58% who went in neither direction.

[Madam Deputy Speaker (Dawn Primarolo)]

This is the season of good will, so I am pleading for good will from hon. Members in making short interventions. I remind everybody in the Chamber that this is a very heavily subscribed debate with a time limit on speeches that may, at this rate, have to be shortened for each speaker. In the interests of good will, perhaps we could make sure that all hon. Members get to speak tonight.

[Mr Hayes]

Yes, Madam Deputy Speaker; I must not allow my legendary generosity to prevent Members from contributing to this debate.

To the hon. Member for Huddersfield (Mr Sheerman) I say:

“I loved thee, though I told thee not,

Right earlily and long,

Thou wert my joy in every spot,

My theme in every song.”

That is by the people’s poet, John Clare. I believe that the hon. Gentleman saved John Clare’s home with the involvement of a social enterprise. We share a passion for the people’s poet, as we share a passion for the welfare and interests of the people. It is just a pity that I am in the people’s party and he is not.

With so many people currently not in employment, education or training, we must do more to extend the ladder of opportunity—the point that the hon. Gentleman is making. It is absolutely vital that in getting apprenticeships to fill a bigger space, we not only allow them to redefine our sense of what we understand as higher learning—I shall speak about that, too—but use them as a vehicle to allow for re-engagement of those who are currently unable to contribute in the way that we both want them to by getting a job, keeping a job, and progressing in a job. Through our access to apprenticeships programme, which we piloted as a result of my determination to do exactly what the hon. Gentleman described, I believe that we can provide just such a vehicle to get those who were failed by the system the first time around and who do not have sufficient prior attainment on to a level 2 course.

The drive for greater quantity must be matched by a determination that quality will grow in tandem. First, we will strengthen the English and maths requirements for apprentices who have not yet achieved a level 2 qualification. Those subjects remain essential for long-term employability and progression, so from the 2012-13 academic year all apprenticeship providers will be required to provide opportunities to support apprentices in progressing towards the achievement of level 2, GCSE or functional skills qualifications. They will be measured on their success in so doing.

Secondly, we will launch a rapid employer-led review of apprenticeship standards to identify best practice, ensure that every apprenticeship delivers the professionally recognised qualifications that employers need, and ensure that the Government are maximising the impact of public investment.

[Andrew Griffiths (Burton) (Con)]

Does the Minister share my concern that the new requirement for maths and English to be part of the apprenticeship course might deter some of the NEETs—those who are not in education, employment or training—we are trying to get into apprenticeships from taking part in such schemes? Does he believe that we need additional support to help underachievers who do not have the required attainment in maths and English to achieve it so that they can get on to an apprenticeship scheme?

[Mr Hayes]

My hon. Friend will know that in his constituency of Burton, apprenticeship numbers have risen by 76%. He will know, too, that that rise is due to the excellent work of his local further education college, with which I have had regular dealings.

My hon. Friend is right to argue that it is important that we take account of those who do not have the prior attainment to get on to a level 2 qualification. That is precisely the point that I was making a few moments ago, when I spoke about pre-apprenticeship training. To be clear, I said that those achieving a level 2 qualification must meet the standards in maths and English. There is an absolutely proper argument that we need steps on the ladder before people get to level 2, to allow for the re-engagement of those who are currently not able to get a job.

Thirdly on quality, we will continue to raise quality through consumer empowerment and transparency by improving employer and learner access to objectives and comparable information on providers.

I can also announce today additional steps that I am taking to raise the bar of apprenticeship standards even higher and to root out poor quality where it exists. All apprenticeships should involve a rigorous period of learning and the practice of new skills. If the standards are sufficiently stretching and the expectations of competence high, I believe that a course should naturally extend over at least 12 months. That will be the expectation first for 16 to 18-year-old apprentices from August 2012, as new contracts to training providers are issued. I have asked the National Apprenticeship Service to assess the implications of extending that to apprentices of all ages, taking account of the fact that older apprentices typically have greater prior attainment, as has been said. That will also allow time for our raised expectations on English and maths standards to be achieved. I am mindful of the comments of my hon. Friend the Member for Burton (Andrew Griffiths) in that regard.

Alongside that, I have asked the National Apprenticeship Service to work with the Alliance of Sector Skills Councils to tighten guidance for those who are developing apprenticeship frameworks to ensure that expectations on national standards and rigour are met, and to take action where frameworks are insufficiently stretching. In the current economic times, we must be more vigilant than ever to ensure that funding delivers value and is properly spent. I am mindful of the remarks of the Chairman of the Business, Innovation and Skills Committee. We must crack down when there is evidence that public money is not being spent properly. Action is in hand to review cases where there is concern. Our resolve is to ensure that every penny of public money delivers high-quality apprenticeships and to continue to weed out failure and weakness wherever they are found. I know that the Select Committee is about to launch an inquiry into apprenticeships. I will make the evidence available in my submissions to that inquiry, giving a clear timetable of action and details of the steps we intend to take to root out poor provision.

The Skills Funding Agency will tighten the contracts with colleges and other training providers to allow the immediate withdrawal of funding from provision where quality standards are not met. I am mindful of the comments of the former Chairman of the Children, Schools and Families Committee, the hon. Member for Huddersfield.

Members are aware of the scale of the crisis in public spending that this Government inherited and of the sometimes painful measures that we have had to take to deal with that. The fact that even in these circumstances we have increased spending on apprenticeships is a clear demonstration of our belief in the economic and social value of this form of training, and in the talent and potential of our young people. On 17 November, we set out a clear commitment to focus growth where the returns are greatest, both in terms of age groups and sectors. For example, there is evidence that younger apprentices see the greatest benefits. We will expect the National Apprenticeship Service, employers and providers to focus their efforts on those groups. Accordingly, I am asking the National Apprenticeship Service to target more actively, through marketing and other operational levers, the learner groups, qualifications and sectors where apprenticeships deliver the greatest benefits.

In addition, to widen the effort to create more and better apprenticeship opportunities and to grow the programme among SMEs, from April 2012 we will offer up to 40,000 incentive payments of £1,500 for small employers who take on their first young apprentice. Sufficient funding was already available for next year to support at least 20,000 incentive payments in respect of apprenticeships for young people. An additional fund will be made available to support a further 20,000, meaning that in total there will be 40,000 incentive payments. The payments will be targeted to provide additional apprenticeship opportunities for young people who are ready for employment with small employers that have not been engaged with the programme previously.

I said at the beginning of my remarks that what distinguishes this Government from the previous one is that apprenticeships are at the heart—at the very core—of our approach to skills. We want to build a ladder of opportunity that stretches from re-engagement to the highest skilled levels, with apprenticeships filling a bigger space. We will redefine what we mean by higher learning. In future, our vision of higher learning will extend out from the university classroom or laboratory into the workplace. Because I want a vocational pathway as rigorous, accessible and progressive as the academic route, on 1 December we announced that £18.7 million from the higher apprenticeship fund will support the development of 19,000 new higher apprenticeships in key growth sectors, including construction, renewable energy, advanced engineering, insurance and financial services.

[Sajid Javid (Bromsgrove) (Con)]

I am glad that my hon. Friend is setting out plans to increase higher apprenticeships, because for many young people that is a better route to successful employment than a university degree. For the benefit of the House, will he outline how many higher apprenticeships were created by the previous Government?

[Mr Hayes]

I do not want to be excessively critical of the previous Government. I made that clear at the outset. I said that I would not be more partisan than was necessary to illustrate the extent of our achievement.

In answer to my hon. Friend, let me point out that in 2008-09 there were fewer than 200 higher apprenticeships. With the announcements that have already been made and the relaunch of the higher apprenticeship fund in January for its next phase, I estimate that in this Parliament we will create 25,000 higher apprenticeship places. From 200 places to 25,000 is an extraordinary and remarkable achievement, for which the Prime Minister, the Chancellor, employers, learners and providers can take an immense amount of credit, and for which I can take just a little credit too.

[Toby Perkins (Chesterfield) (Lab)]

I am very keen that the hon. Gentleman should get all the credit that he can. On that note, will he tell the House how many more young people between the ages of 16 and 24 are unemployed after the 18 months in which he has been in his role?

[Mr Hayes]

I wondered whether the hon. Gentleman might ask that question because I know of his genuine and deep-seated concern about these matters, so I had a look at the figures on NEETs over the period from 2000 to date. He will know that from 2004 the number of disengaged young people grew steadily, and that in the third quarter of 2009 it reached 925,000. He will understand that that is a structural problem that requires structural solutions, and that part of the solution is to recast how we train and educate young people and how we create opportunities of the type that I have described, so that we can not only re-engage them but allow them to progress.

The difference between our approach and that of the Labour Government—and, to be fair, previous Governments—is that for a time, apprenticeships may have been seen as a cul-de-sac rather than a highway. By creating the number of higher apprenticeships that I described, I am ensuring that there is a vocational pathway, so that far from being a cul-de-sac, apprenticeships are a route to higher learning that enables people to fulfil their potential. I am confident that our structural changes will help us to deal with a structural problem in a way that the last Government failed to do. I do not say that in an unnecessarily partisan way, but it is pretty surprising that even at a time when the economy was very strong, the number of young people not in education, employment or training remained persistently high and continued to grow.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Perhaps I can help by saying that in 1995-96, the number of young people starting an apprenticeship under the Conservative Government was a little over 20,000. The Tory Government did pump that up in their last few months and reached the amazing number of 65,000, but after 12 or 13 years of the last Labour Government, that number had increased to 280,000. I say that to be helpful to the hon. Member for Bromsgrove (Sajid Javid).

[Mr Hayes]

The hon. Gentleman is a former apprentice and is passionate about the subject, and on that basis I defer to his expertise and personal understanding of the subject. He will be as pleased as I am that apprenticeship numbers in his constituency have grown by 65%. I acknowledged at the outset that apprenticeship numbers grew under the last Government. Indeed, the former Prime Minister declared to the House in 2010 that there were 250,000 apprenticeships. Now there are nearly 440,000. That is the difference between Labour’s record and ours. I know that in the spirit of generosity that typifies all the hon. Gentleman does here, he will want to acknowledge that success when he speaks later.

The development of our new higher apprenticeships in key growth sectors, including construction, renewable energy, advanced engineering, insurance and financial services will allow about 250 employers, including Leyland Trucks, Unilever, TNT, Burberry and so on, to benefit from nationally accredited technical training delivered in the workplace. Higher apprenticeships have the potential to deliver higher-level skills tailored specifically to individual business requirements, and I am encouraged by the research produced at Greenwich university earlier this year showing that about 13% of apprentices progress into higher learning within four years of completing their apprenticeship. As I said a moment ago, we will deliver more than 25,000 higher apprenticeships in this Parliament.

There is much more that I could add to that catalogue of good news. I could wax even more lyrical about the scope and scale of our achievements, but I know that many Members want to speak and I am anxious not to impinge too much on their time. I know that when they speak, like those who have already intervened, they will want to reflect on how much has been achieved over recent months, not just in expanding the apprenticeship programme but in making it more responsive to the needs of employers and the aspirations of learners. Hon. Members will also be aware of how much remains to be done to ensure that we build on excellence, focus on quality, direct funding, link apprenticeships to growth and ensure that not only the macro-economic ambitions that I have set out but our social ambitions are achieved. That is the scale of what we want to achieve. We will be ever vigilant in raising standards and quality, cutting bureaucracy and prioritising areas in which returns and impact are greatest.

At a recent Business, Innovation and Skills questions, I asked all hon. Members who had not done so already to set an example by taking on an apprentice. Today, I ask for their engagement during national apprenticeship week, which starts on 7 February 2012.

To change our national prospects, we must change our view of what matters to each of us and all of us. Apprenticeships are an economic imperative, a social mission, a cultural crusade—such is the scope and scale of our ambitions. We want to reinvigorate practical, technical and vocational skills by reigniting the fire of learning. We want lives lit up by achievement, with a new generation of craftsmen shaping a bigger Britain and building a better future.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before I call the other Front-Bench speaker I inform Members, so that they can get ready, that as we are not making as much progress as we should, I am reducing the time limit for Back-Bench speakers to six minutes in order to get everybody in. I hope that is clear.

18:46

[Mr Gordon Marsden (Blackpool South) (Lab)]

I know that in certain quarters—some of the more world-weary denizens of the 21st century—the Minister, for whom I have much respect and affection, is the subject of mild amusement because of how he manages to cover all times, all places and all poetry, and in particular because of how he invokes mediaeval guilds. I think that is extremely unfair, and I have a confession to make tonight: I, too, am a mediaevalist. In fact, a significant chunk of my education at Stockport grammar school was down to an apprentice made good, Sir Edmund Shaa, who was apprenticed as a goldsmith in 1450 and subsequently founded the school in 1487. His Latin motto was “Vincit qui patitur”, which very loosely translates as “You’ll get there if you stick at it”. Of course, that was what happened in that period for people such as Dick Whittington, who was of course apprenticed as a mercer. This is the time of year for pantomime, Madam Deputy Speaker, so I trust that you will forgive me for mentioning him. It also happened for Scrooge, who was not represented in Dickens’s novel as the Chancellor of the Exchequer but was an apprentice to Fezziwig, who was also a great model.

Apprenticeships were renewed by the trade union movement in this country in the 19th and 20th centuries. It was the skilled working class who took them up. My own father, who was apprenticed just before the second world war to Crossley Brothers, one of the best engineering companies in the north-west, was told by my grandfather that he had a job for life. However, as we well know, we have seen the decline of traditional industries over a long period. In the spirit of Christmas and non-partisanship, which the Minister mentioned, I will not ascribe that to any one particular Government, although Thatcherism comes to mind. We saw the meretricious pursuit of funny money and fluffy activity under the Thatcher Government—not that I would accuse the Minister of being either fluffy or funny. [Hon. Members: “Ooh!”] Funny peculiar, not funny ha-ha.

By the 1990s, as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said, apprenticeships were on their knees, and it was the Labour Government who renewed them, as the Minister was gracious enough to acknowledge. Incidentally, that renewal did not come out of a focus group, and sadly it was not detailed on the great pledge card. It certainly did not come via Twitter, because we did not have the technology in those days. It came from a deep belief and a response to what we were being told in our heartlands about industrial decline, the failings and horrors of the youth training schemes and the low-skill, low-quality training that had taken place under the Conservatives before 1997.

We said that there must be a better way. That was why we revived manufacturing and gave it a sense of structure as we approached the millennium, and why we set up the national apprenticeship scheme and introduced national apprenticeships week. At the end of the day, it was also why it was the Labour Government who supported our successful bid to stage WorldSkills this October in London—I also pay tribute to the Minister and Members from across the House—and what a wonderful showcase for vocational activities in this country that was.

I do not need to remind the House—because the Minister has already generously done it for me—that we commissioned the Leitch report, that seminal report on our skills needs which has informed policy in all parts of the House. What it says about the direction of travel remains just as relevant, even though the economic situation has changed utterly from the period in which it was produced. Leitch ascribed to apprenticeships an important role to play in improving adult skill levels, as the Minister rightly said. That will only become more important as our demographic profile changes. However, we have to resist the temptation to label all in-work training as apprenticeships, thereby stretching the brand to breaking point. We also have to judge training schemes critically in their own right, and in preparation for this situation.

However, at a time of huge rises in youth unemployment and the number of NEETs, it is clear that the immediate challenge is to grasp the nettle and boost the number of apprenticeships available to those aged 16 to 24. The Government’s own head of the apprenticeship service warned only this summer about the chronic lack of places for interested school and college leavers. It is therefore not just a question of supply, or even money—although the Minister has been somewhat over-familiar with the figures, and I intend to return to where some of the money has come from. It is also about demand—demand in the workplace and demand from employers—and, crucially, confidence. Without confidence, the Government can produce as many schemes as they like, but they will face an uphill battle in successfully attracting the numbers. It is this Government’s failure to produce economic arguments or an economic strategy that will generate confidence that has contributed to many of the problems with which the hon. Gentleman has had to grapple.

However, I would like, if I may, to pose a further question for the House—one that goes to the heart of the future for apprenticeships. What are apprenticeships for? Do we see them as a means to expand someone’s existing skills competences, providing a traditional role, or as a means to give rigour to new and developing types of employment, such as in green and low-carbon areas? If so, we need to highlight the importance of adopting a collaborative approach in those areas between employers and training providers in designing frameworks that best fit those new competences. I know from talking to a successful construction business in my area—a company called Amion, which has a good track record in supporting employees from Blackpool to gain higher and further education qualifications as apprentices, both part time and full time—that expansive frameworks might not always be the answer for young people taking an apprenticeship or skills route to qualifications while working in a company. As for older workers, especially in construction or electrical activities, it might make more sense to have shorter, one or two-day bolt-ons to existing qualifications, which again highlights the need for frameworks to be flexible and adapt rapidly to new developments. In a labour market where the average person will be expected to change jobs a number of times in their lives, can a portfolio of skills be offered that will allow the budding apprentice the ability to cope with this new-found flexibility, as he or she progresses?

There is a lively and ongoing debate about the nature of apprenticeships—an issue to which the Government have rapidly been forced to turn because of some of the disquiet in recent months. That was apparent from a meeting in this House organised recently by FE Week, when more than 80 apprenticeship providers came to the Commons to voice their views and concerns about quality and overstretch in apprenticeships, which is something that we have also articulated via our parliamentary questions. As Peter Cobrin, the national education director of the website notgoingtouni.co.uk, argued:

“Is 12 weeks working in a catering establishment and coming up with a certificate—is that an apprenticeship? Or three years working in a engineering company—is that an apprenticeship? We haven’t got a handle around what it is.”

Alastair Thomson from the National Institute of Adult Continuing Education talked about people who are already working for the employer and then being put on the programme. He said, “Sometimes that’s not a bad thing, but if the person who goes through an apprenticeship stays on the same job or does not get any pay rise—is that really a good use of public money? I’d suggest not.”

Those are issues that have been raised strongly, along with others, in connection with Elmfield Training, which made significant profits in delivering the apprenticeships framework. I have also written to David Way of the National Apprenticeship Service to voice my concern about those issues. I therefore welcome the Minister’s announcement today about curtailing apprenticeships that are shorter than a year. I also welcome all the other things he has said in that respect, but this House needs to remember that this comes on the back of a process of concerted pressure, 18 months into this Government’s period of office. I would say gently to the Minister that the devil is in the detail. I appreciate that he wanted to present a lot of the detail today, but when he was going through it so rapidly, talking about the sunny uplift, I was reminded of the old saying: “The faster they counted their honour, the faster we counted the spoons.” We will certainly be counting the spoons and holding the Government to account on these issues.

The Minister’s announcement will do nothing immediately to address the concerns about the quality and progression of apprenticeships for those in the crucial age range between 19 and 24, although the Minister said that he would look at that. After all, their futures are just as important to the economy and jobs as those in the younger range. We will therefore be pressing Ministers to ensure that apprenticeship standards and quality are maintained for all ages.

[Mr Hayes]

I do not want to intervene too frequently on the hon. Gentleman, because a lot of colleagues want to contribute, but he will know that the growth in apprenticeships for 19 to 24-year-olds over these two years—the first year of which his Government might take some credit for, because of the time lag in publishing the figures—has been around 60%. There has been considerable growth in apprenticeships for 19 to 24-year-olds. As for quality, he will also know that it was this Government who introduced both minimum contract values, to take out some of the smaller and less reliable providers, and apprenticeship standards, and that was in the beginning, not in response to any pressure from the Opposition.

[Mr Marsden]

Well, I—

[Nigel Adams (Selby and Ainsty) (Con)]

Agree?

[Mr Marsden]

No, I do not agree. I hear what the Minister has to say, and I accept that he and colleagues have made progress in that area. My point about 19 to 24-year-olds was not that the numbers had gone up, but that it is just as important to look at quality for that group as it is for 16 to 18-year-olds. Let me say rather gently—albeit excluding the Minister from culpability in this respect—that if the Government move in the same glacial fashion as they moved in other areas of quality and due diligence, such as with the regional growth fund, then we will have the opportunity to come back and quiz them further. However, knowing the Minister’s commitment in this area, his perspicacity, his ability to summon up armies of rhetoric—and, indeed, civil servants to do this job—I am sure that that will happen.

Let us create a landscape where we can continue to boost apprenticeship numbers. However, if we are going to do that, it is crucial to get the preparatory work right. That means a strong, solid system of careers advice for young people, to ensure not only that they are aware of the vocational opportunities available to them, but that they are given the skills to take them up. We support the principles behind the establishment of the all-age careers service, on which the Minister, while in opposition, and I, as a Back Bencher, agreed some time ago, as members of the all-party skills group. But the Ministers’ noble aspirations have been undermined by the chaos and confusion arising from the Department for Education’s arbitrary abolition of Connexions and the removal of a dedicated £200 million of support provision in schools. It is therefore not surprising that the president of the Institute of Career Guidance, Steve Higginbotham, went so far as to say:

“In reality, the National Careers Service is an illusion, and not a very imaginatively branded one either, and is a clear misrepresentation with regard to careers services for young people.”

A recent survey carried out by the Association of Colleges showed that only 7% of school pupils could name apprenticeships as a potential post-GCSE qualification. That illustrates the problem that still exists in some schools, in which the vocational route is not explained to pupils. Teachers and others need to have a much greater understanding of the role that apprenticeships can play in careers development and future job prospects. I fear, however, that the situation will not improve following the abolition of Connexions.

New initiatives such as the programme announced this week by the chief executive of the CBI to send mentors into schools to promote apprenticeships are to be welcomed. That announcement shows a welcome recognition that everyone needs to play their part, not just teachers. We must also ensure, however, that young people can afford to stay in education. Following the abolition of the education maintenance allowance, college enrolment data from the Association of Colleges show that numbers are down across the board. That has real implications, as many young people will miss out on the opportunity to gain the crucial pre-apprenticeship skills that they will need to take up a placement. If apprenticeships are to play an integral role, we must ensure that they are fit for purpose, and that they can match the expectations of the individuals who take up the placements with those of the employers who take those individuals on.

We need apprenticeship frameworks that allow progression for the individual; they must not just be there for their own sake. I know that the Minister shares that view, as it featured heavily in his “Skills for Sustainable Growth” document last year. Now, however, we need movement to match the aspiration. We need clear portability from apprenticeship frameworks, with qualifications that are pyramidal in shape, rather than horizontal. We need a process of continuous assessment and credit accumulation that builds up a broad competence, rather than just bite-sized chunks of training that do not add up to anything.

It is equally important, whatever the qualification route, that we do not force employers or apprentices into a false dichotomy between functional skills and skills for life. Enabling skills are important for gaining and keeping an apprenticeship, and subsequently a job, as well as a knowledge of specific skills. Both aspects need to be taken into account as we balance our skills needs in the years ahead.

We need clear, accessible pathways from higher-level apprenticeships into higher education. I want to point out that the choices relating to vocational and academic education should not be viewed as an either/or proposition. Perhaps the Minister should ask his colleague, the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), to get UCAS to consider recognising apprenticeship qualifications as part of its tariff-points system. For too long, complacency about the status quo and some minor snobbery in a minority of universities have hampered not only access but the interchange between the academic and vocational worlds. I welcome what the Government have said about the higher apprenticeship fund and the way in which it will be taken forward, but the key question is how those qualifications will be recognised and integrated into higher education progression.

How will this culture shift of which the Minister is so proud be delivered? The national apprenticeships service, which we set up when we were in government, is clearly set to lead from the front, but will it have the resources to deliver the expansion that the Government are talking about? Recent parliamentary questions have shown that the organisation has lost just under 100 staff in the course of the past year, at the very time that it is being asked to lead the delivery of more and more apprenticeships and to oversee the additional initiatives that the Government are pushing out, including those announced today. My own inquiries have shown that regional directors are now finding themselves further stretched by having to cover multiple areas of the country as well as delivering all the new initiatives that the Government are launching.

The Skills Funding Agency is responsible for all post-19 provision, but, crucially, the Department for Education still controls 16-to-18 provision and is arguably not showing the same commitment to apprenticeships and vocational education as Ministers in the Department for Business, Innovation and Skills have done. The problem with all this, and with the Minister’s dual role in the two Departments, is that it is sometimes hard to see who is leading whom.

We might also ask about the situation on the ground. Following the abolition of the regional development agencies, the Government have completely failed to link local and regional growth into their skills policies. That obviously includes apprenticeships. They have swept away the informal architecture that used to bring together the key players who were crucial to delivering apprenticeships locally, including further education, higher education and small and medium-sized enterprises.

I welcome what the Minister said today about the supply chain, but he merely echoed what we have been saying for more than a year. Why did a year have to be wasted before he came to the House to say these things? Why did we have to wait a year for the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark) to talk about the Government setting up a set of apprenticeship hubs in a number of city areas? The reason is that both Ministers were fettered by other Ministers, by the Chicago-based economists and by the people who think that they can deliver everything on the ground without any Government intervention, whom the Minister has on other occasions derided. Yes, it is good that the Government are looking at apprenticeship hubs, but who on the ground is going to deliver, arbitrate and energise demand? What about those outside the city regions? Are the second-tier towns, the seaside towns and the suburban and rural areas not entitled to an apprenticeship hub locally? We need those structures on the ground so that business demand can be recognised locally rather than being micro-managed from Whitehall, as happens now.

The situation is not helped by the cluttered environment that has developed in post-16 provision, with the creation of university technical colleges and the potential for free colleges and 16-to-19 academies alongside existing FE colleges. We can all see the results when apprenticeship schemes are run well; we have only to look at the demand for schemes run by BAE Systems, Jaguar Land Rover and Network Rail. I have also seen for myself the excellent work being done by British Gas to encourage more female apprentices, and the work done by the nuclear skills academy. All those schemes demonstrate the value of investing in training and skills for the long term—a point emphasised eloquently by my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, in his recent Bloomberg speech.

This brings us back to the age-old question: what is a good job? How do we match the fluid skills demands of the labour market with the life chances and skill sets of individuals? To boost apprenticeships, we will have to meet the challenge of winning over employers who are still sceptical about the some of the values that apprenticeships could bring. A recent British Chambers of Commerce skills survey showed that many employers were still not ready to engage with the programme. Only 20% of businesses surveyed across the board took on apprentices in 2010-11, with the figure set to drop to 15% in the coming year. The Federation of Small Businesses has rightly highlighted issues of complexity and red tape, which act as a deterrent to its members. So I welcome what the Minister has said today, although we shall have to wait to see the small print and to see how rapidly the proposals are put into practice.

I raised the problems of SME engagement in a debate in June, when I said that the Government needed urgently to consider tailoring apprenticeships better towards their needs. That means not just having financial incentives, which Ministers and others sometimes seem to think are enough, but structuring them to the daily cycle and the needs of SMEs’ work. We need to improve the levels of engagement between large companies and middle-ranked companies—identified only last week as key by the CBI director, Mr Cridland. They can play a vital role in boosting apprenticeships via supply chains.

Undeniable pride and dignity surround apprenticeships. That is why so many hon. Members have been able to recruit support for individual initiatives in their area. It has been the same in my area, and this summer I met apprenticeship award winners at Blackpool and the Fylde college in my constituency. My local paper, the Blackpool Gazette ran a successful campaign to create 100 apprenticeships in 100 days. In these sorts of processes, however, making connections and having middle men can be key. I learned that by talking to my FE college and to apprentices and the SMEs with whom they had bonded.

The Government have re-announced today—this is about the third time—the £250 million scheme to allow employers to bid directly for the training budget, but they need to be careful that the human resources element is not lost in hastily thought-out schemes that do not have safeguards and risk deadweight while funding for learning providers and colleges, which are already voicing their concerns, is top-sliced.

This October WorldSkills hit London, and team UK won 12 medals. I was delighted when by lobbying the Government I was able to play a small part as chair of the all-party skills group in tandem with others in the group in helping to bring that event to the UK. Young people with apprenticeships shone out, including Rachel Cooke from Blackpool and the Fylde, a BAE employer in my area. I agree with what the Minister said about the value of that. Labour Members have agreed with it for many years. Although I did not regret the changes made in the 1990s to the Labour party’s constitution in respect of clause IV, I did regret the removal of the words, to achieve

“for the workers by hand or by brain the full fruits of their industry”

because that embodied and continues to embody an important part of our tradition and our aspiration. I believe it is crucial that apprenticeships should have and deserve to have this respect—not least because some of the organisations that promote them, such as City and Guilds, which has been with us since 1878, have become a byword for attaining qualifications, rather like Hoover has become a byword for vacuum cleaners. Apprenticeships now span both traditional types of occupation such as stone masonry and thatching offered by the National Trust and the new schemes in the green industry and everything that goes with them. Harsh words have been said about some elements of the service sector in connection with some of the shorter-term apprenticeships, but we have to recognise that the sector will be key in delivering future economic prosperity.

We need to build a bridge of values between the old and new apprenticeships. We need a 21st century offer that combines an appreciation of the traditional strength of apprenticeships with what they can offer for young people, for retraining and for returning to work, particularly for the women of today. All the structural changes and genuine enthusiasm for apprenticeships will be for nothing if we appear to have promised too much from apprenticeships as a one-stop shop for all training and skills and as the silver bullet to solve all this Government’s skills and employment problems. They will be for nothing if we allow the brand to be contaminated by questionable providers or overstretched by branding all forms of training as apprenticeships. They will be for nothing, too, if we do not provide frameworks that offer the flexibility and progression opportunities for a 21st century economy—ones that are able to adjust to changing domestic and international demands.

The Minister did not find time this evening to talk about one issue that looms on the horizon—further education loans, which anyone aged 24 and above, but not the traditional 25-plus division, will be able to take up. Apprenticeships will be a large part of that number; perhaps as many as 100,000 people will be obliged to take up these loans after Government support is wound down. The time scale for the Government to make detailed decisions after consultation is very short, and this is already causing major problems with colleges across the sector, while business groups have raised the concern that the additional bureaucracy in administering these loans could disengage them from the process. A big bang approach to student loans in further education, including for thousands of apprenticeships, is one thing in a time of plenty, but in a time of scarcity, it is quite different.

When we were in office, we revitalised and re-energised the apprenticeship programme. We put in place procedures to ensure that Government contracts such as Building Schools for the Future would take on apprenticeships, and we saw completion rates rise dramatically to their current rate of over 70%. While the Government have sensibly built on much of that inheritance, there are new challenges that they have not yet understood or that have been hampered by silos, divisions in government and a reluctance to understand how Government can shape and enable markets, which includes skills and apprenticeships. Despite all the press statements and all the re-announcements and the conferences, the adult training budget has been significantly cut. The previous Government had put more than £700 million into funding Train to Gain, but that money has not been allocated to apprenticeships. In effect, the Government have not increased the overall budget for training apprenticeships.

Any Government—whether it be this Government or the next Labour Government—will need to build on a strong legacy from the past by working tirelessly to help expand access to the apprenticeship programme, by engaging with SMEs and helping them to overcome the barriers they face and by making apprenticeships offer a clear route of progression, as I have described. We also need to use the enormous power of Government, which includes creating thousands of new apprenticeship opportunities by incentivising companies to bid for Government contracts over a million-pound threshold to offer apprenticeship schemes.

[Jane Ellison (Battersea) (Con)]

On that very point, I hope the shadow Minister will join me in congratulating the Mayor of London, who has indeed incentivised major contractors bidding for public projects by insisting that apprenticeships are part of the mix in their bid?

[Mr Marsden]

Given that I have talked about Scrooge and “A Christmas Carol”, let me say that Dickens would have described the Mayor of London as a phenomenon—possibly an infant one, I do not know. What I would say about the Mayor is that his trajectory in following this Government’s policies in a series of areas is rather interesting, but, secondly, I would say that we are delighted to welcome him to our big tent, as this is precisely what we have argued for a long time.

The Government have discarded the guidance we put in place to encourage this development, so what we want to know is whether the Minister will listen to the broad range of groups supporting this change. Will he go back to those churlish officials who keep putting problems in his way, and will he support the private Member’s Bill proposed by my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) when it returns to the House next month? These are crucial issues. While he is at it, will the Minister discourage rather more churlish people such as the Minister for Housing and Local Government for describing apprenticeship requirements linked to public contracts as “ridiculous” and “counter-productive”?

The Government have had to face problems connected with further education loans, queries about ESOL—English for speakers of other languages—funding, active benefit restrictions and so forth. All that tells me is that we need to revisit the elephant in the room, which is how we develop a funding system that weighs properly and incentivises the contributions from the state, employers and individuals. That is a matter that Labour Members take very seriously, so we shall be looking at it in great detail in our policy review.

As we move forward, the world of work will no doubt continue to be epitomised by the rapid change we have seen in the last 10 to 15 years; moves towards hi-tech industries and demand for high-quality niche products will still be valid. Apprenticeships will have to adapt to the challenge of providing skills for jobs that do not yet exist. Apprenticeships will have to respond to the growing wish for people to buy experiences as well as products—hence my comments about the service sector—and that will have implications for the manufacturing-service balance. Our apprenticeship structure must be robust enough to support that evolution. Apprenticeships will also have a key role in the

“partnership between productive business and active government”

to which the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), referred recently.

Opposition Members, many of whose parents, grandparents and other antecedents were apprentices, fully intend to play their part in that process. We will continue to support the Government while they build on our achievements in a sensible fashion, but we will also continue to question them about the devil in the detail—always along the lines of “progression, progression, progression”. We shall be glad to have made a contribution to their learning curve.

19:20

[Stephen McPartland (Stevenage) (Con)]

It is a pleasure to follow the Minister and the shadow Minister, and I am grateful to you, Madam Deputy Speaker, for calling me so early in the debate.

It is great news that the number of apprentices in Stevenage has risen by 73% over the last year, from 380 to 650. Those numbers are important, because they relate not just to training schemes but to apprenticeships that will lead to real jobs. I know that the Minister, like me, attended the WorldSkills event, in which 13 of our young people won medals. That showed that they were hungry for learning and achievement. We need to reduce the gap between skills and education to make it easier for employers to take on such young people. I supported the clause in the Bill that became the Education Act 2011 that increased the requirement to level 2—the equivalent of a GCSE A to C grade in maths and English—because it enables our young people to acquire the numeracy and literacy that will help them to gain real jobs at the end of their apprenticeships.

There has been some discussion about the quality of apprenticeships. My constituency contains a couple of manufacturing firms: MBDA, which builds complex weapons systems, and Astrium, which builds 25% of the world’s telecommunications satellites. Their boards are run by people who were apprentices 20 or 25 years ago, and they offer massive apprenticeship opportunities. MBDA recently won an award for being one of the best apprenticeship organisations in the country. The companies take on students aged 16 or 18, give them real jobs, and support their development and acquisition of skills. They even pay for their degrees so that they can make progress. I wonder whether the Minister would be prepared to meet representatives of one of those companies to discuss level 5 apprenticeships.

[Mr Hayes]

I should be delighted to do so.

[Stephen McPartland]

I thank the Minister.

My constituency also contains a couple of accountancy firms that are taking on 18-year-olds and training them to become accountants. They are not providing old-fashioned apprenticeships—jobs to keep young people going for six to 12 months—but are investing in their careers. Stevenage is in Hertfordshire, and is close to London. It takes 25 minutes to travel to King’s Cross on a fast train in the mornings, although it takes much longer in the evenings. The companies want young people because they become committed to them and stay for 20 or 25 years. They become partners in the accountancy firms, and become board members of the large multinational companies.

The Minister came to Stevenage and kindly opened the first welding skills college. It is the result of a fusion between North Hertfordshire college and Weldability Sif, whose inspirational founder is Adrian Hawkins. We are trying to develop a network of such colleges throughout the United Kingdom, which is short of 30,000 welders. The average age of a welder is over 55, and welders in the midlands are now being paid more than £100,000 a year. Welding gives people fantastic career opportunities. [Interruption.] Some of my hon. Friends are suggesting, from sedentary positions, that many of us should have gone into welding when we were younger.

[Mr Iain McKenzie (Inverclyde) (Lab)]

There used to be an abundance of welders on the Clyde, in the area I represent, but there is no longer an abundance of them on the Clyde or, indeed, anywhere else in the country. Is that not because a Conservative Government ripped the heart out of the shipbuilding industry on the Clyde, and caused the loss of many welding apprenticeships?

[Stephen McPartland]

That is an interesting point. As is clear from my accent, I do not have much knowledge of the Clyde, but I believe that more than 1 million manufacturing jobs were lost under the last Government.

The quality of apprenticeships depends on the quality of the colleges that provide the training. North Hertfordshire college has an inspirational leader, Fintan Donohue, who has been working very hard. I am grateful to the Department for Education for providing it with a studio school last week, one of 12 in the United Kingdom, which will focus on science and technology. That brings me back to MBDA and Astrium, whose apprentices specialise in those subjects. The headquarters of the Institution of Engineering Technology are in Stevenage, and it is very involved in the provision of engineering qualifications. We need more young apprentices gaining skills that will make firms want to employ them in real jobs.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend think that there is a role for local government? Shepway district council in my constituency runs a brokerage service enabling businesses with an interest in apprentices to contact the appropriate training providers.

[Stephen McPartland]

I think that there is a role for everyone to take on as many apprentices as possible. Some young people are interested in academic careers, while others prefer to pursue a more hands-on route. My view is simple. I believe that all that young people really want is a job. They want a route map: they want to be told “If you take this path, you will find a job at the end of it.” The Minister has done a huge amount of work in that regard, both in opposition and in his present post. He has kindly given me one “yes” already, but I wonder whether he would be consider fully funding, for two years, the cost of apprenticeship training for people between 19 and 24. At present only 50% of the cost is funded, and full funding could greatly help NEETs—people who are not in education, employment or training.

Let me end with a quotation from the deputy principal of North Hertfordshire college, Signe Sutherland.

“The changes to the single adult budget have been excellent and we have managed to grow apprenticeships by 300% I the last 12 months. This equates to… an increase of apprenticeships in numbers 500 to 2,000 so with perseverance there are jobs are there”.

That is important news. The college is based in Stevenage, but it does a huge amount of work throughout Hertfordshire. I think it is integral to the apprenticeship offer that we focus on the simple fact that what is important is giving young people the skills that they need to obtain jobs.

19:28

[Paul Blomfield (Sheffield Central) (Lab)]

I welcome the Minister’s commitment to a spirit of bipartisanship in the debate, but I hope he will forgive me if I depart from it for a moment. Like my hon. Friend the Member for Inverclyde (Mr McKenzie), I represent a city that was deeply scarred by the last Conservative Government’s assault on manufacturing industry in the 1980s. Thirty years on, we in Sheffield live with the legacy of the policies of that time.

[Andrew Griffiths]

Does the hon. Gentleman agree that it is shocking that manufacturing declined faster under the last Government than it did under the Government of Mrs Thatcher?

[Paul Blomfield]

I invite the hon. Gentleman to come to Sheffield to see the real consequences of Mrs Thatcher’s policy on steel and engineering in our city. Some 30 years on, we in Sheffield still live with the legacy of those policies: a lost generation who never made it into regular work and the social consequences of intergenerational unemployment. In the steel and engineering industries, apprenticeships were the route to highly skilled and well-regarded jobs that provided both a learning experience gained from respected role models in the workplace and experience of the discipline of working and of working as part of a team.

To revert to the spirit of bipartisanship, I am pleased that the Minister recognised the role the last Government played in restoring apprenticeships. As my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) pointed out, apprenticeship starts more than quadrupled between 1996-97 and 2009-10. I am deeply worried, however, that with youth unemployment now at more than 1 million, as in the 1980s, we again face the risk of there being a lost generation.

The Minister is an honourable man who is deeply committed to skills and apprenticeships, and he must therefore share our frustration that behind the Government’s rhetoric is a sorry picture in respect of apprenticeships. There is concern about the age profile of apprenticeships nationally, and that is certainly felt in my constituency. In 2010-11, just 150 people under the age of 19 started an apprenticeship, as against 200 people aged between 19 and 24 and 250 people aged 25 and over. Compared with the previous year, there has been a 27% decline in the number of apprenticeship starts for those under 19, as against an increase of 17% for those aged between 19 and 24 and a 313% increase for those over 25. In June, even the head of the Government’s apprenticeship service, Simon Waugh, had to admit that

“there is still a chronic lack of apprenticeship places for interested school and college leavers”.

Many people were shocked to discover that the growth in new apprenticeships under this Government has come in the 25-plus category. Astonishingly, the number of apprenticeships taken up by those aged over 60 increased tenfold between 2009-10 and 2010-11. What is the reason for that trend? There is concern that since the abolition of many of the training courses delivered under Train to Gain, there has been a rebranding of in-house training as apprenticeships. The Minister must address that issue.

I think the Minister will agree with me about the number of apprenticeships in small businesses. Only 8% of small businesses had taken on an apprentice in the past year according to a Federation of Small Businesses skills report in June. In October, the British Chambers of Commerce found that 53.7% of its members who were surveyed thought an apprenticeship was not relevant to their business or sector. The FSB backs that up in its report, saying that 46% of businesses did not think an apprentice was suitable for their business. That proportion increases to 60% for sole proprietors and 47% for micro-businesses. That perception must be challenged, because apprenticeships can play a valuable role in all sectors both in the workplace and in terms of gaining valuable skills.

I have been working on that issue with the British Chambers of Commerce, and that work has been reflected in early-day motion 2469, which has support on both sides of the House. It states that

“greater priority needs to be given to increasing the number of apprentices across the UK to provide essential career opportunities for young people”.

About 20% of small businesses cited each of the following three factors as major reasons for not taking on an apprentice: training time and general time constraints, costs, and the young people involved having no previous experience. The Government must consider how they might give better support to small businesses by disseminating information better to break down these perceptions and by providing the practical assistance that SMEs need.

[Damian Collins]

I do not wish to plug my district council in Shepway again, but it has developed a service to local businesses who may want to share an apprentice rather than take one on full time, and that service addresses how the council might help with some of the transport costs as well. Good local creative thinking may help to solve some of the problems the hon. Gentleman is setting out.

[Paul Blomfield]

I welcome such initiatives, while also recognising that many local authorities—such as mine in Sheffield, which is facing a 30% cut in funding over a four-year period—will have difficulty finding the money to launch such new initiatives. Assistance of that sort does need to be provided, however, and the Government might try to identify funds to support local authorities in taking initiatives such as that in Shepway.

We can also do more in our constituencies to work with small businesses, and I applaud the efforts of the hon. Member for Harlow (Robert Halfon) and other Members on both sides of the House in setting up the Parliamentary Academy. As employers, we are not dissimilar to SMEs. Our offices operate as micro-businesses, and we are busy, money is tight and we might never have taken on an apprentice before. I was pleased to take on an apprentice even before the Minister invited us to do so. A young woman called Rebecca is working in my office as an apprentice secretary, in partnership with Sheffield college. At the end of the year she will gain a level 2 BTEC in business and administration, by spending one day a week in the college and four days a week in my office, with regular visits from the work-based learning assessor. She will come out of the scheme with skills and experience enabling her to get a job, and she will have assisted the work of my office over this year. There is a lesson in that for all small businesses. I encourage other MPs to take a lead on this issue by employing apprentices.

I hope the Minister will also recognise that there is much more that we can do collectively and that his Government can do to advance the cause of apprenticeships. I hope he will respond in his closing remarks to the comments of the shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), about the powerful role the Government can play in public procurement. It is unfortunate that this Government have backed away from some of the initiatives Labour took when we were in power, and I hope the Minister will recognise the opportunities that exist to use the role of government locally and nationally as consumer in order to bind companies to take on more apprentices.

19:36

[Lorely Burt (Solihull) (LD)]

Apprenticeships are one of the key tools we as a Government have at our disposal both to tackle youth unemployment and to skill our young people to serve the needs of industry both today and in the future, when there will be increasing demand and the country will need to be able to achieve the growth we all desire. I do not intend to ruin the positive ambience we are fostering with the Opposition this evening, but I must say that the last Government concentrated on higher education, sometimes at the expense of apprenticeships. That is not to say that higher education is not important; it is hugely important, but it is not all-important. The last Government did increase the number of apprenticeships, but it was by an average of 13,000 a year over eight years, whereas this coalition Government have raised it by 160,000 over one year alone.

I do not want to talk about the past, however. The past is past and today we face a new series of challenges. I therefore want to talk about what those challenges are, what the coalition Government are doing already, and what else we might do to develop this success story even more.

We do have a good story to tell. Provisional data for the full 2010-11 academic year show that apprentice starts increased by over 50%, to 442,700, with increases at all levels and stages, contrary to the assertions of the hon. Member for Sheffield Central (Paul Blomfield). There has also been a strong increase in completions, to 181,700. That is mirrored in my constituency of Solihull, where the increase is 53%.

We want the figures to rise even further and faster, but to achieve that we must identify the obstacles preventing employers from recruiting more apprentices. Red tape is a culprit, and I would give special prominence to health and safety red tape. Clearly, we cannot put young people at risk, but from this January employers and trainers will no longer have to comply with the additional health and safety requirements imposed by the Skills Funding Agency. Employers will have to comply only with the Health and Safety Executive’s requirements as set out in “Health and safety made simple”—if that is not a contradiction in terms.

Small businesses are obviously a key area that we need to target, as several hon. Members have said. The Federation of Small Businesses reports that only 8% of businesses surveyed had taken on apprentices last year but 28% said that they would do so if there were a wage subsidy. The FSB very much welcomes the incentive payment recently announced and says that

“initiatives like this will help the smallest of firms to take on young people.”

[Mr Robin Walker (Worcester) (Con)]

Would the hon. Lady recommend the initiative taken by Worcester city council? A small subsidy can, in some cases, make a big difference, so it is providing £500 to small businesses that take on their first apprentice.

[Lorely Burt]

I would definitely commend the hon. Gentleman’s local city council.

I also suggest that the payment of £1,500 should be available to as wide a range of businesses as possible. I would welcome greater clarity on how the money will be targeted and what the eligibility criteria will be. I would be grateful if the Minister elaborated on that in his remarks, particularly given that the FSB wishes to take advantage of this as quickly as possible. For small businesses that may not have the time and wherewithal to organise courses for their apprentices, the FSB would like the use of apprenticeship training agencies and group training associations to be expanded. The ATAs would employ the apprentice and lift the administrative burden for the small business, while GTAs enable employers to come together to offer the right training to meet their needs.

Other barriers that the Government should be addressing are outlined by the United Kingdom Electronics Alliance. It talks about schools and universities

“releasing students onto the jobs market without key life skills such as communication, practical problem solving, work ethic and an understanding of manufacturing and the role it plays in the economy.”

We are back to the “oily rag syndrome” of ignorance, where many young people have little idea of what manufacturing really is; a key area that we need to address is how to give kids an understanding of what exciting futures are out there, and these futures involve ingenuity, creativity, imaginative design, great job satisfaction and good money. We have to link schools up with companies while kids are at a formative stage, to open their eyes to the possibilities of what is out there and crying out for their skills and aptitudes. When these young people have a realistic idea of what the world of work is like, they will focus on the skills that the UKEA talks about.

The coalition Government are also doing some good things for higher apprenticeships. The higher apprenticeship fund will support the development of up to 25,000 new higher apprenticeships at levels 4 and 5, which compares with a figure of just 200 in 2008-09. The shadow Minister talks about achieving by hand or by brain, but surely the pinnacle of achievement in manufacturing comes about by hand and by brain.

The UKEA also suggested that a tax credit would “de-risk” the decision for companies willing to set up apprenticeship schemes and that we could introduce the idea of leaving money on the table if a company does not invest—this is a push-pull strategy. I would be interested to hear the Minister’s views about using tax credits in that way. I could say more, Madam Deputy Speaker, but other colleagues wish to speak. Of course we need to do more, but we have made a pretty reasonable start.

19:43

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

In opening the debate, the Minister said that he has put apprenticeships at the heart of this Government’s policy, and I welcome that. Nobody would in any way decry the commitment to and passion for this issue. However, when someone makes such a bold assertion, they have to produce statistics to demonstrate that the Government are succeeding, and that is at the heart of the Government’s problem on this issue. The statistics may demonstrate a big increase in the number of apprenticeships, but if we drill down and look at what is behind the statistics, we find that it does not necessarily indicate a commensurate increase in skills or value for money. Comments have already been made about the huge increase in the number of post-24 apprenticeships and some of the poor-quality provision for 16 to 18-year-olds. I commend the Minister for his comments about trying to improve the quality of provision, but they are a tacit admission by the Government that their policies so far are not actually delivering what they are intended to deliver.

Talk about apprenticeships is good rhetoric, as it chimes with the Government’s assertion that we need to rebalance the economy, and it provides a justification for pointing out an alternative educational route for those denied access to higher education—that denial is what the Government’s higher education policies are likely to produce. Clearly what is available is not actually going to deliver the agenda that individuals need and the economy needs.

I must pose a rhetorical question: what actually comprises an apprenticeship? We can debate the definition, but this contains certain key elements. It must be a work-based course to improve skills and employability, and it should be undertaken over a sufficient period to be meaningful. At the end of the course, the apprentice should qualify for a position superior to the one that he or she had when they started the apprenticeship, either in the same company or another. The level of employment post-apprenticeship should be a measurement of the success of the apprenticeship. Most importantly, the individual who has undertaken the apprenticeship must believe that they have enhanced their skills as a result. Unfortunately, the evidence so far is that a great number who have taken the current apprenticeships do not feel that way and have not had opportunities open to them as a result.

I have evidence to suggest that young people recruited for 12-week apprenticeships have ended up doing only five weeks, with a significant element of that time taken up with stuffing envelopes. The Government have paid for that as an apprenticeship course, which poses serious questions about the value for money that we are getting, the experience that we are offering to young people and the damage to the apprenticeship brand that could arise from it.

[John Glen (Salisbury) (Con)]

I have been listening carefully to the hon. Gentleman’s remarks. He seemed to suggest that the previous Government’s university access policy was delivering something superior and he seems to be denigrating the status of apprenticeships. Is not half the problem that people talk down apprenticeships, which denigrates their status—that status is very important in encouraging people to take up apprenticeships in place of going to university—and delivers an outcome that is no better?

[Mr Bailey]

I am glad the hon. Gentleman made that intervention, because it allows me to point out that under the previous Labour Government there was a huge increase in the number of people going to university, including a fourfold increase in the number going from my constituency, and there was also a fourfold increase in the number taking apprenticeships. By and large, we find that those apprenticeships were far superior to the those being classified as “apprenticeships” under this Government. As has been said on a number of occasions, the huge number of apprenticeships for over-24s is just a rebranding of the Train to Gain programme. They would not have been included in the previous Government’s statistics on apprenticeships, so to compare one with the other is not to compare like with like. I believe that in the retail sector more than 70% of those who get an apprenticeship level 2 qualification are in existing employment, so does that really meet the test of improved professional qualifications and employability? I doubt it.

[Mr Hayes]

The hon. Gentleman is the Chairman of the Select Committee and I know that he would not want to present a parody of what is happening. We are determined to deliver quality, but I cannot imagine that he is saying that apprenticeships should not be a vehicle for retraining and upskilling and improving the prospects for existing workers. If he was saying that, it would be an extraordinary claim.

[Mr Bailey]

I was not going to make that claim. In fact, the Minister raises an important point. I would not in any way decry the upskilling of existing workers, and Train to Gain was very successful in doing that, but whether we want to call it “apprenticeships” is debateable. Perhaps we do, perhaps we do not, but statistics cannot be traded with the previous Government’s apprenticeship statistics when such people were not included in them. That is my essential point. I am not decrying in any way the benefits of in-work training, but there is a genuine issue with measuring the enhanced employability of people who have undergone that training and the amount of money invested in it.

Let me consider the Government’s approach to the education maintenance allowance. One reason for scrapping it was the alleged deadweight cost of the fact that many young people would have taken courses irrespective of whether that allowance had been paid. The same sort of detailed scrutiny must take place of some of the post-24 training to ensure that we are not spending a vast sum of money—there is a lot of money involved—on providing people with training that they would have had anyway. A secondary issue is the fact that if we can retain the level of skills enhancement we have already and refocus some of the money that would be spent on it on other areas, we might well be able to enhance other apprenticeship provision in other areas, which is equally important.

I could go on for a very long time about this—[Interruption.] But not today. My Committee will carry out a detailed inquiry, but I conclude by saying that we should get away from the rhetoric of apprenticeships and talk about general skills. There are a range of skill packages for different groups of different ages and different skill levels and we must ensure that they are supported rather than talk all the time about apprenticeships—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

19:52

[Nigel Adams (Selby and Ainsty) (Con)]

It is a pleasure to follow the hon. Member for West Bromwich West (Mr Bailey), and I shall try to keep the rhetoric to a minimum if I can. It is also a pleasure to speak in the debate.

Apprenticeships are the most ancient form of vocational training. In this country, they predate degrees and their formal existence dates from the middle ages. In places such as China, apprenticeships have been around for 1,000 years. Hon. Members will all be aware that Confucius explained why apprenticeships worked by saying, “I hear and I forget, I see and I remember, I do and I understand”.

Last Friday evening, I had the good fortune to be invited to Selby abbey to present the annual Selby college awards. As the Minister will know, Selby college is an outstanding further education college in my constituency and I was thrilled to present awards to several apprentices who had excelled in their fields and who are now looking forward to embarking on their careers. The college plans rapidly to expand its apprenticeship scheme numbers in the forthcoming year, with ambitious plans to increase the programme by 300% by working closely with local and regional employers to help to train people with the skills they will need to join the working world. As well as making that commendable progress, the college is in touch with university partners to expand the range of degree programmes that students can take there.

Today, thousands of young people are benefiting from the excellent start to their working life that an apprenticeship can offer, but apprenticeships are open not only to the young. Hon. and right hon. Members might have seen reports in the media about current apprentices in their 60s and 70s, and a recent forecast published by the Government shows a large increase in the number of adult apprenticeships over the course of this Parliament. That offers hope for all of us who might be thrown out of this place in the future.

With Christmas spirit and a sense of fair play, I acknowledge that there is agreement on both sides of the House that apprenticeship training must be central to any Government’s approach to skills. I will go further and acknowledge that one of the achievements of the previous Administration was to bring about a significant expansion of the number of apprentices in training. I am delighted, however, that the coalition Government have taken apprenticeships to a new level, as cemented in the coalition agreement, which stated that the Government

“will seek ways to support the creation of apprenticeships, internships, work pairings, and college and workplace training places as part of our wider programme to get Britain working.”

This Conservative-led Government have more than fulfilled that promise and continue to do so with an extra 53,000 apprenticeship starts recorded during 2010-11.

We have seen a 54% increase in apprenticeship starts in 2010-11 compared with the figures for 2009-10, under the previous Government. Those figures could not be clearer. This has been a record year for apprenticeships, with the greatest proportional growth at level 3, the equivalent of A-level. The task now must surely be for the Government to continue to increase the number and range of apprenticeships on offer while, most importantly, improving their quality. I support the Government’s announcements on improving the quality of apprenticeships, particularly now that English and maths up to the standard of a good GCSE—level 2—will be available for all apprentices.

Madam Deputy Speaker, there is a great song—I am sorry, Mr Deputy Speaker. I had not realised that you had taken Madam Deputy Speaker’s place. There is a great song by an artist I have had the good fortune to have seen live, called Seasick Steve, which goes, “I started out with nothing and still have most of it left”. If we are to avoid that rather gloomy outcome, we must continue to improve the quality of apprenticeships.

In my constituency, Doosan Power Systems, a company that works in the energy sector, has had a successful apprenticeship programme in place for more than 40 years and employs 92 apprentices across the years between 16 and 18, with hopes of bringing in a further 62 next year. In Selby and Ainsty, we have seen an increase in apprenticeship numbers of 67% over the past year, from 510 to 850, and I hope that that figure continues to increase, with companies such as Doosan taking on more and more apprentices with the help and support of the Government.

[James Wharton (Stockton South) (Con)]

May I take this opportunity to observe that in the north-east we have seen a rise from 535 to 860 engineering apprenticeships in the past year? Is it not the case that the sort of apprenticeships my hon. Friend is talking about and which the Minister is doing so much to deliver will provide the jobs and growth for the future that we so desperately need in our region?

[Nigel Adams]

My hon. Friend is absolutely correct. It is important that we have quality apprenticeships to ensure that they lead to proper jobs. I commend my hon. Friend; I am sure his input has gone a long way towards insuring that increase in apprenticeship numbers over the past year.

Further support can be offered through an increase in the funding support for apprentice work placements to cover non-productive employer costs such as travel, accommodation and supervision. I have spoken to employers in my constituency and found that another area where it is widely felt that greater Government support is necessary—I put this to the Minister—is in the current 50% reduction in funding for apprentices over the age of 18, an issue raised earlier by my hon. Friend the Member for Stevenage (Stephen McPartland). Many firms and establishments do not allow workers under the age of 18 to enter their sites owing to the perceived high-risk nature of the work, which in turn limits the age of apprentices that companies will take on. If the age were raised to 19 before the drop in funding, it would encourage more employers to take on younger apprentices without the risk of not being able to utilise their skills fully on site.

An advanced economy needs people with advanced skills in order to grow, and we need to use all our talents. I am assured that this Government are committed to driving up the skill levels of the work force. Apprenticeships already make a tremendous contribution to society, but this Government intend and need to go further. The Government should ensure that apprenticeships are improved and expanded so that more individuals and businesses can benefit from the opportunities that they offer.

20:00

[Nic Dakin (Scunthorpe) (Lab)]

As we have heard, there is substantial consensus across the House that apprenticeships are a good thing. Both the previous Government and the present Government have supported and invested in the growth in apprenticeship numbers. Both the current Skills Minister and the shadow Skills Minister have excellent track records championing apprenticeships inside and outside Government. Many MPs are, like myself, employing apprentices, a practical, positive way of showing commitment to the apprenticeship route into employment.

Across the country there are excellent examples of first-class delivery of apprenticeship programmes. Two examples from my own constituency demonstrate how flexible the apprenticeship model is for apprentices and for businesses. North Lindsey college provides a wide range of excellent apprenticeship opportunities in partnership with a range of local companies. Humberside Engineering Training Association—HETA—whose general manager, Eric Collis, gave compelling evidence to the Education Committee, provides a range of high-quality apprenticeships in partnership with companies such as Tata Steel. It is a tribute to the quality of Tata Steel apprenticeships that they are heavily oversubscribed year on year. It is a tribute to Tata’s commitment to the development of its future work force that it is committed to maintaining its apprenticeship numbers even while it navigates the choppy waters that the steel industry currently faces worldwide.

So the apprenticeship brand is a strong one. Labour breathed fresh life into apprenticeships after they had been somewhat neglected. The number of apprenticeships rose from 65,000 in 1996-97 to 279,000 in 2009-10. The dedicated National Apprenticeship Service was set up to promote and expand apprenticeships. To their credit, the Government have built on this. However, most people think of apprenticeships as long courses focused on practical skills for young people.

Apprenticeships are now being supplied for a much wider range of skills and ages than previously, and vary in length. This is not necessarily a bad thing, but care needs to be taken with the branding, and vigilance should be maintained to ensure that apprenticeships are always used appropriately. We have heard some exchanges about that in the debate today. Vigilance needs to be maintained so that apprenticeships remain rigorous and of quality.

Most of the growth in apprenticeship numbers since the election has been in the 25-plus age group, and much of this has been achieved by the re-badging of Train to Gain numbers, so we need to be careful. With the rise in youth unemployment to record levels, it is important that renewed effort is put into building the number of apprenticeships for those under 25.

[Mr Hayes]

The hon. Gentleman is right to say that most of the growth has been in that area and he is right to attribute that to the changing shape of apprenticeships. We are using them as the principal vehicle to upskill and reskill the existing work force, as well as the traditional route into employment through the acquisition of practical competences, but I know that he will want to acknowledge that the two-year change in young apprenticeships for people aged under 19 is around 28% or 29%, and that the biggest proportionate growth is at level 3, rather belying the argument that this is all about low level skills for older people.

[Nic Dakin]

I thank the Minister for his intervention. He is right to say that where there is success it needs to be celebrated. That must be built on. He is also right to recognise the diversity of the apprenticeship model, but everybody in the House is right to emphasise the importance of rigour and quality as we move forward. There is agreement across the House on these issues, but when qualifications change, it is a tricky time and must be managed carefully. I am sure that with his track record, the Minister will be doing his level best to ensure that that is the case.

We do not wish to see another lost generation. That is the risk because of the economic challenges that the country faces. One way of addressing the issue would be to boost under-25 apprenticeships by smart public procurement. We have heard that discussed this afternoon. But there are other ways of addressing the challenge. In his opening speech the Minister drew attention to certain barriers to the supply of apprenticeships, which he hopes to release to allow a greater supply.

The Federation of Master Builders notes that there has been a sharp decline in construction apprenticeships as a result of the economic challenges confronting the construction industry. It states in its report:

“Apprenticeships are so successful because they are employer led and the qualifications on offer are designed to equip the learner with the skills required by the industry. Employers are at the very heart of apprenticeships and so, in order to really make a difference, politicians must continue to make the businesses’ case for hiring an apprentice. This includes the continuation, or even expansion, of the apprenticeship incentive payment.”

As the shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), said, a discussion is needed about how to balance the costs and the incentives between the student, the employer and the state as we move forward.

Finally, I shall touch on information, advice and guidance, which is tricky at present. I know the Minister is concerned about that. Research by the Edge Foundation showed that most people know a lot more about academic qualifications than they do about apprenticeships. The emphasis in the school curriculum on the English baccalaureate risks distorting choices and aspirations. Young people must be given better information about apprenticeships in order to make informed decisions. This should include opportunities to meet current apprentices and visit colleges, training providers and employers, starting before they make subject choices at 14.

Better information is needed about the paths that apprentices can take once they have finished their apprenticeships. It is not well known that apprentices can progress to higher education, or that many are promoted to supervisory and management positions soon after completing their training. Edge’s 2009 survey of teachers revealed that more than half—56%—of the secondary school teachers surveyed rated their knowledge of apprenticeships as poor. We need to take action on information, advice and guidance. We need to be rigorous about quality as we move forward, and we need to look at the package of incentives available to stimulate the further progression of apprenticeships.

20:07

[Chris Kelly (Dudley South) (Con)]

I should start by declaring an interest as a non-executive director of my family’s business, which has a long-established apprenticeship scheme.

Apprenticeships are a shining success in the first year and a half of the coalition Government. The figures paint a hugely pleasing picture, with the number of new apprenticeship starts in my constituency of Dudley South sharply up, as in most other parts of the country. In 2009-10 the number of new apprenticeship starts in Dudley South was 550, and in 2010-11 that number has grown to 910. That is a two thirds increase compared to 2009-10 and, more importantly, 360 more young people have been given access to the life-changing opportunities that an apprenticeship and skills for life provide.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime, so I would like to use this opportunity to thank all the employers in my constituency who have taken on apprentices, and especially those who have taken on apprentices for the first time recently. As the son of an apprentice, I make a commitment that any business in Dudley South employing apprentices that makes contact with me wanting a visit from their local Member of Parliament will get one, as I think it is absolutely right to celebrate the best in business.

I would like to make a special mention of the National Apprenticeship Service website, apprenticeships.org.uk. It has been re-developed and is now easier to use for both employers and apprenticeship candidates, so I congratulate the Minister on his Department’s effective use of communications technology. It is good to see the roll of honour there, giving deserved recognition to those businesses that are playing their part in training and developing our future work force.

Things are certainly heading in the right direction. In the academic year 2010-11, 442,700 people started apprenticeships—as the Minister has mentioned, a 58% increase on the number who started in the previous year. Much of this increase is due to more people aged 25 and over starting apprenticeships. The majority of people starting apprenticeships chose frameworks in the service sectors, such as business administration and retail, and a majority of apprenticeship starters were, for the first time ever, female. So apprenticeships are not just for school leavers, and are not just for the traditional industries, such as metal bashing, for which the black country is famous, but also for the service sector. This is particularly relevant to the Dudley borough, where Stourbridge college’s hospitality and retail academy is sponsored by Westfield, owners and operators of the Merry Hill shopping centre in Brierley Hill in my constituency.

The early figures are encouraging, but my right hon. and hon. Friends on the Front Bench are not complacent, and that is why the Government have introduced incentives to support up to 40,000 young apprentices in 2012-13. The Government will offer an incentive payment of up to £1,500 to small businesses, the final payment of which, quite rightly, will not be made until the apprenticeship has been completed and the apprentice has progressed to sustainable employment.

I recognise that money is tight at the moment, but will the Minister see what more he might be able to do on this incentive payment? For every £250 increment in the payment, there will be a huge increase in the number of employers willing to take on an additional or new apprentice. Further, will the Minister ask his Department to undertake some research, if it has not already done so, on the effects on take-up of increasing that payment offer to £1,750 or £2,000?

The British Chambers of Commerce published a recent report on apprenticeships that found that time, cost and inexperience were barriers to taking on apprentices. It also found that a fifth of firms with fewer than 10 employees, and also a fifth of those with between 10 and 50 employees, recruited an apprentice from 2010-11. That rose to over a third of companies with 100 to 249 employees, and to over a half of all companies with more than 250 employees.

The £1,500 maximum payment will clearly be important in incentivising small and micro businesses to take on apprentices, but the BCC is right also to identify time and inexperience as barriers. That is why I am pleased that the Government have responded by reducing red tape, ensuring that employers are able to advertise a vacancy within one month of deciding to take on an apprentice and have them ready to start work within three months, and removing all excess health and safety requirements for apprenticeships. In the new year, the Government will be enabling businesses to design, develop and purchase the apprenticeship and other training programmes that they need through a £250 million pilot fund.

In 2009, 30% of large employers with over 500 staff offered apprenticeships while only 5% of small businesses with two to four employees did so. This is precisely where we need to see the next increase in take-up coming from. Small and medium-sized enterprises account for almost half of the private sector in the UK, yet just 2% of small businesses employed apprentices in 2009. I generally do not like bandying statistics around, but that truly is a damning one. So this Government’s incentive payment to employers, along with the £250 million pilot fund and proposals to slash red tape, will clearly help to address this past failure. Like Dr Adam Marshall, director of policy at the BCC, I commend the Government for

“offering real help to firms and apprentices alike”.

One of those small business that I have talked to is in my constituency of Dudley South and it recently hosted me for a visit. The business, Generic Punching Systems in Netherton, has been helped by this Government to take on two apprentices. It is a family business with the managing director’s son and daughter working alongside their father in production and accounting roles. The other two employees are new apprentices. I commend GPS for investing in the future by taking on and training up new apprentices. My only concern however is that the managing director told me that he had not found it possible to employ apprentices through the local college system, and that is something that we need to be mindful of. Instead he uses his personal network within the area to identify willing and able candidates to be interviewed for apprenticeships. I commend the Government for their work thus far.

20:13

[Steve Rotheram (Liverpool, Walton) (Lab)]

I welcome tonight’s debate on this very important instrument in tackling unemployment in Britain today, which promotes a highly trained, suitably qualified, sustainable work force. I think that I am one of the few parliamentarians who has been an apprentice. I was a brickie and I learned my trade through an indenture route. Many years later, I became a vocational training instructor. In addition, I have worked for the Learning and Skills Council and its predecessor organisation, and was responsible for delivering construction training in the Merseyside sub-region. Therefore, I have some limited understanding of the issue.

In modern times, many traditional occupational areas are still three-year, and in some cases four-year, apprenticeships, and are still seen as being a detailed introduction to a trade: a valuable period of on and off the job training to industry recognised standards. Apprenticeships should not be 16-week test drives, as some are today. This will result only in damage to the brand.

I must confess that I feel that some right hon. and hon. Members’ interpretation of apprenticeships is slightly different from mine. For me, some employers are still confused about the precise definition of an apprenticeship. I welcome the Minister’s comments tonight about ensuring that quality does not suffer through quantity.

Thanks to the cuts in career services such as Connexions, many youngsters starting out today will be reliant on parents, grandparents and teachers for career support and guidance, and will need to decide whether to say on at school, whether they can afford the tripling of tuition fees and go to university, or whether to try to get an apprenticeship. Very few people, apart perhaps from some Conservative Members, would advise a young person to pack in school at 16 to take part in a six-month apprenticeship. So let us incorporate the question of definition into today’s debate. All training programmes cannot simply be rebadged as apprenticeships or they will lose all credibility. They should at least include the NVQ qualification at levels 2 or 3, the technical certificate and the key skills element.

There are many on the Government Benches who will no doubt advocate their love for and devotion to apprenticeships, but who have no intention of taking on an apprentice themselves, or of encouraging their own children to complete one. In fact, many Members claim that apprenticeships are the be all and end all if you listen to some of them, but despite my minor misgivings at times about the last Labour Government’s emphasis on academic routes over vocational training, the last Tory Government nearly destroyed apprenticeships completely. We were down to about 20,000-odd in the year before their last year in power.

Any increase in apprenticeship numbers, as identified by the Minister earlier, is welcome—

[Derek Twigg (Halton) (Lab)]

Does my hon. Friend agree that the recently announced construction projects that the Government support are an ideal opportunity for the Government to stipulate that they should include a number of apprenticeships? In our part of the world, the council is working hard to ensure that there are apprenticeships on the Mersey gateway. Should not the Government stipulate that any construction project they support should have apprenticeships?

[Steve Rotheram]

I agree with my hon. Friend. We tried to push the Government on that. The old rule of thumb used to be that for every £1 million-worth of procurement an apprentice was taken on. The Minister should seriously look again at that, because it is a way of stimulating demand for apprenticeships.

The point made earlier about 10-week programmes makes a mockery of the brand and looks like statistical gerrymandering to all those responsible for delivering quality apprenticeships. They are not what people out there believe to be apprenticeships; they are training programmes. They are very welcome in the vocational field, but they are not apprenticeships. While the Government take credit for all that they have done and for the current level of apprenticeships, many Members seem to forget that some current apprentices in traditional occupations started their apprenticeships under the Labour Government. For example, my beloved son is an apprentice electrician, which is a four-year programme. Perhaps I am being cynical, but the Government seem to be systematically rebranding work experience programmes as apprenticeships, and I genuinely hope that that is not the case.

The reason for my scepticism probably has something to do with a recent incident in my constituency of Liverpool, Walton. I keep questioning why the Government, who claim to be so dedicated to reducing unemployment and increasing apprenticeship numbers, allowed the National Construction Academy in Aintree to close its doors on their watch. Not only will the decision deny up to 80 young people each year the chance of accessing training via the centre, but Walton is unfortunately home to the sixth highest level of unemployment in the country.

The Minister will know that I have the greatest admiration for his undeniable appreciation of vocational routes into employment, but surely he must understand the relationship between public sector spending and private sector growth. Despite the coalition’s at times relentless desire to drive a wedge between the public and private sectors, the two are heavily interlinked and mutually co-reliant, as can be seen in the construction sector, for instance. As I have said on a number of occasions since becoming a Member of Parliament, the symbiotic relationship between the public and private sectors means that cutting one makes the other bleed. Needless to say, the construction sector is haemorrhaging badly at the moment and needs an urgent transfusion. The construction industry has a long history of taking on apprentices, but such programmes have now been savaged, with capital investment slashed—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

20:21

[Henry Smith (Crawley) (Con)]

It is a privilege to follow the hon. Member for Liverpool, Walton (Steve Rotheram), a former apprentice, and I am grateful for being called to take part in the debate. As my hon. Friend the Minister said in his introductory remarks, apprenticeship places are central to the economic and social good not only of this country and our local communities, but of individuals.

Youth unemployment is of course a significant concern for every right hon. and hon. Member. Looking back at the history of youth unemployment, it is shocking to see that between May 1997 and May 2010 youth unemployment increased by around 42%, and of course that is still very much a challenge as we face the current debt and international economic crisis, but it is even more important that we focus on properly skilling people, particularly the young, through apprenticeship places, and that is rightly a central commitment of the coalition Government.

Much has been said this evening about national policy on apprenticeships, and I would like to talk about how translating that national policy at a local level is making a real difference in my constituency. I am delighted to report that in the past year the number of apprenticeship places in Crawley has risen by 70%, which is 20% above the national average. That is playing an important role, along with other measures introduced by the Government, such as the Work programme, to ensure that young people in particular can find routes into sustainable employment.

I pay tribute to Central Sussex college, particularly its principal, Dr Russell Strutt, for the work it is doing. It is engaging hundreds of local young people and more than 1,600 local businesses with apprenticeship places across the board, whether in construction, health and social care, business administration, warehousing, hair and beauty or other areas of our diverse economy. Unfortunately, unlike what the hon. Member for West Bromwich West (Mr Bailey) described earlier, the proportion of people from Crawley going on to higher education in 2009-10 was just 17%, which is woefully low. I therefore very much welcome what Central Sussex college is doing in working with the University of Brighton to link local young people to the first-class, global employers in my constituency, such as Thales UK, Varian Medical Systems and Boeing UK, but we need to concentrate on more than just a higher education offer.

[Neil Carmichael (Stroud) (Con)]

I should like to celebrate the work of Dr Beri Hare in promoting engineering and manufacturing at Stroud college, because it is a great tribute to the college’s interest in young people and to the effective way in which it has delivered on ensuring first-class training.

[Henry Smith]

Clearly, further education colleges and those who work so tirelessly in them are making a significant difference, whether in Stroud or in other parts of the country.

The further education sector is not the only one playing a significant role, and I pay tribute to some of my local employers, who are also playing an important role in increasing the number of apprenticeships. One, Virgin Atlantic, which is headquartered in my constituency, is offering 38 apprenticeships in the highly skilled industry of aircraft engineering, and, based on the record of apprenticeship places it offers, almost two thirds of its apprentices stay with the company for a long time, helping to grow that sector of the economy and bringing loyalty to such first-class companies.

Another company in my constituency, TradeSkills4U, the largest electrical apprenticeship organisation anywhere in the country, offers 4,000 places not just in Crawley, obviously, but in the wider country. It offers them not just to young people, either, but to many people who are at the midpoint of their careers and looking to retrain—particularly people leaving the armed services and looking to retrain, especially in solar power technology. I was delighted to help open its new premises on the Manor Royal industrial estate in my constituency earlier this year with Falklands veteran Simon Weston.

Eezehaul, a courier and package company in my constituency, offers apprentice places as well, but both employers cite the importance of literacy and numeracy as a bar to people taking up apprenticeships and as a burden on many companies, because they often have to provide the teaching that schools and parents should have provided a few years earlier. That is why I was delighted to hear my hon. Friend the Minister mention focused support for literacy and numeracy so that apprenticeships can grow further. That can help to grow our commercial sector, thus growing our economy and creating a greater number of jobs.

20:28

[Mr Iain McKenzie (Inverclyde) (Lab)]

In the current economic climate for young people, this debate is very welcome. I speak with experience of apprenticeships, having spent the first four years of my working life as an apprentice and having had the good fortune to go on to discover a second career as a modern apprentice. That is why I have been engaging regularly with companies in Inverclyde, trying to encourage them to start thinking about increasing the number of apprenticeships or about starting an apprenticeship scheme.

Inverclyde is not as bad as some constituencies with youth unemployment, but that does not reflect what is happening in Scotland overall, nor in the UK as a whole. Youth unemployment has never been higher, and the statistics are frightening. Youth unemployment has risen to 1.027 million, the highest since records began in 1992, beating the previous record set only a month ago.

The young continue to bear the brunt of the lack of jobs in the UK, and many are thinking about emigration as a way out. Too many young lives are being wasted on the dole queue; long-term unemployed young people are the most vulnerable, with many trapped in a vicious cycle of joblessness, anxiety and depression. We desperately need to get our young people into training and apprenticeships. They need every chance to improve their skills to get them into good jobs.

The other week, I visited a project in my constituency in which young people are applying themselves to the renovation of community facilities and to learning new skills in the traditional trades of electrician, plumber and joiner. Those young people are determined to succeed; they are not sitting back on benefits. They ask only for the opportunity to learn the skills that they hope will get them employed as apprentices.

The Government need to do more to help our young people. They have dropped Labour’s guarantee of an apprenticeship place to young people who want one and they have failed to expand apprenticeship places for school and college leavers. The Government should be doing everything that they can to support opportunities, helping young people to improve their skills and get good jobs. Instead, they are leaving Britain’s youth on the dole queue, instead of taking constructive measures today. We need a highly skilled, highly educated work force to meet the challenges of tomorrow and compete with the advanced nations of the world. We need value added skills to compete with the economies of Brazil, India, China and other emerging nations in the world.

Apprenticeships are a valuable way of giving young people skills and training in jobs. They offer an on-the-job learning opportunity; they enable young people not only to learn about their chosen trade or profession, but to learn it on the spot and talk to colleagues who are already skilled and experienced in their particular area.

Apprenticeships can offer so much, and there is no reason why they should not be expanded to cover a wide variety of jobs and professions. We need to get Britain’s companies on board. The Government are cutting apprenticeships back when they are needed more than ever. It is so short sighted; the Government need to make more apprenticeship places available. Labour has a plan for our young people, even if Government Members do not. Any company wanting to provide goods or services to the public should be required to have an apprenticeship scheme before they can win a contract. My council in Inverclyde already does that, and to great benefit.

Labour’s jobs-for-contracts scheme would increase the number of apprenticeships by thousands and give immediate help to many of the 1 million unemployed under-25s. This simple idea—creating apprenticeship places through public procurement—would provide immediate help to alleviate youth unemployment. The Government spend £220 billion a year on goods and services from the private sector; from construction to business support services, the Government are the top single contractor in the UK. That means that they have a unique tool at their disposal to get young people into work. The Government should reverse their decision to abandon apprenticeships in Government procurement and instead do everything that they can to create new apprenticeships.

When Labour was in government, it rescued apprenticeships, increasing their status and nearly quadrupling the number of places from 75,000 in 1997 to 280,000 in the last year we were in government. Labour plans to repeat the bank bonus tax and use the funds to provide jobs and apprenticeships for young people, as well as for a temporary reversal of the VAT rise, would help kick-start our economy and provide the growth and jobs that we so urgently need.

Public money should always be used to maximise social and economic benefit. In 2009, the Labour Government drew up the Office of Government Commerce guidance, “Promoting skills through public procurement”. This Government have scrapped that, denying high-level apprenticeships in key industries for young people. Labour’s plans on apprenticeships would work for young people and get them into work. Getting our young people into apprenticeships is the best way to put Inverclyde, Scotland and the UK on the right course for the future.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To accommodate more Members, the time limit on speeches is being reduced to five minutes.

20:34

[Stuart Andrew (Pudsey) (Con)]

It is a pleasure to take part in this very important debate.

Being unemployed is a terrifying experience that I went through a number of years ago. For me, that new year’s eve was not about looking forward to welcoming in the next year and everything that was hoped for, but about receiving my P45 and thinking what the prospect of unemployment would hold for me. During the time I was unemployed, I began to realise what work was really about. It is about more than earning money. Of course, that is a vital part of going to work, but it is also about self-worth, the reason for getting up in the morning to go and achieve things, and social interaction with the colleagues with whom one works. When I was unemployed, I found myself without any of those things. Money was scarce, and I had to make the choices between whether to put money aside for gas or for electricity—did I want to be warm or did I want to watch television? Those stark choices were very difficult. There was not much to do, either. I like to be busy and active and to have a purpose, and I dearly missed that daily contact with colleagues.

Of course, in this Chamber we all want to make party political points. I sometimes find it hard to listen to Labour Members talk about the youth unemployment statistics. One would think that this was a new phenomenon that had existed only during the past year. The fact is that it has been a growing problem for a good number of years, and we need to do everything we can to deal with it. It is simply not acceptable to see so many people out of work. It is not good for them, it is not good for the economy, and it is certainly not good for our society. The evidence is that this problem is not unique to the United Kingdom; we need only look at other countries such as Spain to see how difficult it is.

So how do we deal with the problem? There are many ways. For years, our education system has concentrated too much on those who go into academia. What about the rest? I never went to university—it might show, of course—but I was fortunate enough to find a job early on. I always had a sense that I had failed somehow because I had not gone to university. My brothers were in exactly the same position. They found themselves with young families and low incomes, and going out to retrain had a huge personal and financial cost for them, but they did it and I am very proud of them for that. Apprenticeships are a way of tackling youth unemployment. We often hear the older generation talk with real pride about the apprenticeships of the past helping people to learn new skills and develop a trade. One of the hurdles that we will have to cross is the immense snobbery that remains about people who decide to go into apprenticeships. We should be proud of those who make that choice.

The Government should be congratulated on getting off to a fantastic start. I have noticed that every Member has referred to the figures in their constituency, so I will carry on the tradition. I am proud that in Pudsey 460 people took part in apprenticeships in 2009-10, and that figure has gone up to 770 in 2010-11—a growth of 67%. That is hugely impressive, but it has not happened by accident. Despite dire public finances and tough public spending decisions, the Government have increased investment in this area, and that must be welcomed as a crucial policy that demonstrates a real desire to tackle the problem. Some of the schemes may be basic, but many people out there do not have the basic skills they need for a job, and it is important that we give them the opportunity to acquire them.

One of the companies in my constituency, Airedale International, is very successful, but its customers’ increasing demand for state-of-the-art products means that it needs highly skilled employees, and the managing director said to me during a recent visit that they are simply not available. The company has had to invest £250,000 in a new training and apprenticeship skills centre so that it can get the people that it needs to do the job.

I urge the Government to continue with this excellent policy to help young people and to continue to talk to industry to ensure that we have the skills that it needs so that ultimately we can create a competitive, skilled economy and hope for those whose futures might otherwise be bleak.

20:39

[Jim Shannon (Strangford) (DUP)]

It is a privilege to stand here and speak about this issue.

Apprenticeships are very important in my constituency and across the whole of Northern Ireland. I want to look at two aspects—the position today in Northern Ireland and the help that we need from Government. When I think of Northern Ireland, I am always happy to highlight the good that we have, particularly in the education system. I believe that it has one of the finest education systems in the United Kingdom. The figures show that it produces superior GCSE and A-level grades and higher literacy and numeracy figures than the OECD average. We have enterprising people who want to work and businesses that want to expand, but they are restricted. There is no doubt that there are good prospects; the issue is turning them into reality for the people of the United Kingdom and of Northern Ireland. That reality is getting harder to achieve by the day when we are on the edge of a recession, looking into an uncertain future.

I accept that the Minister is totally committed to his strategy. However, when we are staring at the problem of 1 million-plus unemployed young people, where is the strategy to address that? What interaction has the Minister had with the devolved Administrations, particularly that in Northern Ireland? Is there a joint strategy that we can use to our mutual advantage?

Every day in my constituency, I see young people and indeed older people who need help with benefits issues. They tell me that they are desperate to get a job. I always feel inadequate because I am not able to point them towards a job opportunity, which should be just around the corner. I wish I could do that, but it is most definitely impossible.

My office took on an apprentice two years ago so that he could learn how the office worked alongside the other seven staff. It was a practical and physical way of learning. We worked with the college in our area to give that young boy the opportunity to develop his skills, experience and commitment. Work is also a reason to get up in the morning. It gets people into a pattern of discipline, which is good to have.

Tradesmen are one of the casualties in this area. Members have mentioned the construction industry. In the construction industry, like in many businesses, when it comes to job losses, the mantra is, “Last in, first out.” Unfortunately, that usually means that apprentices are the first out of the door, perhaps in the middle of a two or three-year apprenticeship. We have to address that issue.

Only 10% of companies in the UK employ apprentices, compared with about 25% in Germany and Austria. One developer who did very well during the building boom has now got to the stage where he does not take a bonus when a house is sold, but keeps it for his men and for the next house that the business builds. That means that he cannot take on apprentices. I believe that it is time for the Government to consider this issue.

Last week in this Chamber, we had a debate about unemployment. In an intervention, I suggested that businesses should be given an incentive to employ people aged between 16 and 24. The CBI has suggested that there should be a £1,500 grant and that the person’s national insurance contributions should be paid. That is a constructive suggestion that could enable people to employ apprentices when they could not otherwise do so. A small incentive from the Government could be just what is needed to make that happen.

I want to speak highly of the companies in my constituency of Strangford that already employ apprentices, such as Bombardier Shorts and John Huddleston Engineering. Those companies employ apprentices every year and they would employ more if the opportunity was there. Perhaps we need to consider that. There are not sufficient skills available to our indigenous companies to attract investment. We need apprenticeships in skilled labour, office admin, marketing, computer skills and many other areas. There are many issues that we need to address. I believe that Northern Ireland can be part of a UK strategy to give opportunities to young people.

I applaud the Government for tabling the motion, but it is not enough. We need a strategy and then its implementation to give hope and opportunity to young people.

20:43

[Caroline Dinenage (Gosport) (Con)]

I am grateful for the opportunity to contribute to this incredibly important debate. I have learned an enormous amount from just sitting and listening to the contributions. It is a huge tribute to the Government’s commitment to apprenticeships that in just 12 months we have witnessed an incredible increase of more than 50% in the number of apprenticeships across the country. As the Minister said, however, it is not just about the increase in numbers but about the quality and standard of apprenticeships. The greatest growth has been achieved in level 3 apprenticeships, which means that more young people than ever are gaining the equivalent of A-levels in their chosen field. That is very important in my constituency, which has a proud maritime and naval heritage and a great tradition of engineering skills.

It is always heartbreaking to see young people who, when the academic door is closed on them at quite an early age, are uninspired by the work choices available to them. At best they have unskilled work, and at worst a life not in education, employment or training. I would like to think that the apprenticeships that are on offer could raise their aspirations.

Such apprenticeships are right on our doorstep, because key employers such as EDF and Network Rail are helping to reinvigorate the national skills base through a major apprenticeship training centre run by Babcock at HMS Sultan in my constituency. At any one time, up to 400 young adults are carrying out apprenticeships there for vital engineering and technology jobs. The dedication and passion of the apprentices are immense, as they know that they are gaining high-level skills for significant and tangible job opportunities. Such apprenticeship programmes open up opportunities for all.

Remarkably, last year women made up the majority of apprenticeship starters for the first time. The story of one female apprentice, Alannah at HMS Sultan, is one example that illustrates what has happened. After just a few months at the centre she was described as an exceptional apprentice with a highly promising career ahead of her. With her apprenticeship at Southern Water offering experience in a broad range of engineering roles, it is clear why she finds her training so rewarding.

We must not pretend that the Government have achieved all they can for potential apprentices, including female apprentices. Alannah admits that she still experiences some prejudice in the male-dominated world of engineering, and more vitally recalls that she received no support or advice whatever at school about pursuing that route. The reality that her case illustrates is that many schools are simply not doing enough to promote apprenticeships. We must ensure that they are recognised and endorsed as a viable and exciting opportunity for young people. What better way of doing that than to get young apprentices into schools to talk about their experiences? Alannah says that she has been going to speak to kids in schools, and I ask the Minister whether more apprentices could be encouraged into schools. They are the best advert for what they are achieving.

The training offered at HMS Sultan totally belies the traditional and limited image that many young people and their teachers have of apprenticeships. Contrary to what Opposition Members have said today, apprentices there serve between 12 and 24 months of their three years’ training on site at HMS Collingwood, where they gain skills, tangible job opportunities and the joy of living away from home without the burden of university debts.

To build further on the successes of the past year, we must ensure that our schools and young people do not hold the damaging misconception that apprenticeships are second best. The breadth and diversity of the opportunities at HMS Sultan could put some university courses to shame, with the apprentices taking on fully functioning professional roles early on in their training.

There is also evidence throughout my constituency of how apprenticeships can build the resources of a community. At the new maritime skills centre, there are plans for an extensive apprenticeship programme, with talks currently ongoing with a company about the provision of apprentices for offshore wind farms. The potential for the students to gain high-level employment, and for employers to guarantee that their workers have the skills that they need, is immense. That is a real boost to the local economy.

Last year, Gosport saw more than 1,600 people start apprenticeships. I sincerely hope that that figure will grow and grow in the coming months and years, to the benefit of students, employers and the community. I also hope to encounter more girls like Alannah who are doing science, technology, engineering and maths-based apprenticeships throughout my constituency and getting the most from their fantastic opportunities.

20:48

[Andrew Griffiths (Burton) (Con)]

I begin by directing colleagues to my entry in the Register of Members’ Financial Interests, and by congratulating Members of all parties on the quality of this evening’s debate. I read in a national newspaper over the weekend that MPs had all given themselves an extra holiday, and that we were skiving off and the Chamber was going to be deserted this evening. For that reason, I had written an hour-and-a-half speech, but I have been able to trim it somewhat. I intend not to take my full time, so that I can allow other colleagues to contribute to this important debate. I would particularly like to pay tribute to my hon. Friend the Member for Pudsey (Stuart Andrew), who made a thoughtful, articulate and caring speech about youth unemployment. As a northern, working-class lad who did not go to university, I am proud to be part of that club.

Mr Deputy Speaker, as a regular visitor to Burton, and to east Staffordshire, you will know that it is a thriving constituency. I am proud to say that I win the prize so far this evening, because I have had the biggest percentage increase in apprenticeships in my constituency, at a whopping 76%. The number of apprenticeships in my constituency has increased from 540 to 960. That represents young people being given the skills and the training they need to get back into work, and I am proud of what this coalition Government are achieving.

I was touched that the Minister, who is sadly no longer in his place—[Interruption.] I am told he is having his dinner. An army marches on its stomach—and the Minister can march a long way. He kindly mentioned Burton and South Derbyshire college, which is a fantastic provider of apprenticeships, training and education to young people in my constituency. We are desperate for the Minister to visit us so that he can see the good work that we are doing. The principal, Dawn Ward, is desperate to embrace the Minister and all that he wants to achieve in educating our young people. I hope that his office is taking note of that and will respond to our letters urging him to visit Burton and South Derbyshire college.

We all recognise that apprenticeships are a fantastic brand and that people understand what they do. They do what it says on the tin: they give young people experience of the workplace, and education and training to help them to develop their careers. I am concerned and nervous about some of the examples that we have heard from both sides of the Chamber this evening of short courses that do not really seem to stick to the ethos or the hard work done to develop the apprenticeships brand. I would urge the Minister to look into that. However, I am heartened by his assertion that apprenticeships should last 12 months.

I want to make a plea. Demand is outstripping supply. We all know of young people in our constituencies who want to get back into work or into an apprenticeship, but who cannot do so because not enough apprenticeships are available. I would urge the Minister and the Front-Bench team to consider extending the helpful £1,500 that is currently available to small and medium-sized businesses to larger businesses. It is true that larger businesses are more geared up to take apprentices, but if we want to get young people back into work, surely we should give them that opportunity in some of our biggest and finest companies across the globe.

Finally, I would like to make a plea on behalf of manufacturing, as a boy who grew up working for the family engineering business. Engineering and manufacturing are very important for our economy, with 12% of economic output and 54% of UK exports in manufacturing. We are often told that we cannot manufacture things because our production and work force costs are too high. However, Germany’s labour costs are 63% higher than the UK’s. We have the skills and the work force; we just have to train our young people to get involved in engineering and manufacturing, and sell our great British products across the globe.

20:53

[Neil Parish (Tiverton and Honiton) (Con)]

I am glad to follow my hon. Friend the Member for Burton (Andrew Griffiths), who rightly pointed out that although we are all supposed to be on holiday, attendance among hon. Members has been very good this evening because we realise how important this issue is. I thank the Minister very much for his earlier statement about apprenticeships and the fact that we are nearly doubling them. I shall give some figures from my constituency, although I cannot quite beat the percentage increase that my hon. Friend has seen in Burton. We had 580 apprenticeships last year, which is going up this year to 780—nearly 800—so we are going in completely the right direction.

I want to make a plea to the Minister. It is good that larger businesses are taking on apprentices, but some 50% of the private sector economy comprises small companies and micro-businesses, and they take on only about 2% of the apprentices throughout the country. It is important that we get that figure up. We must ensure that apprenticeship schemes are worth while, but we must also ensure that they are not so burdensome or beset by red tape and bureaucracy that small companies will not use them. Small companies and micro-businesses are personal concerns that someone has built up, and if a young person can work every day with the person running the company, that will be important not only for building the business but for building up a relationship that could lead to the business taking on an extra employee. It would therefore help tremendously if more small businesses could be persuaded to take on apprentices.

[Justin Tomlinson (North Swindon) (Con)]

One of the biggest challenges that micro-businesses face is that of accessing information on providing an apprenticeship. In previous debates, I have called on the Minister to provide such information in the annual business rates mail-out, setting out just how easy it is to offer those opportunities, which are good for the business and good for the apprentice.

[Neil Parish]

My hon. Friend makes a good point. Individuals in small and micro-businesses usually work very hard and do not have much time to look through such information, and they certainly do not have anyone else to deal with that side of the administration. I am sure that the Minister will take that point on board, to ensure that such businesses have greater access to apprenticeship schemes.

In my constituency of Tiverton and Honiton, both those towns contain many little manufacturing and engineering businesses that are taking on apprentices, as do Axminster, Seaton and Cullompton. I was an unofficial apprentice; I was milking cows at 13. My father—God rest his soul—did not believe in paying anybody, and certainly not his own son. Seriously, though, agriculture nowadays has changed. Anyone who drives tractors will know that they light up like a Christmas tree. They are full of computers, and probably cost between £50,000 and £60,000. People need really good skills to be able to drive them. Similarly, the machinery used in engineering businesses is all computerised. Apprentices need greater skills now than ever before, and this is linked to education and to colleges. Petroc college in Tiverton, for example, is creating more and more links to apprenticeships. That needs to be done; colleges need to link into businesses in that way. Constituencies such as mine have a lot of agriculture and a lot of tourism. They also contain many eating establishments and other businesses that can build in apprenticeships to provide real skills and meaningful jobs.

I want to echo the comment from other Members. Bringing young people and older people—especially those who are not used to working—into apprenticeships and retraining can give them valuable experience of work. That is where small companies and micro-businesses can be useful, because one-to-one interaction between the employer and the apprentice will give the apprentice the confidence to carry on and build a career. It is a matter of giving people confidence and the ability to work.

My final point is on the youth schemes designed to help young people. There are 40,000 places on those schemes, and I hope that we will be able to find a bit more money, even in these difficult times, to fund a few more places. I think we all agree that we want to see all our young people in jobs. It is rather rich of the Labour party to knock what we are doing when we have doubled the number of apprenticeship schemes, and are now adding the youth schemes to help young people. We saw a rise in youth unemployment during Labour’s time in office. The Labour Government created a huge boom in the economy, only to create a huge bust afterwards. Youth unemployment rose during that time, and we are going to have to fight hard to get those people back into work and to get the apprenticeship schemes running so that we can give young people a great future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Ten Members wish to speak and there are 40 minutes remaining. My maths suggests it is four minutes each. I would be grateful if Members would stick to that limit, which we will put on the clock.

20:59

[Iain Stewart (Milton Keynes South) (Con)]

It would be remiss of me not to add the votes of the Milton Keynes South jury to the league table of improvements in apprenticeship numbers, as we are up 70% over last year—not quite as good as for my hon. Friend the Member for Burton (Andrew Griffiths), but it compares favourably to a 58% national increase and a 44% regional increase. Clearly, good progress has been made in Milton Keynes.

I shall focus my remarks on a discussion I had at a dinner I recently had the great privilege to attend for the principals of further education colleges in the Thames valley. One issue that came out of the discussion was the hesitancy among employers at times to take on apprentices because of concerns about the cost and the bureaucracy involved. The measures outlined by the Minister—particularly the £1,500 incentive payment and the simplification of a lot of the bureaucracy—goes a long way to address those concerns, but more needs to be done.

Another interesting point that came out of the discussion was that Members of Parliament can play a huge role in encouraging employers to take part in these schemes. Individually and collectively, we all have a duty there. The evidence presented at the dinner showed that where MPs took a proactive lead in encouraging employers to take on apprentices, the results were very encouraging.

We have made good progress, but as I said, more needs to be done. I want to follow up the point ably made by my hon. Friend the Member for Pudsey (Stuart Andrew)—that we need to achieve a cultural shift in thinking about apprenticeships. There is still a snobbery about not going to university, so that taking an apprenticeship somehow appears as a lesser option. The problem often starts at school. Not every school is guilty, but too many careers advice services in schools focus on the academic route and not on the vocational route with apprenticeships or other training options. I believe that for the long-term health of the UK economy we need to move away from that and to value apprenticeships and the learning that goes with them.

A company in my constituency, Two Trees Photonics, is a start-up company with only a handful of employees. Its chief technical officer—whose name, Dr Christmas, is very seasonal—started off as an apprentice and gained all his academic qualifications through the apprenticeship route. He is now developing this cutting-edge technology, which is potentially transformational. There are examples like that, and it is the duty of companies, as the hon. Member for Solihull (Lorely Burt) said, to get into schools and open the eyes of young people to choosing that route. I encourage the new National Careers Service and note the statutory duty on schools to provide impartial and independent advice, which should go a long way to help us to develop this strategy.

In the few remaining seconds, I want to refer to University Centre Milton Keynes, which is pioneering innovative ways of delivering new products to meet skills needs in the nascent parts of the economy such as low-carbon and telemedicine. In my last nine seconds, I would like to add to the Minister’s lists of visits, already including to Stevenage and Burton; he should come to Milton Keynes to learn what UCMK and others can do.

21:03

[David Morris (Morecambe and Lunesdale) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in such an important debate.

Apprenticeships have been the bedrock of training in British Industry for generations, and anyone who cares about British Industry must, by extension, care about apprenticeships. I am very proud to say that I left school aged 15 and joined Thatcher’s youth training scheme. The YTS apprenticeship programme was the start of my career, and I believe that I would not be standing here today without it. That is testament to the flexibility in skills and career structure that the hon. Member for Blackpool South (Mr Marsden) seems to seek. However, apprenticeships also benefit companies. According to the British Chambers of Commerce, 82% of companies offering apprenticeships say that they build long-term skills and capacity, as well as offering young people on-the-job training with small salaries to help them get by.

I take the view that the best ideas benefit everyone involved. Apprenticeships create stronger and more profitable companies, offer young people employment, and even regenerate communities by increasing skills and employability, and I am glad to observe that Members in all parts of the House agree on the fundamental premise that they are a good thing. Obviously there are disagreements on the detail, but that is to be expected. I was pleased to hear the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) say that he wanted to see 220 apprenticeship starts a year by 2013. I agree with him wholeheartedly, which is why I was also delighted to see that the Government have delivered more than twice that number this year. That represents real progress, and we should all applaud it. It is the result of a major new package of funding that will enable the budget for apprenticeships to rise by £250 million a year by 2014-2015.

We should bear in mind, however, that Government money and cross-party agreement are not what it takes to deliver apprenticeships, although it helps. The people who are meeting these ambitious targets are the companies and apprentices themselves: it is they who are making it happen. We must applaud their efforts loudly, and then ask ourselves how we can ensure that more companies and young people join in. As a former small business man myself, I fear that not enough small businesses are being encouraged to participate in schemes. Many fear that red tape, health and safety rules and inflexibility will leave them out of pocket. We must ensure that apprentices are seen as a real economic benefit to their companies.

I do not believe that small businesses can afford to risk losing money on apprenticeships in difficult climates such as this, and I think that the Government are right to offer £1,500 payments to companies that take on apprentices. In that way, we are offering security to the companies, and as the number of places expands, we will offer more of them to young people. I know from my time in small business that gestures like that help to reduce risk and enable companies to act.

We should be very proud of the achievements of our young people. We have a record number of apprenticeships, they are gender-balanced for the first time, and the number of apprentices over 25 is increasing. This is an issue on which the whole House agrees, which I think is borne out by the results that we have seen. Our young people are our future, and the business community has done us proud. As a former apprentice who is now a Member of Parliament, I commend what the Government are doing.

21:07

[Jane Ellison (Battersea) (Con)]

It is that time of the evening when we are almost reduced to “name, rank and serial number”. I shall say “Battersea 109%”, and get it out of the way.

I want to make two points in the short time available to me. I have already referred to the picture in London, in an intervention, but I want to say more about that, and also to say something about the gender breakdown in apprenticeships.

I strongly support the Government’s agenda for rebalancing the economy throughout the United Kingdom, but London is going great guns on apprenticeships, which are an incredibly important part of the UK’s economy. The number of apprenticeships in London increased by 99% between 2009-10 and 2010-11, which reflects the Mayor’s enthusiastic championing of them, and he has set the ambitious target of 100,000 apprenticeship starts by the end of 2012.

Members on both sides of the debate have talked about the way in which public procurement projects can be used. There is no doubt that the Mayor has used big public projects such as Crossrail and Thameslink to drive forward the apprenticeship agenda in London. I know that the Skills Minister has had conversations with the Mayor’s officials on the subject, and I shall be interested to hear his and other Ministers’ responses. I know that they are considering the matter. Given the large number of exciting public projects that were given the green light in the Chancellor’s autumn statement, this seems an appropriate time for them to comment.

I welcome what has been said about the gender rebalancing of the overall number of apprenticeships, but if we dig down into the 12 key sectors which represent about 60% of apprenticeship starts in 2009-10, we see that, as well as the problem of snobbery that some of my hon. Friends have mentioned, there is a problem of gender stereotyping.

[Mr Marsden]

Will the hon. Lady give way?

[Jane Ellison]

I will not, but only for the sake of others who wish to speak. I do not wish to be discourteous.

To take a couple of extreme examples, in children’s care, learning and development, the breakdown is 4% men and 96% women, while in plumbing it is 98% men and 2% women. I chose plumbing as an example because in London plumbers can make a fortune at present, and I want women to have the opportunity to be in the high-wage jobs. I chose children’s care, learning and development because we in this House regularly debate the need for more male role models in children’s early years. That sort of gender imbalance in that important area of employment is clearly not right, just as it is also not right that we have a similar gender imbalance in primary school teaching.

While celebrating the overall gender balance across apprenticeship starts, we must use every opportunity—through the new National Careers Service, through visits to schools and firms, and through talking to young people—to encourage young people to look at the widest possible range of professions. It was very heartening to hear my hon. Friend the Member for Gosport (Caroline Dinenage) talk about the young apprentice she described. There are not enough similar examples. As we approach 2012, we must challenge the obvious stereotypes that still exist, and the apprenticeship programme provides us with a chance to challenge and tackle them.

21:11

[Graham Evans (Weaver Vale) (Con)]

I am very pleased to have a chance to speak in this debate, which is very timely given the recent focus on youth unemployment. Like my hon. Friends the Members for Pudsey (Stuart Andrew) and for Burton (Andrew Griffiths), I left school with few qualifications. I did not go to university, and I spent a wee while as an unemployed person. That is why I believe that apprenticeships are so important. They are a vital weapon in combating youth unemployment. We have all seen that the youth unemployment figures have risen to over 1 million for the first time. Opposition Members have, in their own charming way, tried to make out that the coalition Government somehow invented youth unemployment and that this problem appeared from nowhere on 11 May 2010. As ever, they display impressive amnesia about their own 13 years in office.

The truth is that youth unemployment sky-rocketed by 40% under Labour. That massive increase took place entirely after 2004. That fact must be greatly puzzling to many Opposition Members. For the largest part of that period, the UK enjoyed strong economic growth, so a lack of jobs cannot explain it; the “evil Tories” were not in office, so they cannot be blamed; and we all know that it could not possibly be the Labour party’s fault. So what could possibly have gone wrong?

The root causes of the unprecedented increase in youth unemployment are many and complex, and if we are to address the problem, we must consider them all carefully and take smart, targeted measures. It will not do just to repeat the vague mantra that “we need to invest in young people”. Many Opposition Members are fond of doing that, but although it might make them feel better, it does not achieve anything.

It is no coincidence that the dramatic increase in youth unemployment began in the same year that the European Union was enlarged to include eastern Europe. This was the biggest ever expansion in the history of the EU and, despite numerous warnings at the time, the Labour Government decided against having transitional immigration controls. The consequences have been significant. After all, how can a 16-year-old with a blank CV and no training compete in the jobs market alongside 30-something migrants with lengthy work experience? Why would employers take on the risk, costs and effort to train school leavers who have no way of demonstrating they are reliable, ahead of older migrants who are already trained and have a CV demonstrating a strong work ethic? That question illustrates why apprenticeships are absolutely essential in tackling youth employment.

I congratulate my hon. Friend the Minister for Further Education, Skills and Lifelong Learning on the passion and expertise he has brought to the job. The record number of people starting and completing apprenticeships is testament to his hard work. It makes me proud to support this Government, and I applaud the work they are doing on apprenticeships. I am delighted that the Government are going further, by making it even easier for businesses to take on apprentices by slashing red tape, creating cash incentives for small firms to take on apprentices for the first time, and giving businesses direct access to huge levels of public investment. Those are all very welcome measures.

Apprenticeships are not just important to the apprentices who benefit directly from them. They benefit everyone. They help ensure that our workforce is equipped with the necessary skills to enable us to compete in this era of globalisation. They are an essential ingredient in the Government’s efforts to rebalance the economy away from the City of London and towards manufacturing in places like Northwich and Runcorn. I am particularly delighted that in the past year there has been a 71% increase in new apprenticeships in my constituency.

All this progress is very encouraging, but there remains so much more to do. The challenge is to ensure that apprenticeships directly benefit those young people who are hardest to reach: those living in severely deprived areas, who may have grown up in a family where nobody has had work for several generations and whose opportunities have been far too limited for far too long. I know that the Government take that challenge seriously and are treating it as a priority. We need to drive up standards in all our schools, radically reform the welfare system, control immigration, cut red tape and rebalance our economy.

21:15

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Thank you for inviting me to speak in this debate, Mr Deputy Speaker, and I shall begin by setting out the context to my remarks. I, like many on this side of the fence, did not go to university, and I have always felt slightly ashamed that I did not have the academic qualifications to do that. When I left school, I undertook 18 months of training to become a Conservative party agent and it taught me a set of very good practical skills that enabled me to develop a business and got me involved in community consultation and giving advice.

The one thing I am very concerned about is “aspiration”, which nobody has mentioned in the debate. How do we get these kids to want to do a job when they come out of school? We need to do much more in that area. My constituency, and Plymouth’s economy as a whole, has a low-skills and low-wage base. It most certainly does not have that sense of aspiration and many children need to be encouraged to try to find it. As all hon. Members will know, Plymouth is one of the homes of the Royal Navy, although it is declining; we have fewer people with those kinds of skills. I have to blame the Navy slightly for that, because in the days when the dockyard was under public ownership a big skills base was not actually encouraged; the Navy wanted all the bright boys and girls to go to work in the dockyards. So anybody who went to any of the grammar schools was encouraged to go there, and an entire culture accompanies that. The one good thing that has emerged is that Plymouth university is now one of the centres for marine science engineering, which has most certainly made us a global leader in developing that area.

I spoke to a number of employers and individuals in Plymouth over the weekend, including some who were trying to get back into work service personnel who had left the forces. They found it very difficult to get those personnel to use their qualifications in other areas. When we debate apprenticeships we must think about how we transfer skills.

Another point that many people have made to me is that some people who want to become apprentices cannot read and write to a suitable level, which is an enormous indictment. I am delighted that Babcock, which tells me it has 20,000 training apprenticeships each year, has decided to support and sponsor the university technical college. That is exactly the route that we need to take; we need to take children from the age of 14 to 18 to make sure that they have basic skills, so that when they eventually go into the workplace they know what they are going to do.

In the final seconds available to me, I wish to quote from Franklin D. Roosevelt:

“We cannot always build the future for our youth, but we can build our youth for the future.”

That is the job that we should be about.

21:18

[Martin Vickers (Cleethorpes) (Con)]

I must compliment the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), on opening the debate with his usual eloquence. We in Lincolnshire know well his commitment to skills and apprenticeships. Hon. Members will be relieved to learn that the limited time available means that I am going to skip the statistics, but I must clock up the fact that in my constituency there has been a 47% increase year on year up to March. That is not in the premier league, but we would have readily accepted it had it been on offer when the coalition Government came to power.

The shadow Minister, the hon. Member for Blackpool South (Mr Marsden), drew attention in his opening remarks to the abolition of the regional development agencies, the changes to the college structure and so on, as well as the fact that that might cause some disruption. In my Cleethorpes constituency, the transition has been remarkably smooth. The colleges and other organisations, such as social enterprises and the CATCH, or Centre for the Assessment of Technical Competence Humber, facility at Stallingborough, which is the chemical industry training establishment, have come together and are working remarkably well together.

It was interesting to hear my hon. Friend the Member for Tiverton and Honiton (Neil Parish) draw attention to the need to have appropriate skills to drive a tractor, which light up like the deck of Concorde these days. A business man in my constituency came to see me a few weeks ago and I must confess that I was rather cynical when he told me that he had been looking for a forklift driver but that there was none available as “they”, meaning all the various agencies, do not produce them any more. When I took my first job as an office junior in a printing works in Grimsby some 40 years ago, when one stepped out into the yard one put one’s life at risk with all the forklifts shooting one way and another, and that meeting made me ask whether private industry was contributing. If people want a forklift driver, is it all that difficult to go out and employ someone and to do the training themselves? I take note of what my hon. Friend said, however, and I recognise that life and qualifications are much more complex now. Perhaps we have created too complex a regime in that regard.

It has been fashionable for Government Members to say that they did not go to university. I went to university at the age of 48 to study politics, and look what happened to me.

I want to draw attention to the fact that the Government have recognised the problems of my area, creating two enterprise zones that have enormously encouraged local industry and enterprise. May I suggest, however, that more could be done to fund apprenticeships within enterprise zones, with perhaps some ring-fenced moneys to create a work force with the skills to last. Like my hon. Friends the Members for Pudsey (Stuart Andrew) and for Weaver Vale (Graham Evans), I experienced redundancy. It is not pleasant and we must do everything we can to encourage and support our young people with the training and apprenticeships they need. I congratulate the Government on what they have achieved in the past 18 months.

21:22

[Richard Graham (Gloucester) (Con)]

What a pleasure it is to join this vital debate on one of my favourite subjects—apprenticeships. I start by paying tribute to the coalition Government and the Minister for rightly identifying apprenticeships as a crucial part of improving the nation’s skill base, helping business grow and providing the young with genuine future opportunities.

My constituency, Gloucester, is famous for making things, so I was an early convert to the concept and practice of apprenticeships. That is why I first spoke in this House to support the additional apprenticeships funded in the emergency Budget of May last year and urged the Minister even then to do more. That is why I recruited my own apprentice at the beginning of this year and am collating data on all Members to ensure that we hold the Minister to the generous promise he gave in a Westminster Hall debate to provide a reception for the first 100 apprentices employed by MPs. Let us hold him to that promise.

Today, the Minister highlighted his intention to fund higher apprenticeships in several sectors and I hope that inspires the insurance company, Ecclesiastical, which is headquartered in Gloucester, and banks such as the Co-op, which I hope will shortly take over the former Cheltenham & Gloucester branches, to join other sectors in taking on apprentices. The Minister also highlighted moves to incentivise SMEs to take on apprentices and I hope that they will respond. I believe that there is a challenge here, not in the funding, the will or the incentives—those are in place—but in business confidence and the time of very small businesses to absorb the details of new schemes.

My first recommendation to the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), concerns the National Apprenticeship Service, which has done a fantastic job. I pay tribute to Gina Johnson of the NAS, who did a great job in Gloucestershire—I am sure her successor will do the same. The NAS has only one representative per county. I believe it needs to adopt some modern marketing techniques, such as having superb DVDs available on its website that can be shown by the Federation of Small Businesses and local chambers of trade and commerce to inspire the smallest employers to take on apprentices. I urge the Minister to consider that.

Secondly, all Members of the House could champion apprenticeship fairs in their constituency. I know the one that I helped to organise last year in Gloucestershire, which the Minister kindly came to, was incredibly positive and is part of the reason new start-up apprenticeships in our city doubled between 2009 and 2011 from 510 to 1,020. The fair contributed to the extraordinary increase across the county, where there are now more than 4,000 apprenticeships.

Thirdly, we are fortunate in Gloucester to have the extremely proactive Gloucestershire media and the local newspaper, The Citizen, which launched the 100 apprenticeships in 100 days campaign that has been widely copied around the United Kingdom. In 2012 it is launching the Gloucestershire apprenticeship awards. This happy event is taking place on my birthday and I hope very much to launch the MP for Gloucester’s female apprentice of the year award at that happy occasion. I urge other Members to consider doing likewise.

Fourthly, every local enterprise partnership should have a spokesperson for apprentices, as we do in Gloucester, in order to encourage employers to push the apprenticeship agenda forward and benefit from this growth opportunity. It can also encourage local content of public sector contracts, such as the one for the Gloucester academy, which is very important. Lastly, I urge all schools to bring their pupils to local apprenticeship fairs, recognising that the sky is the limit for apprenticeships and that this is a great way forward for many young people.

21:26

[Mr Robert Buckland (South Swindon) (Con)]

It is a pleasure to take part in a debate that has been wide ranging, informative and extremely useful. There has been much discussion about what an apprenticeship means. There is a consensus that it is a paid job of work that involves training both on and off the job, and that there must be an outcome that is a success in terms of employment, enhanced skills and re-entry to the work force.

Just before speaking, I was reminiscing in my mind about the experiences that my grandfather had as a manager of a labour exchange in south Wales in the middle of the last century, where it was his mission to try to match the skills that he found in the work force to jobs available out in the marketplace. The position has not really changed. Often there is still, sadly, too great a mismatch between the skills that are available and the jobs that are out there.

I have the pleasure and the honour of representing a town that is one of the driving forces of our national economy, Swindon, which is renowned for making things and for generating new investment, new ideas and new industry. In my constituency, South Swindon, I am proud to say that we have seen a 48% increase in the uptake of apprenticeships in the past year. That is very encouraging, but it is important to focus on the position of 16 to 24-year-olds, and especially 16 to 18-year-olds, who have particular difficulty, it seems, in accessing the workplace.

I am glad to say that locally, with the help of agencies in the private sector, we have been able to launch Plan 500. I had great pleasure in playing my part in helping to launch it last year with my hon. Friend the Member for North Swindon (Justin Tomlinson). It is supported by Swindon Strategic Economic Partnership and firms such as Nationwide and it has brought local businesses and the community together to create 500 opportunities for local young people, 16 to 18-year-olds in particular, involving apprenticeships, work experience and placements on mentoring schemes. I am glad to say that the figure now has exceeded 500 and the scheme continues.

I mention other types of work experience because I believe that access to apprenticeships is so important. Many young people do not have the skills to access and to benefit greatly from apprenticeships, which is why the Government’s access to apprenticeships programme is very important. It will work well if it is truly co-ordinated with the DWP’s Work programme, which is already delivering for people in my constituency, giving them the wherewithal they need to seek and already to obtain jobs.

The Government’s increase of £410 million by 2012 in spending on apprenticeships is testament to the passion that my hon. Friend the Minister shows for this subject. He is one of the last great romantics. He paints a broad canvas of an optimistic horizon, and he is right to do so.

Today in Swindon we had welcome news that Honda is to increase employment by 500 following on the production of the new Civic. I hope that that welcome Christmas present will yield further fruit in the form of apprenticeships and real employment for young people in my constituency.

I look to further progress being made in the years ahead to ensure that as many people as possible benefit from the opportunities that apprenticeships offer.

21:30

[Sheryll Murray (South East Cornwall) (Con)]

I am proud to be part of a Government who have seen the biggest boost ever in the number of apprenticeships. We have seen a rise of new apprenticeship starts of only 10% in my constituency, but that is partly because traditionally people from South East Cornwall have travelled across the Tamar to the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) for training. That has gone on historically and it continues and grows.

I want to tell the House about one young lady from my constituency whom we have helped. Charlotte Rose is doing an apprenticeship learning school administration through first-hand experience at St Martin’s Church of England school in Liskeard. This apprenticeship was made possible only through the cash incentives that the Government announced in November, offering employers £1,500 if they had 50 employees or fewer. Charlotte told me that she had planned to go to university, but she saw this as an opportunity, and I applaud Charlotte and the school for making that possible.

On Friday, I visited the Grayhound project in my constituency, and I was delighted to see that at last, through the apprenticeship scheme, shipwrights and marine electricians are getting training. It is easy for a shipwright to find work as a carpenter on a building site, but a trained carpenter cannot work in a shipyard and become a shipwright. The same applies to marine electricians. These skills have been traditional throughout South East Cornwall and they have been lost. I am delighted to be part of a Government who are providing the training, facilities and employers for those lost trades to continue. That is why I applaud what the Government are doing today.

21:33

[Priti Patel (Witham) (Con)]

I commend the Government on demonstrating their commitment to supporting opportunity and job creation by prioritising the development of apprenticeship places. The fact that a record number of apprenticeship starts took place in 2010-11 is something to celebrate. For the record, in Witham we have had a 70% increase in the number of apprenticeship places over the past 12 months. I also praise Essex county council for its role in spearheading that. It has invested resources into apprenticeship places and is working with businesses to get young people into employment and training. That shows a clear dividing line between the failed policies of the last Labour Government and the positive steps taken by Ministers since May 2010.

Let us not forget Labour’s lack of ambition on apprenticeships as they sought to herd people through university in a very much one-size-fits-all approach to post-16 and post-18 education. We heard lectures earlier from the Opposition Benches, which are now deserted, but Opposition Members are in no position to give lectures on boosting economic growth or tackling unemployment because, as we heard in the debate, youth unemployment rose by over 40% under their watch. That is why the 400,000-plus new apprenticeship starts last year stand as a real tribute to the exceptional efforts of the Minister for Further Education, Skills and Lifelong Learning, who has worked tirelessly to deliver rapid increases in the number of apprenticeship places being offered to young people and the unemployed across the country. They are new opportunities to develop skills, enhance their experience and progress into long-term employment.

I should declare an interest, as I was recently delighted to welcome the Minister to my constituency on a visit to see the outstanding work being undertaken by an organisation called Lota Training to secure apprenticeship places for young people. It specialises in apprenticeships places and works hard with many local businesses of all shapes and sizes. It is innovative and creative in looking at new ways of working with business and creating more opportunities. During his visit he heard about the good work Lota is doing and about the partnerships it is forging not only with local businesses, but with firms in the City of London and large international companies to provide opportunities across the country, which is to be commended.

In the minute remaining, I would like to refer to small businesses, because about 83% of local jobs in my constituency are in the private sector and in small and medium-sized businesses. That figure is about 15% higher than the national average. As you will know, Mr Speaker, Essex is a highly ambitious and entrepreneurial county that is full of small business people. There is no doubt that they are keen to create new jobs, but they have found it difficult to take on more apprentices over the past few years, which is why I welcome the positive measures that the Minister outlined today. I certainly look forward to seeing more of my local businesses thrive, prosper, grow and, importantly, provide many more opportunities to young people through apprenticeship schemes.

21:36

[Ms Karen Buck (Westminster North) (Lab)]

We have enjoyed a thoughtful debate this evening with contributions from both sides of the House that have stressed Members’ real concern, and interest in, apprenticeships and the need to raise the skills base among young people and the general population. In particular, I congratulate Members on both sides who have taken on apprentices, with your support, Mr Speaker, and hope that that will encourage others who have vacancies to divert them to that purpose. [Interruption.] I apologise to the House—I have a terrible cold and my throat keeps catching.

We heard some thoughtful contributions from Opposition Members. The hon. Member for Strangford (Jim Shannon) asked where the strategy was for linking youth unemployment to apprenticeships. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) spoke from personal experience about apprenticeships and warned about the impact of the cuts in the construction industry and the extent to which they might choke off opportunities for young people in that important sector. My hon. Friends the Members for Inverclyde (Mr McKenzie), for Sheffield Central (Paul Blomfield) and for Scunthorpe (Nic Dakin) all made pleas for making better use of public procurement powers, which is a message I would also like the Minister to take away. My hon. Friend the Member for West Bromwich West (Mr Bailey), who chairs the Business, Innovation and Skills Committee, and others mentioned their fears about the extent to which adult in-work training programmes are branded as apprenticeships—I will touch upon this in my contribution—in the context of the abolition of Train to Gain. Although in-work programmes offer important skills training to older people, they are not exactly what many of us consider to be apprenticeships.

When the Minister made his contribution at the start of the debate, he used poetry and spoke from the heart, and I genuinely believe that he has a passion for apprenticeships and for providing an alternative to the traditional academic and higher education route, particularly for young people. That message was reinforced by the overwhelming majority of contributions we heard this evening. That was at the heart of the report on 14 to 18-year-olds’ education by Professor Wolf, who stressed the importance of expanding the number of high-quality apprenticeships that offer genuine career progression to young people. We are all as one in saying that apprenticeships are of equal value and provide an alternative and equally important route for young people through post-16 education.

The Labour Government made substantial progress on that issue, as well as on increasing—quite rightly, and for which I make no apology—the number of young people who went into higher education. In the globalised economy in which we operate, it is absolutely essential that we do not tip the balance the other way and underplay the importance for many of our young people of a university education.

We quadrupled the number of apprenticeships to 279,000, and those who make much of the additional apprenticeships that the coalition Government have introduced have not stressed the context of the abolition of the future jobs fund, which was intended to provide 200,000 jobs for young people; the rise in youth unemployment, which is now at its highest level since comparable records began in 1992; or the rise, by 140,000, in the number of young people not in education, employment or training. The Minister spoke of the number of NEETs being 925,000 in 2009, but that figure now exceeds 1.1 million.

The additional apprenticeships that are being provided—and they are being provided; that is not in doubt—must therefore be seen in the context of the rise in demand and need, particularly among young people, and the abolition of the future jobs fund. Alongside that, young people have also borne the brunt of many other Government cuts, which have had an impact on their ability to access and make better use of skills and training. Those cuts range from the abolition of the education maintenance allowance to the scrapping of Connexions, access to face-to-face careers advice and youth work and mentoring services, which were also an important signpost for such skills and training.

Overall, as many Opposition Members have said, while the economy is flatlining employers and, especially, small employers are unlikely to respond with apprenticeships, employment or work training on the scale that we would like. A recent Federation of Small Businesses survey showed that only 8% of the small businesses surveyed had taken on an apprentice in the previous year, and that is a particular concern, because we know from labour force survey statistics that in the past more than half of apprenticeships were based in businesses with fewer than 50 employees.

We welcome the Government’s incentive scheme, which I hope will be effective, because it certainly needs to be in the economic context in which we operate, but I add my voice to those asking the Government to review as soon as possible the incentive payment’s concentration only on those businesses with fewer than 50 employees, as we also want to put a great deal of stress on the role of medium-sized organisations—those with between 50 and 149 employees—in creating employment.

The £1 billion youth jobs fund that the coalition is delivering via the Work programme is also a cause for concern, because it is unlikely to have any impact on the delivery of apprenticeships to young people, so I hope that it too will be reviewed. Money and effort are being concentrated on a Work programme, but we need to ensure that it delivers apprenticeships, too.

Almost all Opposition Members who spoke stressed that the growth in apprenticeships, of which Government Members have made so much, has not delivered for young people in the way it has for their older counterparts. That masks a genuinely worrying position for young people. In 2009, the final year of the Labour Government, 42% of apprenticeship starts went to those aged under 19; in 2010-11, that figure had fallen to 29%. In 2009, 41% of all starts went to 19 to 24-year-olds, and that figure had fallen to 31% last year. That is genuinely concerning. Given the crisis of youth unemployment, we need to make absolutely sure that the opportunities out there are going to young people who need them.

In the context of the abolition of Connexions and the reduction in funding and access to a face-to-face careers service, it is also important that the young people most in need of accessing apprenticeships have the knowledge and support to be able to do so. In the past few months, I have had extensive first-hand experience of working with young NEET children who need access to apprenticeships and training. They have so little ability to be guided to the opportunities that exist, and that is worrying. The issue of confidence among young people without good qualifications is critical; it is no good simply relying on access to the internet and telephone advice lines. Even for those who are able to use those, making that first contact requires a mentor—a guide and someone to advise them. Without that, I fear that those who most need support will be those least able to access it.

Members have spoken about pre-apprenticeship training, which I would also like to emphasise. About 10% of young people not in education, employment or training have been in that situation for a year or more. They are a core group about whom we should be most concerned. Such an experience, at that stage in life, can be absolutely devastating to a young person. As the Minister is aware, many of those young people have not got GCSE C grades in English and maths, in particular. The problem is that because there is such competition for the apprenticeships that now exist, particularly among young people who have been through a university education, young people without a GCSE find it very hard—in some cases, impossible—to get on the first rung of the apprenticeship ladder.

Although additional skills training within the apprenticeship programme is welcome, we need to make sure that we are not locking out some of the young people with particular needs. That issue has been raised with me by the apprenticeship training agencies, which are very concerned about the issue. It is particularly worrying because a young person who has perhaps done all right at GCSE, but not got a C grade in maths or English, will be required to retake before they even get on to the apprenticeship programme. That can be difficult and challenging.

I have been impressed with the work of my local regional apprenticeship training agency with young NEETs. Some of its outcomes are very impressive: 90% of its apprenticeship starts involve young people who are not in employment, education or training. All its apprenticeships starts are new placements, not conversions, and 99% of them are in the 16-to-24 year-old age group. However, there is a worry that the Government are not making such good use of the resources and skills that such agencies provide. It would be helpful if the Minister confirmed that client hosts of apprenticeship training agencies will be included as beneficiaries of the £1,500 apprentice incentive schemes. Will the Minister meet representatives from the new Confederation of Apprenticeship Training Agencies to discuss that?

In conclusion, we welcome an expansion of apprenticeships. Any good news, money or resources in the field are welcome and need to be supported. However, given the issue of access to the additional places, there is still a real risk that young people are being left on the shelf. We look to the Government not only to congratulate themselves on a higher number of apprenticeships overall but to address more effectively how to respond to the national emergency engulfing so many of our young people.

21:48

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

This has been a good-humoured and well attended debate at a time when the press would have us believe that we are all on beaches taking holidays. There has been a good degree of unanimity, and I thank hon. Members on both sides for some incisive and shockingly well informed contributions. The debate has also been competitive: people were competing not only over who had the greatest increase in apprenticeship numbers, but over how few qualifications they got at school, how early they left school and how they never got anywhere near university or any form of higher education. Some had also experienced redundancy; that is good practice for when election time comes.

This debate is a great tribute to the enormous amount of constituency experience that all hon. Members have spoken about regarding the projects in their own constituencies. That is what we are doing in the time we are not in this place, if only the media would pay some attention. It is really refreshing to see the whole House agree on the importance of the apprenticeship programme in offering a valued and valuable route for young people who want to work while getting training that can support their careers.

It is always difficult, Mr Speaker, as you know better than many, to follow my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, whose opening speech was steeped in, or positively intoxicated by, his perspicacity, his articulation, his sagacity and his commitment. He will no doubt be very pleased that during his short departure for the dinner hour, in which he is no apprentice, I agreed to a great number of visits to various constituencies, including that of the shadow Minister, the hon. Member for Westminster North (Ms Buck), who will be more than delighted to take up the offer.

Let me make it clear that this Government are absolutely determined to make the apprenticeship programme as effective as possible for as many young people as possible. We want to expand the programme and drive up quality across the board. I take this opportunity to repeat my hon. Friend’s appeal in inviting hon. Members to take on their own apprentices and get involved in national apprenticeship week from 7 February.

Many employers and apprentices are telling us that young people are not receiving enough information in schools about vocational pathways in general, including apprenticeships, or that the information they do receive is not of a good enough quality. From September 2012, the Education Act 2011 will place a new duty on schools to secure access to independent, impartial careers guidance for pupils in school years 9 to 11. Subject to consultation, this will be extended down to year 8 and to young people aged 16 to 18 in schools and further education settings. Under the duty, careers guidance must be impartial, it must be provided in the best interests of the student, and it must offer information on all 16-to-18 education or training options. The new duty makes it a specific requirement to provide information on the benefits of apprenticeship options. I encourage anyone with a specific concern to contact my hon. Friend the Minister, along with any applications for visits, and bring it to his attention.

Given the quality of the contributions that we have heard, I will go through those rather than stick to the script. That always alarms officials, but let us give it a go. My hon. Friend the Member for Stevenage (Stephen McPartland), who had a 73% increase in apprenticeships in his constituency, talked about young people hungry to learn and achieve. His comments on the welding skills college demonstrated how well our colleges are responding to the new freedoms that we have given them and rising to the challenge in this respect.

The hon. Member for Sheffield Central (Paul Blomfield) spoke about the low numbers of small businesses that have so far taken up apprenticeships. That was raised many times by hon. Members, and it is very important. In response to his point about public procurement, my hon. Friend the Minister has taken up that issue with gusto. He is introducing a kite mark for Government suppliers who have embraced the apprenticeship programme and is providing more information for Departments in their procurement programmes. In addition, ministerial champions are promoting apprenticeship in the context of public procurement campaigns. All those points were well made and, characteristically, my hon. Friend had already anticipated them.

The hon. Member for Solihull (Lorely Burt), who had a 53% increase in her apprenticeships locally, asked for details of the £1,500 bonus. Those will be forthcoming early in the new year; perhaps she, too, would like to book a meeting with my hon. Friend the Minister.

The hon. Member for West Bromwich West (Mr Bailey), who is Chairman of the Select Committee and who had a 64% increase in apprenticeships in his constituency, made the very good point that quality is the all-important factor. This must be about providing enhanced employability to those who have undertaken apprenticeships, but we must also get value for money. As for the legacy of Train to Gain, a 60% deadweight cost was attached to that programme, so we now have one that is much better value for money.

My hon. Friend the Member for Selby and Ainsty (Nigel Adams) has had a 67% increase in apprenticeships; the figures in his constituency speak for themselves. He spoke of the importance of getting good increases at level 3 and of good literacy and numeracy skills; that is why English and maths must be up to a good GCSE standard.

The hon. Member for Scunthorpe (Nic Dakin), who has had a 55% increase in apprenticeships in his constituency, mentioned the parliamentary apprenticeship scheme and the importance of impartial, independent careers advice.

My hon. Friend the Member for Dudley South (Chris Kelly), who has had a 67% increase in apprenticeships, offered himself as the Kelly visiting services for any company in his constituency that has taken on apprentices. He spoke with great experience as his own family business has long taken on apprenticeships, before it even became fashionable.

The hon. Member for Liverpool, Walton (Steve Rotheram) grudgingly acknowledged the 65% increase in apprenticeships in his constituency. He, too, spoke from experience as somebody who has been an apprentice and who became an instructor. He again raised the important issue of procurement.

My hon. Friend the Member for Crawley (Henry Smith) has had a 70% increase in apprenticeships. It was as though he was name-checking his Christmas card list of businesses, which he did with enormous aplomb and without notes. He mentioned Virgin Atlantic, which runs very worthwhile high-tech apprenticeship schemes in aircraft engineering in his constituency. The hon. Member for Inverclyde (Mr McKenzie), another former apprentice, mentioned the determination of young people to succeed.

My hon. Friend the Member for Pudsey (Stuart Andrew), who has had a 67% increase in apprenticeships in his constituency, boasted that he had been unemployed. He spoke about the self-worth, values and socialising skills that such schemes give people. He reminded us that youth unemployment is not a new phenomenon, but that it started going up drastically from 2004.

In response to the hon. Member for Strangford (Jim Shannon), my hon. Friend the Minister for Further Education, Skills and Lifelong Learning assures me that he has been in constant talks with the devolved Administrations over these schemes. As the hon. Gentleman said in relation to educational achievements in Northern Ireland, there are things that we can learn from each other. We need to share and disseminate best practice.

My hon. Friend the Member for Gosport (Caroline Dinenage) made a very good point about the Babcock training centre. She also spoke about getting apprentices into schools to ensure that pupils know what apprenticeships are about. There is almost an apartheid system whereby one either goes to university or does not go to university. However, there are many worthwhile and often lucrative options in between. We need to ensure that our young people have those options before them as early as possible.

My hon. Friend the Member for Burton (Andrew Griffiths) boasted that with a 68% increase in apprenticeships, he was the winner in the raffle of training opportunities. He was wrong, because my hon. Friend the Member for Battersea (Jane Ellison) has had an increase of 109% in her constituency. My hon. Friend the Member for Burton also boasted that he had not been to university, but perhaps a little more maths experience would not go amiss. He, too, invited my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to visit, because apparently the principal of Burton and South Derbyshire college is eager to embrace him. I hope that he has long arms and I warn him that my hon. Friend is not partial to continental kissing.

My hon. Friend the Member for Tiverton and Honiton (Neil Parish) has had a 38% increase in apprenticeships in his part of the world. He spoke about SMEs and the low rate of take-up. That is something that we must get on to. He also talked about how high tech agriculture has become—this debate is not just limited to the traditional manufacturing industries.

My hon. Friend the Member for Milton Keynes South (Iain Stewart), who has had a 71% increase in apprenticeships, mentioned what a strong role MPs have to play. I echo that. We can all do a good job of getting our local businesses to engage with this programme.

My hon. Friend the Member for Morecambe and Lunesdale (David Morris)—I am determined to get through all the hon. Members who spoke—has had an 81% increase in apprenticeships in his constituency. He made the important point that the inflexibility of health and safety constraints can be a deterrent to people getting more involved in the apprenticeships programme.

As I said, my hon. Friend the Member for Battersea has had an increase of 109% and is the winner this evening. I confirm that my hon. Friend the Minister has been liaising with the deputy mayor on the programmes that she mentioned. The Mayor of London, Boris Johnson, who I hope will also be the next Mayor of London, has thrown himself into the apprenticeships programme.

My hon. Friend the Member for Weaver Vale (Graham Evans) also boasted about leaving school early and not going to university. He reminded us that youth unemployment did not start under this Government.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile), who has had a 41% increase in apprenticeships, rightly spoke about aspiration and how we need to take basic skills into the workplace.

My hon. Friend the Member for Cleethorpes (Martin Vickers), who has had a 41% increase in apprenticeships, went to university at the age of 48 and studied politics. He did not tell us whether he passed, but he ended up here anyway. He made a practical point about enterprise zones and the funding of apprenticeships.

My hon. Friend the Member for Gloucester (Richard Graham)—plus 35%—is a trailblazer of the parliamentary apprenticeship scheme, and he mentioned practical measures such as apprenticeship fairs and DVDs to promote apprenticeships.

My hon. Friend the Member for South Swindon (Mr Buckland), who has had a 48% increase in apprenticeships, talked about the mismatch between skills and jobs, and again gave examples of great stuff that is going on. My hon. Friends the Members for South East Cornwall (Sheryll Murray)—plus 10%— and for Witham (Priti Patel), with plus 68%, also gave good, practical examples. This has been an excellent debate, so well done—

20:48

Motion lapsed (Standing Order No. 9(3)).

NHS Services in Blackpool South

Monday 19th December 2011 Commons Chamber

22:00

[Mr Gordon Marsden (Blackpool South) (Lab)]

I have the pleasure and honour of presenting to the House a petition of more than 1,000 people from Blackpool South.

The petition states:

The Petition of residents of Blackpool South,

Declares that the Petitioners are concerned that the Government’s Health and Social Care Bill, with its proposed changes to the NHS, will adversely affect NHS services for residents across Blackpool South.

The Petitioners therefore request that the House of Commons urges the Government to amend the Health and Social Care Bill so as to secure existing levels of funding and service provision for NHS patients in Blackpool South.

And the Petitioners remain, etc.

[P000994]

Mental Health Unit (Burton)

Monday 19th December 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Michael Fabricant.)

22:01

[Andrew Griffiths (Burton) (Con)]

I thank you, Mr Speaker, for allowing this important debate today. Although this issue may not be big news nationally, it is incredibly important for the people of Burton and east Staffordshire. If we want to make Parliament more relevant and debate the issues that matter to people, debates such as this one, which is about a key local facility, will do a great deal to enhance the House’s reputation for being in touch with real people and their concerns.

I speak about the Margaret Stanhope centre, a very important mental health facility that is much loved and valued in Burton, east Staffordshire and south Derbyshire. South Staffordshire primary care trust is consulting on the closure of the centre, which would mean the loss of 18 acute beds and eight elderly care beds in the facility.

I have been a Member of Parliament for some 18 or 19 months now, but I have not seen an issue that has united people in the way that the campaign to keep open the Margaret Stanhope centre has. At this point, I should like to pay tribute to two gentlemen who are in the audience today, Dr Matt Long and Mr Gerald Chatfield. They have been at the forefront of the SOS—“Save our Stanhope”—campaign, and they have worked diligently and tirelessly to bring the threat of the closure of the Margaret Stanhope to the attention of people in Burton.

I should also mention the invaluable contribution of the Burton Mail, a well respected local newspaper that covers both east Staffordshire and south Derbyshire. It has led the campaign and represented the views of local people extremely well having brought the matter to their attention. I pay particular tribute to the reporter Adrian Jenkins, who has doggedly sought out the facts, and Mr Kevin Booth, who, in his time as editor of the Burton Mail, has turned it into a campaigning newspaper that is properly representative of local people.

The PCT has failed to take account of the grave impact that closing the Margaret Stanhope centre will have on mental health provision across Staffordshire and south Derbyshire. Losing those 18 acute beds and eight elderly beds will leave us with 20 acute beds and 11 elderly beds at the George Bryan centre in Tamworth, and a further 50 acute beds and 26 elderly beds at the St George’s hospital in Stafford, giving a total of 70 acute beds and 37 elderly beds for the whole area covered by the South Staffordshire PCT. I have done some research into this issue, and I have come across an important report that the Audit Commission produced in March last year. That report looked at the provision of mental health in-patient beds at 46 mental health trusts across the country, giving a snapshot of a large number of mental health providers up and down the country. That evidence showed that the median number of beds per 100,000 people was 27.5, yet in south Staffordshire, which has a population of 606,100, we currently have 88 acute beds.

I was rebuked by the Minister earlier for not having very good maths—[Interruption]—the Minister in the previous debate—but I have done the maths and I have had it checked. It shows that the figure for south Staffordshire equates to 14.5 per 100,000. Why should my constituents—people covered by the South Staffordshire PCT in east Staffordshire and across Stafford—be satisfied with the provision of less than half the median number of beds provided to other constituents and residents across the country? My residents think that that is simply not acceptable and they are saying no to that provision.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this matter to the Chamber. Has any consideration been given in his investigations to the impact on the families of those who would be in those beds, but who suddenly do not have them and will now be at home? What will happen with care in the community for them?

[Andrew Griffiths]

The hon. Gentleman makes a valid point, which I hope to come to later in my speech. He has served his community well over many years and he properly understands the needs of families, particularly the most vulnerable in our society.

Removing those beds from the Margaret Stanhope centre will bring the median down to 11.5 per 100,000 people, compared with the median of 27.5 across the country. That is putting lives at risk, and we are not prepared to put up with it in east Staffordshire.

The Audit Commission report also talked about occupancy rates, saying that the median occupancy rate across those 46 trusts was 90%. I requested the occupancy rates from South Staffordshire PCT—I think it took five weeks to winkle, or drag them, out of the PCT. I was provided with the figures for April 2010 to August 2011. I examined them and found that, with the beds at the Margaret Stanhope centre still in place, the occupancy rate across the PCT was 87%.

[Dr Julian Lewis (New Forest East) (Con)]

This debate gives me such a sense of déjà vu, because a few weeks ago I initiated a debate about how Southern Health NHS Foundation Trust, which has a bed occupancy rate of over 90%, wants to close 35% of its acute beds. Like my hon. Friend, it took me a long time to get the statistics from the trust. When I asked for them to broken down in a different way, the breakdown showed twice as many beds being vacant as the first lot of calculations did. In other words, the trust has not got a clue what its own statistics add up to, yet it is intent on closing beds. Accurate statistics must be central to any consideration, and I think that my hon. Friend and I ought to go and see the Minister about this, if he would be willing to see us.

[Andrew Griffiths]

My hon. Friend makes an incredibly important point. He has been vociferous in campaigning on behalf of his local residents—as I am attempting to do—and I share his concerns. None of us is a backwoodsman, and none of us wants to ignore the facts, but the facts that are being presented to us by the PCTs are not the facts. When we dig down and look at the assertions that the PCTs are making, they simply do not add up. I shall give the House further evidence of that later.

For the six months during which we were able to examine the occupancy rate, we found that it was already more than 90%. In June 2010, it exceeded 100%, yet the PCT is telling us that it can safely remove those 18 beds from Margaret Stanhope with no impact on mental health provision in my community. I simply do not accept that.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing the debate and getting the Minister here to listen to it. I also want to praise the campaigning work of Dr Long, Mr Chatfield and the Burton Mail. My constituency of South Derbyshire is a neighbour of east Staffordshire, and we do not have a hospital. My constituents have to travel either to Derby or to Burton, and my southern villages are covered by the South Staffordshire PCT, which is why my hon. Friend and I have come together on this important issue. It is outrageous that one of the excuses that the PCT is putting forward is that people want care in the community. What people want is respite care, and that is why it is so important that the unit should stay open.

[Andrew Griffiths]

My hon. Friend has been brilliant and steadfast in standing alongside me in my attempt to keep open this valuable facility, and I pay tribute to her for that.

Time is moving on, and I want to get to the facts. We extrapolated what the occupancy rates would have been if the Margaret Stanhope centre had been removed. We found that there would have been an average of 113%, and that in June 2010, it would have been 130%, which is a third more than the 100% that I just mentioned. The PCT tries to argue that in-patients can be cared for in their own homes, but I can prove that that is simply not tenable. In an interview in the Burton Mail, the consultant psychiatrist to the PCT, Abid Khan, who is also the clinical director of adult mental health services at the South Staffordshire and Shropshire NHS Foundation Trust said that he had reduced in-patient stays “by a third”. That is a direct quote. He also cited an independent report undertaken by Staffordshire university.

As my hon. Friend the Member for South Derbyshire (Heather Wheeler) will know, that same report was cited at a passionate public meeting held at the Pirelli stadium in Burton. The report stated that the crisis resolution team could reduce in-patient stays by a third. I asked to see that report. It was also requested by Dr Matt Long, and, after a great deal of fighting, Dr Long managed to get hold of it. We discovered that, far from being independent, it had been produced by Professor Eleanor Bradley, who works not only for Staffordshire university but for the NHS trust. The PCT was claiming that the report was independent, yet it had been produced by someone who was on its payroll. Abid Khan talks about the one third reduction in patient stay, yet when we examine the figures we find that stays over 91 days have been reduced from 39 to 23 days—a reduction, even according to my maths, of about a third—but those between two days and 90 days, which are the vast majority, went down from 524 to 518, a reduction of only six. One-day admittance went up from 48 to 50.

The PCT claims in aid an independent report that is not independent, which states that in-patient stays were reduced by a third, when it is clear that they were not. The PCT expects people to accept the closure of this much-loved facility on the basis of dodgy figures. I put it to the Minister that a PCT cannot be allowed to conduct a consultation in this way, because the consequences are too dangerous to contemplate.

My hon. Friend the Member for Strangford (Jim Shannon) has spoken about the impact on families. We all know that families are hugely important in helping people back into mental health well-being and can act as a huge tonic and support. For those who have to go to St. George’s in Stafford, it is a 27-mile trip one way. [Interruption.] My hon. Friend the Member for South Derbyshire says from a sedentary position that there is no bus from South Derbyshire. That is true. It is 47 minutes by car from Burton. It is an hour on the train, costing £13.50 for a return ticket; then there is a seven-minute bus ride, costing a further £3.50, and a seven-minute walk. A family member wanting to visit a son or daughter, a husband or a wife would face a two and a half hour round trip. It would cost £117 a week or £470 a month. These are some of the most vulnerable people in society, but the PCT thinks it can overcrowd the beds, force people to travel those distances and still provide mental health care that is adequate. I say no—and, more importantly, the people of Burton and South Derbyshire say no.

As a result of the work of Dr Long and of the Burton Mail, 7,500 people have signed a petition to keep the Margaret Stanhope centre open. I have cross-party support for my efforts. East Staffordshire borough council passed a resolution in which every single member united in support for the Margaret Stanhope centre, with Labour councillor standing next to Conservative councillor and the mayor of East Staffordshire, Patricia Ackroyd, manning the battle lines in cold, wet and miserable weather to get people to sign the petition.

I want to make one last point that relates to other services. We all know that people experiencing mental breakdown can often be a danger to themselves or to others. We recognise that the police are at the forefront of dealing with people—it might be a small number—who experience the most acute breakdowns. People often break down in the middle of the night and at the most inconvenient times; they can be a danger to themselves and a danger to their families. Currently, if the police are called to someone at 2 am or 3 am on a Friday or Saturday night, they will try to calm the person as best they can and take them to the Margaret Stanhope centre because they know that the person will get the proper care and support that they need.

I believe that if the Margaret Stanhope centre closes, the police will be faced with two options. Two police officers—they have to travel in pairs—will have to travel all the way to Stafford or Tamworth to drop off a vulnerable person and then come all the way back, which will probably take them out of action for two or three hours. Even worse, however, a vulnerable person might be put in a police cell overnight until the crisis team can come to them. We cannot allow vulnerable people in acute mental breakdown to spend a night in the cell. That is simply not acceptable.

I am hugely grateful, Mr Speaker, for the opportunity to bring this debate to Parliament. I know—I had a text earlier from someone saying, “Andrew, will you straighten your tie?”—that people are watching this debate on television in Burton. I know that there is interest in the issue, because I know that the people of Burton and South Derbyshire care passionately about it. The Margaret Stanhope centre has saved lives. It has rebuilt lives. People throughout my constituency owe a debt of gratitude to the magnificent people who work in this institution, and I owe it to them—and the House owes it to them—to ensure proper consideration.

I will leave the House with the words of one of my constituents, who came up to me on one of those mornings when we were collecting signatures in the high street in Burton in the pouring rain. She said that she had had cause to go to the Margaret Stanhope centre, and that when it happened she was married and had two children. She did not know where she was when she arrived at the centre. She did not know whether she would live through the day, and she did not know whether she wanted to live through the day. But she now knows that the care and compassion of the people in the centre, and the love and support of her family who were able to visit her every day, allowed her to rebuild her life, to go back to society and to work, and to go back to being someone of whom her family could be proud.

It is people such as that whom we are here to support today. I hope that the Minister will accept that, and will help us in our campaign to keep the Margaret Stanhope centre open.

22:21

[The Minister of State, Department of Health (Paul Burstow)]

I congratulate my hon. Friend the Member for Burton (Andrew Griffiths) on securing the debate and on making his points so clearly on behalf of his constituents. I also congratulate him on demonstrating why Adjournment debates are so important: they give Members in all parts of the House an opportunity to bring issues to the attention of the public, and also to serve their constituents by bringing issues to the House in a way that requires Ministers to be accountable.

I am aware, from what my hon. Friend has said this evening also from my preparation for the debate, of the strength of feeling in my hon. Friend’s constituency. I noted his description of the contribution made by his local newspaper, the Burton Mail, in leading the campaign at local level. The 7,500 signatures to the petition that have been collected so far are an impressive indication of the extent of public support and concern.

Let me say a little about the national policy context, some of which I have said on other occasions. In February this year we published our mental health strategy, “No health without mental health”, which I commend to Members in all parts of the House and, indeed, to my hon. Friend’s constituents. Let me now make two specific points. First, we expect the treatment and care of patients to be provided in the environment that is most appropriate and therapeutic for the patient. Acute beds should of course be available for those who need them, and those in charge of services should always consult on the needs and wishes of patients when making decisions about community or hospital-based treatment. Indeed, 10,300 new patients with an early diagnosis of psychosis were engaged with early intervention in psychosis services this year, the largest number ever recorded.

A number of Adjournment debates in recent weeks have raised the issue of data on bed occupancy and the definitions on which they are based. I will not undertake to arrange a meeting, but I will undertake to ensure that work is done in the Department, which I will examine, to establish how well the data are collected and how clear they are.

[Dr Julian Lewis]

I am very satisfied with the Minister’s offer, but may I suggest that the Audit Commission—the only organisation that seems to produce reliable figures—has a chance to look at what we have discovered in our trusts? As I have said, the figures that are given to us are not reliable where I am, and, as I have heard tonight, they are not reliable where my hon. Friend the Member for Burton (Andrew Griffiths) is either.

[Paul Burstow]

I will certainly try to ensure that the data sets that we have are robust, although the future of the Audit Commission is perhaps a moot point in tonight’s debate.

Let me now deal with the local situation outlined by my hon. Friend the Member for Burton and, in particular, the proposals relating to the Margaret Stanhope centre. It is important to stress that the proposals are currently the subject of public consultation, notwithstanding some of the concerns about the process that have been outlined.

[Andrew Griffiths]

I thank the Minister for speaking so well about our concerns, but we have little faith in the PCT and the way in which it has conducted itself in this consultation. A rumour is gathering pace in my constituency and locally that the PCT is now going to extend the consultation period past next month’s closing date, for perhaps another three or six months. I and many of my constituents believe that would be a cynical attempt to buy time in order for the furore to die down so that the PCT can plough on regardless of public opinion. Does the Minister agree that as all the facts are now on the record, the PCT must make a decision on the facts as presented and the time scale as already laid out?

[Paul Burstow]

I will certainly give some further consideration to that. I am not sure that I am in a position to give my hon. Friend the undertaking he wants tonight, but if new issues arise it is in the public interest to make sure they are properly understood. My hon. Friend has rehearsed a number of the key issues this evening, and although he is right that consideration is being given to extending the consultation period, that is not for quite as long, as he suggested. I believe the PCT has decided to extend it by three to four weeks. It must do that, as the public and my hon. Friend must have confidence in the process. I am sure that he will understand that in responding tonight what I cannot, will not and must not do is come down on one side or the other on the options being canvassed in the consultation or express a preference as to its outcome. As he will know, there are clear requirements in law in respect of significant service changes that ultimately allow for reference to the Secretary of State, and I must avoid fettering the discretion the Secretary of State might in due course have to exercise.

Staffordshire Local Involvement Network—the LINk—is overseeing this consultation, and it has facilitated sessions after the presentations at public meetings. It has not involved anyone from either the PCT or South Staffordshire and Shropshire Healthcare NHS Foundation Trust. The LINk will also oversee the analysis of the consultation, to ensure its results are presented objectively. There is an independent element, therefore. I hope that goes some way towards reassuring my hon. Friends who have spoken tonight.

Travel has been mentioned in passing, and it is an important issue. When PCTs and service providers consult on service reconfigurations of this sort they must properly consider travel times, distances and journeys. I am pleased to note that, certainly in terms of the environmental impact assessment, those matters have been brought into play, although I await to see from the outcome of the consultation whether they have been sufficiently brought into play.

The local NHS would say that the consultation is about the future direction of in-patient services in the area and further strengthening community services. We must remember that this consultation is not only relevant to mental health in-patient services in Burton, but that it covers Tamworth and Stafford as well.

Although the concerns raised tonight have rightly focused on the Margaret Stanhope Centre, the important wider issue of improving community mental health services must be kept in mind. That is why I come back to the concern about the impact of reducing the number of beds available in the area. There is a dispute between the NHS locally and my hon. Friend about whether that will retard local services’ ability to meet legitimate needs, or whether more investment in community services will meet those needs.

This has been an important debate because it has allowed my hon. Friend to set out clearly and cogently his concerns. The consultation is not yet concluded and there will now be some additional weeks in which further views can be gathered. Clearly, the campaign being run by the Burton Mail, with the support of many of my hon. Friend’s constituents, will be a factor that the PCT will need to take into account when making its decisions. I am sure that the health overview and scrutiny committee will also want to be satisfied when it draws its conclusions about whether the results of the consultation are safe and sound, and whether it supports a model that does posit the notion that there are many mental health circumstances where the mental health needs are better and more appropriately met in the community, although there is also a need to ensure that there is always a robust in-patient response where that is necessary.

With that, may I take the opportunity to wish you and others in this Chamber the compliments of the season, Mr Speaker? I thank my hon. Friend for raising these matters and I will come back to him on any details that I have not addressed this evening.

[Mr Speaker]

I thank the Minister for his good wishes, and they are warmly reciprocated.

Question put and agreed to.

22:30

House adjourned.

Petitions

Monday 19th December 2011 Petitions

Monday 19 December 2011

Movement of Permanent Secretaries in Anguilla

Monday 19th December 2011 Petitions

The Petition of members of the Anguillan community resident in the UK,

Declares that the Petitioners oppose the transfer of Permanent Secretaries in Anguilla at such a time when the Anguillan economy is struggling, and that the Petitioners believe that it is essential that the expert Permanent Secretaries in Anguilla stay in their posts in order to meet the demands of the Foreign and Commonwealth office to balance the budget by 2013.

The Petitioners therefore request that the House of Commons urges the Government to ask the Governor of Anguilla to ensure that current Anguillan Permanent Secretaries remain in their posts.

And the Petitioners remain, etc.

[P000995]

Blaydon Races 150th Anniversary

Monday 19th December 2011 Petitions

The Humble Petition of the organising group of the Blaydon Races 150th Anniversary Campaign, namely Mr Steven Campion, Mr David Minikin, Mr Aidan Oswell, Mrs Lisa Christer Ovenden, Mr Andrew Ridley and Mr Anthony Pearson,

Sheweth,

that the Petitioners are campaigning to encourage all those who cherish the history, culture and traditions of their beloved Tyneside to celebrate the 150th anniversary of Mr George Ridley’s famous Blaydon Races anthem in June 2012.

Wherefore your Petitioners pray that your Honourable House will urge the Government to actively encourage the local authorities of Gateshead and Newcastle upon Tyne to work together to co-ordinate a properly-scaled programme of appropriate celebrations.

And your Petitioners, as in duty bound, will ever pray, &c.—[Presented by Chi Onwurah, Official Report, 9 November 2011; Vol. 535, c. 410.]

[P000979]

Observations from the Secretary of State for Culture, Media and Sport:

The Government are wholly committed to arts and culture and Ministers are determined to do everything they can to support cultural activity, across all the regions of England. Central Government funding for the arts comes primarily through Arts Council England (ACE), which makes funding decisions at arm’s length from Government. Ultimately it is for organisations like ACE, or for local authorities such as Newcastle or Gateshead Council to make funding decisions based on the needs and priorities of the local area as they know the needs of their area better than central Government.

Written Ministerial Statements

Monday 19th December 2011 Written Statements

Monday 19 December 2011

Red Diesel

Monday 19th December 2011 Written Statements

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I am today announcing that, following an internal review of the use of rebated fuel or “red diesel” for community and charitable activities in rural areas, HMRC is launching a formal consultation exercise on extending the use of red diesel to allow tractors to grit roads in rural communities.

HMRC’s review examined the scope for extending the use of red diesel by farmers to allow them to undertake a range of community-based activities, including allowing farmers to use their tractors to undertake gritting in rural communities. Following an informal consultation exercise, HMRC will now consult formally on permanent changes to the Hydrocarbon Oil Duties Act 1979 to allow farmers to use their tractors to grit roads in rural areas.

This change builds on HMRC’s temporary relaxation of its enforcement procedures during the last two severe winters, and will provide much-needed support to rural communities that are often too remote to benefit from municipal gritting activities and may find themselves cut off during periods of extreme weather. While the consultation is carried out, HMRC will continue to stand ready to temporarily relax enforcement procedures in the event of severe weather this winter.

For other community activities, the review concluded that it would not be possible to extend the use of red diesel to accommodate other community activities in a way that would be consistent with EU legislation (Directive 2003/96—the energy products directive).

However, the Government are clear that HMRC should take a pragmatic approach when farmers undertake community activities. To reinforce this approach further, HMRC intends to issue revised guidance to remind its officers that a degree of common sense should be used when dealing with these types of cases. If there is sufficient evidence to suggest someone has mistakenly breached the rules governing the use of red diesel, a warning should normally be given. The Government also recognise that the best way to minimise instances of mistaken use of red diesel is to increase awareness. To assist farming communities to comply with the law, HMRC will also refresh its internet guidance on the use of red diesel for grass cutting, to remove any confusion that may exist.

HMRC will launch the formal consultation exercise on its website early in the new year.

Local Government Finance

Monday 19th December 2011 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Later today, I am introducing legislation which will take forward proposals designed to encourage local economic growth, reduce the financial deficit, we have inherited from the last Administration, promote welfare reform and drive decentralisation of control over local government finance.

The Local Government Finance Bill will take forward key proposals which were considered as part of the local government resource review and announced in the spending review 2010. The local government finance system that we inherited from the last Administration is one of the most complex and centralised in the world. These reforms will address this, and increase transparency over the local finance system.

The Local Government Finance Bill will take forward our commitment to introduce a local business rates retention scheme which will enable local authorities to retain a proportion of the business rates generated in their area.

Today, I have published the Government response to the consultation on business rates retention which sought views over the summer on how a rate retention scheme would operate. The response puts forward a strong scheme that I believe will provide a strong financial incentive for local authorities to grow their local economies with the necessary safeguards to ensure authorities with high need and low tax bases are still able to meet the needs of their areas. These reforms will also provide local authorities with the framework to implement tax increment financing. Businesses will see no difference in the way they pay business rates or the way that they are set. Local charities, voluntary groups and small businesses will continue to be eligible for the same reliefs.

These reforms will boost local firms and local jobs as councils are given more autonomy over their own financial circumstances, and rewarded for building stronger relationships with business to strengthen the local economy. They have the potential to increase the aggregate income from business rates, compared to the status quo, due to greater enterprise and economic growth.

The Bill will also enable local authorities in England to set up local schemes of support for council tax, replacing council tax benefit. This will give local authorities the flexibility to design schemes which reflect local priorities, giving them a greater financial stake in the economic future of their area and enabling them to deliver a saving of 10% on the current council tax benefit expenditure bill. This saving is an important contribution to Government’s vital deficit reduction programme.

The new system will be a fairer one, where taxpayers can be more confident that the spiralling benefits bill is controlled and where work pays. Councils will be much better placed to attract new business and industry, better placed to help their residents get off welfare and reap the benefits of work instead. They will directly benefit from improving the prosperity of the local area that will in turn drive down the costs of offering support with council tax.

I have today published the Government’s response to the recent consultation on localising support for council tax, setting out the Government’s policy and how we plan to support local authorities in implementing schemes in their areas.

Local authorities will have much greater freedom to administer rebates in a way that best meets local needs and best supports local people while safeguards will be put in place to protect pensioners from any reduction in the support that is on offer as a result of the introduction of this reform.

Subject to consultation, the Bill will propose changes to council tax rules to provide further flexibility on the council tax local authorities can charge on empty properties, and other small changes aimed at modernising the system. By treating everyone equally and fairly and removing the special tax breaks for empty homes and second homes, councils have the potential to cut £20 a year off families’ council tax bills.

I intend to continue to work closely with local authorities, representative groups and other key parties in the design of the framework to be set out in secondary legislation, and welcome the excellent contribution I know they will make to the ongoing development and implementation of these proposals.

These proposals on council tax stand alongside the Government’s two-year council tax freeze, the cancellation of a council tax revaluation, the abolition of new bin taxes on family homes and new rights for local residents to veto excessive council tax rises.

These reforms also complement a wide package of financial measures that the Government are pursuing to support local authorities and local economies. These measures include over £430 million of funding under new homes bonus, up to £1 billion in community infrastructure levy, access to the £2.4 billion regional growth fund and £500 million growing places fund through local enterprise partnerships.

Positive for Youth

Monday 19th December 2011 Written Statements

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

Young people matter. They are important to us now, and to our future, and we need them to flourish. Now more than ever we need to engage young people and support them to face economic challenges and tackle negative stereotypes.

Published today, “Positive for Youth” is a new approach to cross-Government policy for young people aged 13-19 in England. It brings together a range of the Government’s policies for this age group across the interests of at least nine Departments. It has been produced with young people and youth professionals through extensive collaboration and consultation.

“Positive for Youth” sets out a shared vision for how all parts of society—including councils, schools, charities, businesses—can work together in partnership to support families and improve outcomes for young people, particularly those who are most disadvantaged or vulnerable. This means working towards a common goal of all young people having a strong sense of belonging, and the supportive relationships, strong ambitions, and good opportunities they need to realise their potential.

Parents and families have the primary responsibility for helping young people succeed. They need to be supported and any services to young people need to take them into account. Communities, including businesses, also need to take responsibility for helping young people belong and succeed.

Raising young people’s aspirations and educational attainment is crucial to their success in life. The Government have already announced significant reforms and investment to improve education standards and increase young people’s participation in learning and work. Young people’s experiences outside the classroom at home and in their community are also crucial to helping them form and pursue their ambitions. “Positive for Youth” emphasises the importance of young people’s personal and social development to educational, employment, and other long-term outcomes—and the role of services such as youth work in supporting this development. It promotes early intervention to address issues young people may face to prevent them escalating and causing harm.

Councils are accountable primarily to local people for how well young people do, and how well their services support them. Young people must be in the driving seat to inform decisions, shape provision, and inspect quality.

The Government are taking a wide range of actions to facilitate local reform, including:

clarifying their expectations on local authorities through revised statutory guidance to be published shortly for consultation on their duty to secure activities and services for young people;

empowering young people by enabling them to inspect and report on local youth services and setting up a national scrutiny group for them to help “youth proof “ Government policy as part of funding of £850,000 to the British Youth Council in 2011-2013;

funding improved business brokerage with projects for young people through investment of £320,000 to April 2013;

providing capital investment to complete 63 myplace centres by April 2013, and developing a national approach to exploiting their potential to be autonomous hubs led by communities and businesses for transforming local services;

expanding national citizen service to offer 30,000 places to young people In 2012, 60,000 in 2013, and 90,000 in 2014.

The Government will publish annually national measures of young people’s positive outcomes, and an audit at the end of 2012 of overall progress towards creating a society which is more positive for youth.

“Positive for Youth” and an executive summary are available on the Department for Education website at www.education.gov.uk/positiveforyouth. Copies of “Positive for Youth” have also been placed in the Libraries of both Houses.

National Curriculum in England (Review)

Monday 19th December 2011 Written Statements

[The Secretary of State for Education (Michael Gove)]

Over the past year the review of the national curriculum in England has been looking at curricula in the highest-performing, and fastest-improving, jurisdictions internationally. Today I am publishing a set of initial findings and recommendations.

The review team’s work has uncovered a consistent theme: these high-performing jurisdictions set materially higher expectations in terms of what they believe children can and should master at different ages. This comes as no surprise. Over the past 10 years our education system as measured by performance in the OECD’s PISA international league tables has deteriorated significantly. If our schools, and young people, are to become internationally competitive again we must learn from the best in the world.

The recommendations made by the review’s expert panel set out the scale of the challenge we face, and raise fundamental questions about educational practice in this country. For example:

The expert panel recommend that we learn from the approach to assessment and pupil progression used in many high-performing jurisdictions, including the most successful south-east Asian education systems, which ensure that every pupil has mastered the subject content before the class moves on to tackle the next part of the curriculum. They express concern that our existing assessment model assumes that a certain proportion of young people will never be able to master crucial curriculum content, leading to an unjustified lowering of expectations.

The international evidence shows that all successful jurisdictions expect pupils to study a broad curriculum to 16, built around a core of academic subjects. The expert panel argue that England narrows its curriculum for the majority of pupils too early.

The evidence identifies the higher expectations of pupils in maths, English and science in high-performing jurisdictions. For example,

In Singapore, pupils are expected to know all their times tables and related division facts by the end of year 4; here our national expectation is at year 6.

Pupils in Singapore are also expected to learn about plant and animal cells in year 6, including how cell division forms the basis of growth, while we leave this until secondary.

All high-performing jurisdictions—like Singapore, the Canadian province of Alberta and the US state of Massachusetts—have a separate section on grammar in their curricula with clear standards which must be met.

Poland, a fast-improving education system, has high expectations in their recommended reading, including Homer, Chekhov and Shakespeare alongside great works of Polish literature.

The panel also recommend that we should look again at the “key stage” structure of the curriculum which they argue can lead to a lack of pace and ambition at key points in pupil’s education.

It would, of course, be wrong to conclude that England should simply import systems used in other countries wholesale. But it is absolutely clear that these findings challenge fundamental tenets of our current system.

The expert panel also raise crucial questions about the complex interaction between curriculum and qualifications in secondary schools. Evidence shows that what is taught is determined as much, if not more, by examinations as by the national curriculum. This means we need to consider GCSE reform alongside the development of the new curriculum.

As the recent revelations in the Daily Telegraph have confirmed, far-reaching reform to our examinations system is vital—and must be considered in parallel with changes to the secondary curriculum. While immediate action is needed to deal with the improper practices that have been revealed, we need also to take the opportunity to ensure that deep-seated problems with how GCSEs have been developed and delivered can be addressed. We must ensure that qualifications support excellent teaching that develops in pupils a broad and deep understanding of the subject.

In light of the far-reaching and complex nature of the expert panel recommendations, and to allow for more radical reform of both curriculum and qualifications, I have decided to change the planned timetable for the introduction of the new national curriculum. Instead of new curricula for English, mathematics, science and PE being introduced from 2013, and the remainder in 2014, the new curriculum for all subjects will be introduced in 2014.

The longer time scale will allow for further debate with everyone interested in creating a genuinely world-class education system; teachers, governors, academics, business leaders and parents, as well as giving schools more time to prepare for a radically different and more rigorous approach.

A detailed timetable for the conduct of the remainder of the review, as well as a refreshed remit, will be published in the new year and copies will be placed in the Library of the House.

Alongside this statement I am publishing a suite of documents which, taken together, provide a summary of the findings to date of the review. This suite includes:

The report of the review’s expert panel setting out their recommendations in relation to the framework for the new national curriculum;

A summary of the evidence gathered about curricula for English, mathematics and science in high-performing jurisdictions;

A research report that looks at subject breadth in the curricula used in other education jurisdictions; and

A summary report of the responses to the review’s call for evidence.



A copy of each of these documents has been placed in the Library of the House.

Flood Risk Management

Monday 19th December 2011 Written Statements

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I am today publishing a report following the three flood insurance working groups established in 2010. The working groups were made up of representatives from Government, the insurance industry and community groups. Building on their conclusions, the Economic Secretary to the Treasury and I have agreed to sponsor further work to analyse the options for managing the future financial risks of flooding.

Government and the insurance industry remain committed to making sure flood insurance remains widely available. Together we are working towards an announcement in the spring of a new shared understanding which sets out more clearly what customers can expect from their insurer, and from Government.

The existing statement of principles currently enables insurers to price according to risk. Risk-based pricing has not been commonly applied in the past because of a range of factors including commercial decisions by individual insurers and historic limitations in the availability of flood risk information. However, the market is evolving with the development of more sophisticated tools for assessing a customer’s flood risk with the reality being a continuing trend towards more risk-based pricing.

Taking steps to reduce flood risk, whether by Government, local communities or individuals, minimises damage occurring in the first place and thereby plays a vital role in bearing down on insurance costs. In accordance with this Government’s determination to deliver solutions which offer taxpayers greatest value for money and which will endure over the long-term, the priority will continue to be to invest in reducing the risk of people and properties being flooded in the first place, rather than re-directing funds into subsidising insurance premiums, which would do nothing to protect against the wider, non-monetary, health and well-being impacts of flooding.

Hence we propose to:

Continue to target Government funding towards those most at risk and living in the most deprived areas through flood and coastal resilience partnership funding launched in May of this year. There is already progress: 36% of households protected by new flood alleviation schemes proposed for 2012-13 are at significant risk and in the most deprived communities, compared with 6% during the previous spending period. Overall, the Government plan to invest £2.17 billion on flood and coastal erosion risk management in England over the current spending review period.

Continue to improve the quality and availability of flood risk maps published by the Environment Agency including surface water flooding maps, so that individuals and communities can be more aware of levels of local flood risk and better informed about what action could be taken at an appropriate level to provide better protection.

Continue to extend the flood warnings service so that by 2015 at least two thirds of households and businesses in the highest risk areas are signed up to receive the floodline warnings direct service.

Explore with the insurance industry how to create an environment where those at risk are incentivised and supported to proactively reduce flood risk with the consequent effect being seen in their long-term insurance costs.

Over the next few months we will continue to work with insurance companies to consider what additional measures might help safeguard the affordability of flood insurance for households. As part of this ongoing work we will be considering the feasibility, value for money and deliverability of targeting funds to help those most in need, building on the analysis undertaken by the working groups established after last year’s flood summit. This may include models where communities might work together to secure affordable insurance.

These options will be considered over the winter months in order to make further announcements in the spring. However, in the interests of keeping the Members and their constituents abreast of these ongoing discussions I wanted to give this interim update.

Copies of the report of the flood insurance working groups are available on the DEFRA website.

Afghanistan

Monday 19th December 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 12th progress report on developments in Afghanistan since November 2010.

The second tranche of areas to enter the security transition process was announced on 27 November. This demonstrates continuing progress in the development of the Afghan National Security Forces (ANSF). The announcement, which includes Nad-e-Ali in Helmand, means that Afghan forces will soon begin to take lead responsibility for the security of approximately half the country’s population. While the security situation throughout Afghanistan remains challenging, progress is being made. The ANSF have demonstrated that they are able to lead on security effectively and competently in the areas that started the transition process earlier this year. They also demonstrated their growing capability at November’s traditional Loya Jirga where, despite insurgent intent, there were no security breaches.

The IMF board has approved a new three-year programme of support for Afghanistan. This decision shows that the Afghan Government have reassured international donors and ordinary Afghans alike that they are serious about providing a safe economic and business environment. Now that a new IMF programme is in place, donors including the UK are able to resume support to the Afghanistan Reconstruction Trust Fund, which helps the Afghan Government deliver vital basic services and key reforms for the Afghan people. In the meantime, with UK support the Afghan Government continue to make good progress in raising their own funds: revenue collection reached record levels last quarter.

The international conference on Afghanistan in Bonn on 5 December agreed a framework for the international community’s long-term engagement with Afghanistan to 2014 and beyond and agreed to produce a clear plan for funding the ANSF in advance of the Chicago conference to be held in May 2012.

At the traditional Loya Jirga, President Karzai reiterated his commitment to stand down as president in 2014, in accordance with the constitution.

I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).

Control Orders

Monday 19th December 2011 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

Section 14(1) of the Prevention of Terrorism Act 2005 (the 2005 Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of the control order powers during that period. Paragraph 5 of schedule 8 to the Terrorism Prevention and Investigation Measures Act 2011 (the 2011 Act) requires the Secretary of State to report to Parliament covering the period that begins immediately after the end of the last three-month period and ends immediately before commencement.

The level of information provided will always be subject to slight variations based on operational advice. This report covers both reporting periods.

The transition to TPIMs

The 2011 Act commenced on 15 December 2011. A copy of the Act can be found on Parliament’s website. The home page for the Act is:

www.legislation.gov.uk/ukpga/2011/23/contents/enacted.

The 2005 Act has now been repealed but the control orders in force at the time of commencement of the 2011 Act will remain in effect for a 42-day transitional period concluding on 25 January 2012 unless revoked before then. This is to allow for an orderly, managed and—above all—safe transition to the new system.

The exercise of the control order powers in the relevant periods

As explained in previous quarterly statements, control order obligations are tailored to the individual concerned and are based on the terrorism-related risk that individual poses. Each control order is kept under regular review to ensure that the obligations remain necessary and proportionate. The Home Office continues to hold Control Order Review Groups (CORGs) every quarter, with representation from law enforcement and intelligence agencies, to keep the obligations in every control order under regular and formal review and to facilitate a review of appropriate exit strategies. During the reporting periods, two CORGs were held in relation to the control orders in force at the time. Other meetings were held on an ad hoc basis as specific issues arose.

During the period 11 September 2011 to 10 December 2011, no non-derogating control orders were made or served. Two control orders were revoked during this period and two control orders have been renewed in accordance with section 2(6) of the 2005 Act. No non-derogating control orders were made, served, revoked or renewed during the period 11 December 2011 to 14 December 2011.

In total, as of 10 and 14 December, there were nine control orders in force, all of which were in respect of British citizens. All of these control orders were non-derogating.

Two individuals were charged with breaching their control order obligations during this period. One further individual was acquitted of two counts of breaching a control order; the jury failed to return a verdict on the remaining 13 counts against the same individual.

During the period 11 September 2011 to 10 December 2011, 76 modifications of control order obligations were made. Nineteen requests to modify control order obligations were refused. No further modifications were made or requests refused during the period 11 December 2011 to 14 December 2011.

Section 10(1) of the 2005 Act provides a right of appeal against a decision by the Secretary of State to renew a non-derogating control order or to modify an obligation imposed by a non-derogating control order without consent. Two appeals have been lodged with the High Court during this reporting period under section 10(1). A right of appeal is also provided by section 10(3) of the 2005 Act against a decision by the Secretary of State to refuse a request by a controlled person to revoke their order or to modify any obligation under their order. During this reporting period one appeal was lodged with the High Court under section 10(3), and then withdrawn.

One judgment has been handed down by the High Court during this reporting period in relation to a control order case.

On 3 October 2011, the High Court handed down a judgment in relation to five appeals brought by a controlled individual under section 10(3) of the 2005 Act. In AM v. Secretary of State for the Home Department [2011] EWHC 2486 (Admin) the High Court upheld the Secretary of State’s decisions.

Most open judgments are available at http://www.bailii.org/.

Draft Parliamentary Privilege Bill

Monday 19th December 2011 Written Statements

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

The Leader of the House of Lords and I are today setting out the next steps in the Government’s preparation of a draft Bill on parliamentary privilege.

The Programme for Government announced our intention to

“prevent the possible misuse of parliamentary privilege by MPs accused of serious wrongdoing”.

Following this, the Queen’s Speech set out that we would publish a draft Bill during this Session on parliamentary privilege. I can now announce that the Government intend to publish a Green Paper alongside the draft Bill. The Green Paper and draft Bill will be published before the end of this parliamentary Session.

In the Green Paper, the Government will consult on the desirability of certain changes that could be made to the operation of parliamentary privilege. In that Green Paper, we intend to set out the Government’s thinking on each of the principal areas where it has previously been suggested that reform is necessary or desirable. Where we believe there is a case to be made for legislative change, this thinking will be supported by clauses in the draft Bill.

In line with the commitment in the coalition agreement, the Government are considering whether there are potential obstacles that ought to be removed to the prosecution of Members of either House for ordinary criminal acts. This is notwithstanding the Supreme Court ruling in R v Chaytor and others, which established that the criminal courts did have jurisdiction over dishonest claims for allowances, as these were not proceedings in Parliament under article 9 of the Bill of Rights 1689, and did not fall within the exclusive jurisdiction of the two Houses.

The Green Paper will also discuss, among other questions:

whether legislation is necessary or desirable to ensure that the powers of Select Committees can be satisfactorily enforced;

whether legislation is desirable to establish that the principle of exclusive cognisance applies only to activities directly and closely related to proceedings in Parliament;

whether a statutory definition of proceedings in Parliament is needed; and

whether there should be changes to the law on reporting of parliamentary proceedings in the media.

The Government will not be proposing to constrain by legislation the ability of hon. Members to name in proceedings in Parliament individuals who are the subject of anonymity injunctions made by the courts. It will be for each House to consider whether to make changes to their internal procedures to address this issue.

In setting out their views, the Government will be mindful of the views previously expressed by a number of Select Committees, including the 1998-99 Joint Committee on Parliamentary Privilege, the Committee on Standards and Privileges, the 2009-10 Select Committee on the Issue of Privilege, the Joint Committees on the draft Corruption, Bribery and Defamation Bills, the House of Commons Procedure Committee, the Justice Committee and the Culture, Media and Sport Committee. The Government also wish to take into account any proposals from the Joint Committee on Privacy and Injunctions that impinge on parliamentary privilege.

Following correspondence earlier this year with the chairs of the Liaison Committees in both Houses, the Government believe it would be appropriate for the Green Paper to be considered, and for the draft Bill to be subject to pre-legislative scrutiny, by a Joint Committee, and will be holding early discussions in both Houses about the establishment of and timetable for such a Committee.

Northern Ireland (National Security Matters)

Monday 19th December 2011 Written Statements

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

The Government have received and welcomed a report from Lord Carlile of Berriew on the operation of arrangements for handling national security matters in Northern Ireland for the year to date.

Lord Carlile commends the engagement he received in producing this report which recognises that the context in which national security activities are performed in Northern Ireland is changing and challenging.

The report points out that there have been serious incidents during 2011, including the murder of PC Ronan Kerr in Omagh in April and states that the overall picture is of a very dangerous, unpredictable terrorist threat. The situation is faced with additional challenges due to the many connections which terrorists appear to have with organised crime. Lord Carlile points out that organised crime is an area which helps fund their politically motivated activities.

Lord Carlile believes that, compared with last year, this year has seen more success in containing and stabilising the threat, and notes that there have been fewer incidents and fewer major attacks. He is also satisfied that there are no difficulties of any significance in the inter-operability between the PSNI and the Security Service and identifies this is a sound working partnership and one that is to be commended.

I welcome the content of this report and have made it available to the Home Secretary. Given its sensitive nature I do not, however, intend to place copies in the Library.

Child Support Management of Payments and Arrears Amendment Regulations 2012

Monday 19th December 2011 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

The Government are committed to tackling the legacy of £3.8 billion in child maintenance arrears owed by non-resident parents. They are determined to pursue every penny which can be collected, and the Child Support Agency is pursuing a range of initiatives and deploying its enforcement powers more effectively to pursue those parents who refuse to pay.

We have, however, to be mindful of the fact that not all of the arrears that are owed can realistically be collected; and indeed, not all arrears are actually wanted by the relevant parents with care.

I am therefore today publishing a consultation document on commencing powers contained within the Child Maintenance and Other Payments Act 2008 to write off arrears of child maintenance in certain, limited circumstances and to accept a part payment of child maintenance in full and final satisfaction of the total amount due.

The use of the write-off power is limited—by the 2008 Act—to circumstances where it would be “unfair or otherwise inappropriate” to collect or enforce the recovery of child maintenance.

The power to accept a part payment will enable a non-resident parent to pay a proportion of the total amount due, with the full liability being treated as met. A part payment may only be accepted where the parent with care has given his or her express permission.

None of this undermines the Government’s determination to pursue those parents who refuse to live up to their responsibilities. The Government believe that failure to pay child maintenance must never be considered as an option.

The consultation document and draft regulations will be available on the Child Maintenance and Enforcement Commission (CMEC) and Department for Work and Pensions websites later today. A link to the CMEC website is attached below.

Copies of the consultation document will be placed in the Libraries of both Houses. http://www. childmaintenance.org/en/publications/consultations.html

House of Lords

Monday 19th December 2011 Lords Chamber

Monday, 19 December 2011.

11:00

Prayers—read by the Lord Bishop of Birmingham.

Health and Social Care Bill

Monday 19th December 2011 Lords Chamber

Committee (14th Day)

11:05

Relevant documents: 19th report from the Delegated Powers Committee, 18th report from the Constitution Committee.

Clause 187 : Scrutiny functions of local authorities

Amendment 327ZC

Moved by

[Earl Howe]

327ZC: Clause 187, page 188, line 15, at end insert—
“( ) In subsection (5), for “this section, section 245 and section 246” substitute “this section and section 245”.”

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, unusually, it falls to me to introduce this group of amendments. In moving Amendment 327ZC and speaking to Amendments 327ZD, 327ZE, 327ZF and 327ZG, I confine myself to saying that these are minor technical amendments to Clauses 187 and 188. For the most part, they ensure consistency between the scrutiny provisions in the Bill and in the Localism Act. I hope that they will receive the support of the Committee. I beg to move.

[Baroness Massey of Darwen]

My Lords, I speak to Amendments 330, 333 and 334 in this group. I draw attention to issues important for strengthening integrated working in children’s health and well-being. Of course, integration is important for all consumers of health, but services for children have often been fragmented and disconnected, sometimes with tragic results, as we all know. I spoke last week about the importance of listening to the voice of the child. If children had a voice, they would say—as they do when we speak to them—that integration of services is not good in many areas. It should be, for effectiveness and efficiency.

My amendments require all health and well-being boards to promote close, integrated working between health, social care, and health-related services in their area. Specifically, Amendment 330 requires that they “must,” rather than “may”, include in their joint health and well-being strategy,

“a statement of their views on how arrangements for the provision of health-related services in the area of the local authority could be more closely integrated with arrangements for the provision of health services and social care services in that area”.

Amendment 333 requires, again, that they “must,” rather than “may”,

“encourage persons who arrange for the provision of any health-related services in its area to work closely with the Health and Wellbeing Board”.

Amendment 334 requires that they “must,” rather than “may”,

“encourage persons who arrange for the provision of any health or social care services in its area … to work closely together”.

As the Bill stands, health and well-being boards’ role in bringing health and social care together with health-related services is optional. The National Children’s Bureau and its Every Disabled Child Matters campaign believe this role must be strengthened so that there is a clear duty on all health and well-being boards to promote joined-up commissioning and delivery of services in their area. This is particularly important for children and young people for three key reasons. One reason is that joint working across local agencies is crucial for children’s and young people’s health and well-being. Integrated planning is particularly important for children and young people, for whom some of the most effective interventions are those delivered through non-health settings and services, such as schools and colleges, children’s centres, and youth services. For example, the national evaluation of Sure Start found that a child with access to a children’s centre—formerly Sure Start local programmes—had more immunisations and fewer accidents than young children living in other areas. School health initiatives can have a positive impact on pupils’ health and behaviour—I am thinking of health-promoting schools, for example.

However, evidence suggests that health, social care, education, early childhood, youth and other services are not always working in partnership to secure good outcomes for children and young people. The Marmot review identified the lack of consistent partnership working between such bodies as the barrier to delivering services that reduce health inequalities. Similarly, the Kennedy review highlighted the fact that the requisite links between the NHS, social care, education and criminal justice services to support juvenile people are not always made. His report recommended that local partnerships covering all services for children should have,

“a duty to ensure that local organisations work together”.

Close working between local partners is particularly vital for children with complex needs, such as disabled children or looked-after children, who need co-ordinated interventions from a range of services. A recent report from the Every Disabled Child Matters campaign found that families of disabled children often report experiences of fragmented service delivery and have been caught between services that do not communicate well. One parent has said:

“As a parent, you just want a service, but it’s like health, education and social care are all separate and they don’t really like working together. What you need as a family is one system—not three”.

The Government have expressed aspirations for better partnership working across a broad range of children’s services. For example, Support and Aspiration, the special educational needs and disability Green Paper, states,

“we want to make it easier for professionals and services to work together, and we want to create the conditions that encourage innovative and collaborative ways of providing better support for children, young people and families”.

I believe that unless the Bill strengthens the framework for local integration, the ability of local areas to implement these aspirations will be undermined.

The Bill contains many key measures promoting joined-up working on health and social care, through relationships between local authorities and NHS commissioners. However, many of the services that promote the health of children and young people, such as schools and colleges, children’s centres and youth services, are or will be provided by bodies which are independent of the local authority or NHS. Health and well-being boards should have a mandatory and not an optional role in promoting the involvement of these health-related services in joined-up commissioning and delivery.

Schools need to be encouraged and enabled to play their part. Schools are key partners in securing the health and well-being of children. The public health White Paper, for example, recognises the role that schools can play, stating that:

“Good schools will be active promoters of health in childhood and adolescence”.

This is crucial for reducing health inequalities. The Marmot review, again, recommends that schools should take a “whole child” approach and they will be unable to do this without routine engagement with partners from other agencies.

Over 1 million children and young people now attend academies, which are independent of local authority oversight and will not be represented by health and well-being boards. According to the Department for Education, more than 40 per cent of all secondary schools are now open or are in the process of opening as academies. The Government have taken a step towards promoting joint working by dropping proposals in the Education Act to remove the duty to co-operate under the Children Act 2004. However, this Bill does not create the structural environment within which co-operation with education providers will be possible. Health and well-being boards have the potential to act as a forum for schools to fulfil this duty to co-operate. A clearer role for health and well-being boards in bringing a broader range of services together beyond health and social care, as provided by these amendments, should help to secure this.

Finally, health commissioners should be supported to meet their new duties on integration. Duties were introduced, following the listening exercise, for the NHS Commissioning Board, clinical commissioning groups and Monitor, whereby they are required to carry out their functions with a view to securing that the provision of health services is integrated with the provision of health-related services. As the Bill stands, the role of health and well-being boards in securing this integration remains an optional part of their remit and the scope of their local strategy. Health and well-being boards are expected to play a role in holding health commissioners to account for securing services that fulfil priorities set out in the joint health and well-being strategy. Furthermore, health commissioners will need a forum through which to drive forward better joint working and integration with health-related services. Without a guarantee that health and well-being boards would prioritise encouraging this close working across health, social care and health-related services, there is a serious risk that health commissioners’ new integration duties will be ineffective.

I hope that, in this Bill, the Government will take note of issues which will affect children. I know that the noble Earl, Lord Howe, is listening and I hope that on Report we can reach some agreement on children’s health and well-being.

11:15

[Baroness Finlay of Llandaff]

My Lords, I speak to the amendment to which I have added my name in relation to children, but also speak to a raft of other amendments related to allied healthcare professions. Last week we had a debate about the need for the voice of children in the Bill to be strengthened. On reflecting on this and the debate that we had over other vulnerable groups, it struck me quite forcefully that children are the only group who do not have an independent voice en masse. In all other vulnerable groups, there will be a spectrum of people, some of whom can be outspoken and some who can be advocates for others, even among groups such as those with dementia, the very elderly and those who have come here to this country as asylum seekers. However, children under the age of 16 are completely dependent for consent and for other issues on those who have a legal parental role to act on their behalf and to consider their best interests.

We discussed last week the fragmented society in which some children are now brought up, and the difficulties that individual children face. We also discussed the need for health and social care services to reflect the needs of children. I urge the Minister, in looking at these amendments and those we debated before, to consider very carefully where our society will be heading if we do not strengthen the voice of children on the face of the Bill.

Amendment 330A, to which the noble Lord, Lord Low, has put his name and, I believe, will be speaking, will try to secure a change so that this Bill parallels the change in the Education Act.

I will now address my remarks to the need for representation and consultation of allied healthcare professionals, and in so doing declare my interest as president of the Chartered Society of Physiotherapy. Physiotherapists are the largest part of the allied health professions’ workforce. The Bill needs to state that allied health professions as a group are consulted, because there is, sadly, great ignorance in medicine and nursing as to the full range of professional services that allied healthcare professionals can contribute. They contribute right across the range; innovative models of service provision now being developed are able to free up medical and nursing time and decrease the number of interventions needed, particularly on aspects such as orthopaedic surgery, where physiotherapists are running clinics and are able to intervene and completely obviate the need for some patients to progress to surgery.

Allied health professionals by and large, and physiotherapists in particular, are focused on re-enablement; on keeping people healthy; working with the parts of them that are healthy and helping them cope with the parts that are not; on preventing absence from work and avoiding unnecessary hospital admissions and unnecessary interventions. We are already hearing of delayed discharges from hospital. The Health Service Journal of 27 October this year had a piece on this. Patients are having to wait for care packages, including physiotherapy services, that could enable them to be cared for in their own homes. Without the allied healthcare professional voice being involved at senior-level commissioning, acute services will not be joined up in the community, and that leads to fragmented care for patients and poorer health outcomes. Care in the community setting is viewed as key to the Government’s efficiency savings in relation to hospital admissions. Allied healthcare professionals enable patients to take control of their own care and resume living in their own homes, empowering them and easing the burden on front-line services. There are a whole group of amendments in my name which list allied healthcare professionals. I hope that the Government will look favourably on these.

[Baroness Greengross]

My Lords, my Amendment 332A follows well from the previous two speakers. It would ensure that integrated working in health and social care delivery—particularly the latter, which we know from many noble Lords who have spoken, including the noble Lord, Lord Warner, is often very much the junior partner in these discussions—is given an explicit place on the face of the Bill, rather than simply being relegated to regulations and guidelines. In his report on Fairer Care Funding, Andrew Dilnot commented that when someone has a care or support need, they do not really know which part of the range of state funding is going to provide the services that they need. This particularly applies to people with multiple needs and co-morbidities, which is often the majority. We know that there are many different services delivered at national and local level—for example, the NHS, the adult social care system, social security benefits, public health services and housing services. They can all be critical in meeting people’s needs. The problem is that all these elements overlap and interact, sometimes positively but sometimes rather negatively. Dilnot noted forcefully that when services that are shaped around people work well together, outcomes are better; when they do not, people experience very disjointed services and their experiences are poor.

We need a care system that is more consistent, with less variability, and one in which people feel that services are working for them, not against them. In this context, I welcome the Department of Health’s commitment to breaking down the barriers between health and social care to improve the outcomes and experience of users. Having a National Health Service that is free at the point of need, but a shared-responsibility system of social care, means that difficult decisions will continue to be made if this carries on. For example, in response to the Nicholson challenge, how will clinical commissioning groups ensure that the focus stays on the patient and on integration of services and not on contracting and other arrangements? Do we know what type of support managers need to make integrated services a reality? How can staff be encouraged to work collaboratively? Through this process, how can the correct values and ethos concerning the dignity and respect of patients, which we all believe in, be developed and maintained within and across organisations? There are many examples of where the consequences of having different care streams can seem extremely unfair to people. But when streams have been integrated or a more co-ordinated approach is taken, there is evidence of improved outcomes, high-quality services and better value for money, as well as the fostering of innovation. In my view, the powers proposed in Clause 192 for the health and well-being boards to support integrated working should be extended to encourage explicit joint commissioning.

In support for innovation in Part 5, greater regard should be given to the role that service and technology solutions, for example, can have in breaking down traditional boundaries and in encouraging better integration of health and social care services. All generations, including older people, are having their lives transformed by the dramatic changes that we daily witness in communications technology, yet in the UK the adoption of telehealth into health and social care, particularly in prevention and intervention, has sometimes been much slower than in many countries in the industrialised world. In other parts of the world, we have clear evidence of the key role that these systems play in the prevention of ill health, in self-management, in the provision of improved outcomes and in dependence for service users and efficiency savings for the taxpayer. As part of the overall redesign of care, this represents a vital element in the shift towards more preventive care, reducing the imbalance between hospital and primary care spend and making better use of scarce clinical resources. Better integration should facilitate such innovations and would go a long way to making health and social care more self-directed and giving a boost to the personalisation agenda. Integration deserves to be more than a footnote in this Bill. It could be the cornerstone of better quality, value for money and patient-centred care.

[Baroness Jolly]

I have put my name to Amendments 328B and 330ZAA. I send the apologies of the noble Baroness, Lady Tyler, who is not well. She had hoped to be able to speak to these instead of me. First, I should like to make a few general points about health and well-being boards. It should go without saying that the Liberal Democrats really welcome local democracy in health and the far greater involvement of local authorities than is the case at the moment, as well as the use of scrutiny committees. We are somewhat saddened that in the legislation there is only one elected decision-maker on a health and well-being board. I understand the Government’s unwillingness to prescribe, but they have not quite got the balance right. There may be as many elected councillors as other voting stakeholders, with maybe a casting vote given to the chair. That feels much more like localism in action than what we currently have.

Linked with that is the role of district councils, which is not mentioned terribly clearly. Here I have another apology, because I know that the noble Lord, Lord Greaves, had hoped to speak on this point. What we are losing in his eloquence we are probably making up for in brevity, but I still feel as strongly as I am sure he will. I can almost feel him behind me now, as I speak, but he is not well and is not able to be with us.

Where are district councils in this framework? I know that a lot of local authorities have now become unitary, but there are really key parts of England where strong county councils are well underpinned by district councils. They need to be there, because they provide planning, housing, leisure and environmental health—all these things that have to be well woven into the fabric of this Bill and the delivery of services. They are also part of the solution for the big public health issues. Three examples come to mind without even having to think very hard. Wearing their leisure hat, obesity is a very big issue. Some people prescribe exercise for obesity. On housing, in my neck of the woods, with the warm, wet westerlies, housing gets damp very easily. That brings with it chronic heart and lung problems, particularly if you cannot afford to heat. District councils also play a key role in housing on mental health issues. They are often providers for county councils and PCTs and I know that they would hope for a similar relationship with clinical commissioning groups, when things become established. They should be at the table of the health and well-being boards. I appreciate that you cannot have every district council having one representative. In Kent, where there are 16, or in Devon, where there are eight, you cannot bring those in, but there needs to be some arrangement for working together to ensure that district councils should be there.

11:30

My amendments relate to housing, in Clause 190 on joint health and well-being strategies. Their aim is to ensure that all health and social care needs are considered, alongside what might be called regular housing needs, in preparing planning strategies. Right up front, when councils are determining their planning, those few—or perhaps not so few—that do not have health on the list of things that they are considering should consider the impact that housing provision can make to health. Their planning strategies cover social housing, whether run by councils or outsourced, but housing should also play a role in putting together health and well-being strategies. It would be really good, where it does not currently happen, for the DPH to be working alongside planning departments to think about how this might pan out.

Housing associations have huge expertise to offer to health and well-being boards in planning for the elderly, the vulnerable and chaotic families. They see them and work with them. For the vulnerable and elderly, telecare, heating, dampness and appropriate aids are issues that have huge positive impact on health. They are currently not always seen in that context. They are seen as something that has to happen when these groups live in social housing, but they are not always necessarily seen as health-related, although they should be.

Earlier in the Committee we moved a couple of amendments that were aimed at strengthening health and well-being boards’ and clinical commissioning groups’ thoughts around children, so I really welcome the amendment of the noble Baroness, Lady Massey. I would be grateful if my noble friend the Minister could give the Committee some clarity on democratic representation—adding councillors to health and well-being boards, but also ensuring that there is explicit district council representation on the board—and on the involvement of planning departments and social housing providers in producing health and social care plans.

[Baroness Wilkins]

My Lords, I fully support the amendment just spoken to by the noble Baroness, Lady Jolly, in relation to housing. I speak to Amendment 330A, which is down in my name and in those of the noble Baroness, Lady Finlay, and the noble Lord, Lord Low. It is a probing amendment to ask the Minister to ensure that education providers, including academies, schools and colleges, are represented on the health and well-being boards, in order that there should be integrated planning for disabled children. The National Children’s Bureau, through the Every Disabled Child Matters campaign, has raised concerns that the Bill does not provide equivalency with the Education Act, which has retained the duty to co-operate for schools. This Bill does not ensure that schools will be an integral part of the health and well-being boards, so, while education providers will have a clear duty to co-operate, there would be no equivalent duty on health and well-being boards to include education providers.

Integrated planning and commissioning is particularly vital for children with complex needs, such as disabled and looked-after children, who need co-ordinated interventions from a range of services. Many disabled children require health-related services at school, including physiotherapy, occupational therapy and speech and language therapy, as well as specific medical interventions. There are often problems with providing such services on the school site, or it is not properly co-ordinated with other activities at the school. As Adam, one young disabled person, said,

“I went to a mainstream secondary school. I did not get to see a physio or OT regularly. This is because I didn’t go to a special school for disabled people. I think health, education and social services need to work more closely together”.

This lack of co-ordination of support presents disabled children and young people with barriers to participation in education that their peers would take for granted. As Sir Ian Kennedy’s recent report, Getting it Right for Children and Young People, recognised:

“If children do not receive appropriate support from the school, at worst those with severe health problems receive a ‘double whammy’ as their ill-health damages their education by disrupting their schooling, either through being forced to stay at home or by long stays in hospital. Children with severe or long-term conditions receive enormous benefit from continuing their education during their treatment. And there are social as well as educational benefits. Continuing in education is a signal, to the child themselves, the parents or carers and the peer group, that a child with a severe or complex health condition continues to belong to the ‘community of children’ and does not become defined by their condition”.

When education providers and health services do not collaborate to meet the needs of children and young people, it also has a significant impact on their families. A study by Diabetes UK found, for example, that half—46 per cent—of primary school pupils with type 1 diabetes and one-third—29 per cent—of their secondary school counterparts report that their parents have had to reduce hours or give up work to help them administer life-saving insulin injections. It is clear that when children need such support during school hours, local services should work together to ensure that it is available.

As the Minister will know, the Department for Education’s recent Green Paper, Support and Aspiration: A New Approach to Special Educational Needs and Disability, proposed a more co-ordinated approach to the delivery of education, health and social care. These proposals included the delivery of a single assessment process, a joint education, health and care plan, and a local offer, which sets out all services available to disabled children in the area. EDCM is concerned that these proposals will not be deliverable if education providers, including academy schools and colleges, are not given a presence and a voice at health and well-being board level, which this amendment would provide.

[Lord Ramsbotham]

My Lords, I rise to speak to my amendment, Amendment 330C, which relates to the fact that offender health is a public health—particularly prison health—issue. Since almost every prisoner will be released, their mental and physical state when they are is therefore a matter of public interest. I wish to speak to something related to imprisonment, rather than to imprisonment itself. There are two other activities associated with this part of the Bill which also affect activities of other ministries, the Ministry of Justice and of course the Home Office, to which I would like to draw attention.

As we all know, prisons are wells of psychiatric morbidity. At one end of the spectrum, some 500 prisoners have to be transferred to special hospitals each year. At the other end, some 70 per cent are suffering from at least two personality disorders which are bound to impact upon their behaviour. Prisons are also the unfortunate recipients of people who were in asylums, until these were abolished. To prevent that happening the previous Government initiated a report, conducted by the noble Lord, Lord Bradley, on diverting people with mental health problems away from prison. This was a very, very comprehensive report, with recommendations which affected the courts and the police in particular. This Government, as I understand, have accepted the recommendations and are working towards them. However, they of course depend on there being proper mental health assessment and treatment available at the point where a person comes into contact with the criminal justice system. This is usually at a police station, to start with, and then at a court. I have been to see one of the pilot schemes in Brighton, where an extremely able psychiatric nurse in the court was able to divert people away from imprisonment, not least because they had taken enormous trouble to ensure that the necessary support for people with mental health problems was available from that moment on. Without that support being available, the scheme becomes worthless. However, before that, the first time that people come into contact with the system is in police stations. What worries me about progress in the future is that unless there is a police representative on health and well-being boards able to represent the needs of the people who make those assessments at the police station, the diversion scheme could fail at its start. The purpose of my amendment, therefore, is to ask the Minister to consider very seriously the addition of a police representative on health and well-being boards, to make certain that the needs of police stations are represented at source, in every area of the country where diversion schemes will start.

I say this because when I started inspecting prisons, I discovered that prisons, alone in this country, were not part of the National Health Service. Indeed, they did not become part of the National Health Service until 2003. The result of that was that the needs of people from prisons were not built into National Health Service estimates, and so they were always competing for other requirements. To avoid that error being repeated, I therefore believe that it is essential to have police representation at the place where planning is carried out.

My second area is to do with probation. With regard to the plans—“Breaking the Cycle”, the rehabilitation revolution and all the noise that has come from the Ministry of Justice about reducing the prison population and providing alternatives to custody—most of that comes down to the probation service. There is absolutely no reason why the probation service should not carry out exactly the same programme as happens in prisons; that is, people are assessed, programmes are made and conducted, and then the person is transitioned into the community. There is no reason why the assessing, the programming and the supervision of mental and physical health treatment should not happen to somebody on probation in exactly the same way as it happens in prison. However, the probation service needs help and guidance in the provision of that assessment and programming. That is why I am asking the Minister to consider that a representative of the probation service should be included on the health and well-being board, in order to ensure that its needs are included in the plans, so that the probation service can make the delivery of community sentences more effective and more acceptable in the public eye, and is therefore able to contribute to what the Secretary of State for Justice is seeking; namely, a reduction in the prison population.

[Lord Low of Dalston]

My Lords, I add my voice very briefly to those of the noble Baronesses, Lady Wilkins and Lady Finlay, in support of Amendment 330A, which provides that health and well-being boards should include a representative of education providers in the area. The noble Baroness, Lady Wilkins, has spoken to the amendment very fully and ably; however, perhaps I can underline the point to which she has already alluded. When we considered the Education Bill in Grand Committee earlier in the year, there was great concern that the Government wished to remove the duty on schools which had only recently been laid on them, to co-operate with other services in pursuing the welfare of children. We were particularly concerned about this at the time of the riots, when people were emphasising the role that schools had to play in combating exclusion and disaffection among children. I am glad to say that the Government took the force of our point and withdrew the proposal to remove this duty from schools. I hope that the Minister will agree that a joined-up approach would suggest—as the noble Baroness, Lady Wilkins, has argued—that there should be a reciprocal duty on health and well-being boards, at least to include a representative of education providers on the board.

11:45

[Baroness Farrington of Ribbleton]

My Lords, I rise to speak about the importance of the role of the police. I made my maiden speech in your Lordships’ House on the subject of care of mentally ill people taken into custody in police cells. I was struck at that stage—I declare a former interest as a member of a police authority and a visitor of police cells—that time after time, I was informed and became aware that people were being taken into custody, not because it was most appropriate, but because their problems were mental health related. They were being taken into police cells for their own protection or for the protection of other people, because there was nowhere else for custody officers to deal with this. I hope the Minister will take this carefully into account when looking at the role of the police, in particular at that initial point of contact. Sadly, many people who end up in custody and police cells have problems that are either mental health related or drug or alcohol related. It creates a problem for the police service, particularly at weekends. It also leads to a reaction to those people who have behaved in a way that causes them to be taken into custody so that they end up in prison, rather than receiving a course of treatment.

[Baroness Donaghy]

My Lords, I support the amendments of the noble Baroness, Lady Finlay of Llandaff, which refer to allied health professionals, and I want to widen them to include the whole health team. We have been talking about structures, consultation, rights of representation, and roles and responsibility in the new structures, but we need to ensure that the service is delivered to the patients by the health team. Nowhere does the Bill appear to acknowledge the importance of the majority of staff in the health and care services: the invisible majority. I know from working in universities for 33 years that there are academics and students, and then all the rest who are often referred to in the negative as non-teaching staff. In the health service, there are doctors, sometimes nurses, and patients, while the rest are rarely referred to as people: they are back office or integrated services. I want to place on record the importance of the health team: the cleaners, caterers, maintenance staff, technicians, receptionists, secretaries, administrators, finance staff, and those involved with transport, as well the allied health professionals mentioned by the noble Baroness, Lady Finlay.

When I was a non-executive director of a foundation trust, we had to deal with the issue of staff who were employed by PFI projects. It is not my intention to discuss the rights and wrongs of PFI, but to illustrate the huge efforts required to ensure that the PFI staff felt part of the health team, even though the foundation trust had no direct management responsibility. The same applies to contracted-out staff generally. Some, though not all, of the problems of hygiene in hospitals and failure to feed vulnerable patients were caused by the separation of these contracted-out staff from the health team. If transport is not co-ordinated, a patient can be in a ward for an extra day. An efficient receptionist can make the difference between an efficient department and a failing department. Those are only two examples. There has been a deafening silence about the health team, and I am seeking a statement of support for all the staff in the health service and an acknowledgement that the future of the service, whatever that is after this unnecessary Bill, will depend on the health team being able to work together in an integrated way.

[Baroness Cumberlege]

My Lords, I address my remarks to Amendment 330ZAB and others that concern the composition of the health and well-being boards, and I would like to say a word in general about the boards.

To me, they are a spark of inspiration. In the next grouping we will have some specific amendments from noble Lords concerning integration, and we have heard a bit about it already today. I have been conscious that throughout the Committee debates the virtues of integration have often been referred to by my noble friend Lord Howe, and part of the integration he has cited is that very valuable tool, the health and well-being board, bringing together social services, health, and importantly, local healthwatch.

The Bill is gratifyingly lean in its suggested membership of the board: just six essential members. However, in Clause 191(2)(g) it gives flexibility in allowing the board to appoint:

“(g) such other persons, or representatives of such other persons, as the local authority thinks appropriate”.

However, in the same clause, 191(9), it must consult with the members of the board. That seems absolutely right and proper. The success of these boards will be in their balance. That is very important, and what we cannot afford is a single constituency trying to pack the board with its own colleagues. The board itself can put a brake on that, and keep the balance right.

The board itself can appoint additional members, and I can see that being invaluable if the board has chosen a subject which it wishes to target, such as obesity, as mentioned by my noble friend Lady Jolly. Poor housing was also mentioned, as well as alcohol, sexual health, prisons, probation, or children. There is nothing to stop the board giving the individual a short tenure, if the board so wishes. However, if we concede to all these additional, very persuasive arguments that are being put for adding more and more members—I had a quick count of all the amendments on the Marshalled List—we would have statutory boards in the order of 24 members. That is a nightmare for quick decision-making.

I chaired a joint finance committee years and years ago, when we were trying to do the same thing, and we had a board of that size. It became a talking shop. No one would take the decisions that were really necessary. With great respect to local government, where I spent 20 years, we do not want another committee of the council. These boards have to be different.

I said I thought the concept was a spark of inspiration, but I can see this spark extinguished very quickly if we end up with big, unwieldy, cumbersome talking shops. The health and well-being boards should be composed of the great innovators; people with unusual and challenging ideas; people who are prepared to think the unthinkable; imaginative people, fleet of foot, trying new ideas, and abandoning them if they do not work out. Above all, they should be the risk takers.

We know that innovation seldom comes from large, cumbersome committees. It very often comes from young people sparking off ideas. These are people who are probably quite difficult to work with. The Steve Jobs, the Bill Gates, the James Dysons of this world, determined to get their ideas from the drawing board into our homes, changing our lives for the better. They are the people who are not afraid of disruptive innovation.

The NHS thirsts for innovation, but it cannot face the disruption. One of the examples of successful disruptive innovation that I came across is Hairdressers for Health. In a very impoverished area south of Manchester, where you heard the crunch of broken glass under your feet when you walked, where graffiti was everywhere, where the school was protected by razor wire, the hairdressing salon was one oasis of peace and sanity. A junior director of public health, who was very anxious to increase the uptake of cervical screening, recruited the hairdressers to ask their clients—people will know that hairdressers always refer to their customers as clients—whether they had had a cervical screen and, if not, to give them the reason why they ought to go and have one. The hairdressers were given a book of difficult questions that they could answer and a phone number if they got stuck. The results were really impressive. When I asked the women why they went for cervical screening, they would say, “Tracy does my hair. She does it beautifully and I really trust Tracy”.

There are a million reasons why you should not go down that road. If you had a big, cumbersome committee, I can just hear the remarks, “The hairdressers aren’t up to it. The hairdressers really won’t have the information. The clients won’t believe the hairdressers”. No, here was a courageous young director of public health, not working through a huge board, thinking really laterally and doing something terrific. That is what we want from these health and well-being boards. We do not want large committees full of worthies shirking innovation because it is just too risky. Of course, there are always a million reasons why you should not do something. What started as an inspiration is quickly reduced to the boring status quo because that is safe. It takes an awful long time to get back to the boring, safe status quo.

When people decide for themselves, they are more likely to be successful. I applaud the flexibility of the Bill. I see merit in every case that is being put today. The case is being put extremely persuasively, but I urge your Lordships to resist the temptation to tie the hands and stamp on the autonomy of the new boards. We need them to be a success. I am working at the moment with some that are in shadow form. The good will that is in those boards is terrific. We should be enhancing and cherishing that and not directing exactly how they should work. If we do that, I regret that we will simply have just another committee of the council.

[Baroness Benjamin]

My Lords, childhood lasts a lifetime. Whatever happens to people during childhood, they will take with them long into adulthood. Sadly, many children’s early lives are broken by the relentless mental and physical suffering that they go through daily. Even children who suffer from lesser known conditions such as sickle cell, which is not widely recognised by teachers or schools, are made to feel inadequate and lose their confidence. We need to put in place a holistic provision of care for those children, for their voices to be heard and for them to know that society cares about their well-being. That will give them hope for the future.

As we have heard from noble Lords across the House, we need joined-up policies for everyone to work together. I hope that my noble friend the Minister will show compassion and understanding when he considers these amendments, which I believe put children first and show that we are a nation that cares about our children, our future.

[Lord Warner]

My Lords, I want to say a few words about children in this group of amendments. I know and agree with the arguments put forward by the noble Baroness, Lady Cumberlege. We do not want this to become a huge talking shop. I sympathise with and support that idea, but I think that children are different in kind, in part for the reasons given by the noble Baroness, Lady Benjamin. If we are serious about investing in the future, we need to pick up some of the issues around children much earlier. Diabetes and obesity are big issues facing our society. Many of our services are not very good at picking up the needs of children and responding to them in a comprehensive manner. There are lots of organisations that speak on behalf of them, just as there are lots of organisations that speak up for other interest groups, but I would say that the investment issue on children is much more significant than the investment issue on 80 to 85 year- olds, or even 70 year-olds. That is not to say that those people do not need a good or compassionate set of services responding to their needs, but if we as a society neglect the voice and needs of children, we are just bringing a lot of problems upon ourselves as a society—more so than if we have less good care at much older age groups.

From my time as a Minister, I thought that the voice of the child in the NHS was really quite muted. The working across boundaries in the needs of children is often far less good than it should be. We need to put in the Bill a stronger requirement to listen to the voice of children and to have their representatives fully focused in the health and well-being boards. They are different in kind and their voice has not been heard enough. Too often, public services operate through parents rather than going straight to the child. That is particularly an issue with young carers and with adolescents. We need a bit of a wake-up call on the needs of children in our NHS and social services and across the spectrum of their needs. I hope that the Minister will look carefully at this issue in the particular circumstances of children.

[Lord Beecham]

My Lords, these few clauses relating to health and well-being boards are perhaps less politically exciting than many of those that we have spent days debating—days that are rapidly drawing to a close—but they are potentially highly significant and their importance will be realised over time. The purpose of these boards is to facilitate integration between local government and the National Health Service in the planning and provision of all services relevant to the health and well-being of the present and the future population. They should take a strategic view of a range of services—health in its conventional sense; public health, which is now effectively to be restored to local government; social care; children’s services; housing; environmental services; leisure; and the criminal justice system, all of which have been mentioned by various of your Lordships this morning.

In addition to that fundamental strategic role, these clauses provide for greater democratic accountability at local level and the engagement of the community and the voluntary sector. As we have heard, they also ought to provide for the engagement of staff with a range of professional skills to be brought to bear on the issues that communities face.

I listened with some care and, frankly, growing concern to the observations of the noble Baroness, Lady Cumberlege. If I may say so, she got it wrong about the purpose of the health and well-being boards. They are not operational boards. They are to produce a health and well-being strategy. They operate at that level. They will not be directly involved with implementing that strategy. They will not be responsible for the range of services which will be required both to work together and to work efficiently to impact on the health and well-being of an area.

The noble Baroness also perhaps misunderstands how influential bodies like local government can be. When I had responsibility in the area of social care in Newcastle, many years ago, I was able, with a committee of 15, to drive through a significant programme of change in our authority. We created one of the first welfare rights services, we trebled meals on wheels, we doubled the home help service and we made vast changes in the way that we provided for children’s services and adult services alike. It is perfectly possible to do that with a reasonably sized committee, provided that there are people on it with the kind of vision which is necessary, and people in the employ of whatever authority is providing those services who, equally, have drive, sensitivity and vision.

In looking at the role of the health and well-being boards, then, we have to have regard to that area of responsibility. Of course they will be working to an agenda which will actually be set rather separately, in a sense, because it is the local authority and the clinical commissioning groups which will be responsible for the preparation of the joint strategic needs assessment. That is the basis upon which matters will have to be carried forward.

I am afraid that the noble Baroness, Lady Jolly, joins the noble Baroness, Lady Cumberlege, in possibly having slightly misunderstood the nature of one of the problems that she touched upon. She is absolutely right that housing has to be an integral part of the programme to deal with health, both for communities and individuals, but her amendment is the wrong way around. It is not that the health and well-being board has to take into account the views of the planning authority. It is the other way around—the planning authorities and housing authorities should be drawing up their plans on the basis of the strategic needs assessment and the health and well-being strategy that follows it. We are not at odds about that, really; it is perhaps simply the wording of the amendment. I will have to make a confession about the wording of my amendments later, so I might also plead guilty to the charge that I have levied at noble Baronesses opposite.

Before coming on to the amendments as such, there are two or three questions upon which I would like to hear the Minister’s views. The first is in relation to the relationship between the national Commissioning Board, and its local outposts in particular, and the health and well-being boards. The Bill refers to the position of the national Commissioning Board, but I am interested to learn how he sees the role of the local outposts—I think that is the phrase—which will be established, because part of the agenda which will remain with the national Commissioning Board will impinge pretty directly upon the local strategy and will have very significant and very specific local implications.

Going beyond that, perhaps the Minister would comment upon whether the Government intend to replicate at national level the kind of joint working across departments that they are, perfectly properly, looking to create at local level. Will we see some ministerial committee or some forum for relevant government departments? I go beyond even those that have so far been mentioned. I am thinking in particular of the Department for Work and Pensions and the impact of the Welfare Reform Bill, as well as its general responsibility for benefits; and, bearing in mind the observations of many noble Lords about having regard for the needs of children and young people, but also adults and people with learning disabilities and so on, the Department for Business, Innovation and Skills clearly has a role. It would be interesting to learn whether the Government’s thinking has taken them beyond the local level to looking at how these matters might be addressed nationally.

In addition to that, there is the question of community budgeting, as the phrase now is: whether it is envisaged that it has a role in this context and whether some of the pilots being considered nationally could address those issues.

I will now speak to the amendments in my name and those of my colleagues, Amendments 330ZB, 330ZAB, 331A, 331AAA, 335A, 336A and 336AA. Amendment 330ZB requires the publication of an integrated commissioning plan to which all partners must have regard. That might go somewhat beyond the terms of the Bill as it stands at present, but it seems essential that there should be an integrated commissioning plan across the piece. We are, after all, talking about very considerable sums of public money being spent. Since most of the health budget as such is being devolved to clinical commissioning groups, we are talking about £80 billion nationally. That would be translated into smaller but nevertheless significant sums of money locally, to which would be added the local authority’s own contributions in any given area across its own responsibilities. For a large authority, we are probably talking of a budget of close to £1 billion —possibly more—which will be encompassed within, though not directly administered by, the health and well-being board.

Amendment 335A calls on the health and well-being board to have the responsibility of signing off the clinical commissioning group’s commissioning plan. This is to ensure consistency and a degree of accountability for the work undertaken by the clinical commissioning groups. That is backed up by another amendment which gives the health and well-being board the right to request information as to the progress in implementing the strategy, so that, in addition to the scrutiny committee of the local authority—it in any event has a wide range of possibilities to scrutinise what is happening—the board itself, having set the strategy, is able to see how it is being implemented.

We now come to the question of membership. This is certainly a somewhat difficult issue. There are a whole range of amendments, most of which I would agree with, setting out the wide range of organisations which should be included in membership of the board. They include representatives of education providers; pharmacies; the probation and police services, mentioned by the noble Lord, Lord Ramsbotham; allied health professionals, about whom the noble Baroness, Lady Finlay, spoke; and people from the field of alcohol and drug abuse and the field of safeguarding. It is a significant number.

The Bill at present constitutes the health and well-being board as a committee of the local authority, yet somewhat paradoxically, as the noble Baroness, Lady Jolly, pointed out, only requires a single member of a local authority to be appointed to a board. Admittedly, this is as a minimum, but it could hardly be less. Interestingly, my own authority in Newcastle recently agreed a shadow board, in my absence, which is 25 strong. That strikes me as slightly on the high side, but it includes two representatives from each of the two clinical commissioning groups in the city, from the three trusts that serve the city and from a range of other organisations —many of which reflect the bodies to which noble Lords have referred this morning in debate or in amendments—as well as just three councillors.

12:15

The Bill also provides for statutory appointments, mainly of directors of services within local government. I may have said this before in debate and I hope that noble Lords will forgive me if I am repeating remarks I have made earlier, but I have a difficulty about elected members voting alongside officers whom they appoint and with whom they have to work in a different context in the local authority. I do not think that is a satisfactory relationship. They should certainly be there. I include in that the director of public health, who would have to attend, and appropriate other officers, such as the directors of children’s services, environment and adult services. They absolutely should be there, but in my view it should be as advisers to the board.

There is an amendment, which is not well drafted—for which I accept responsibility—that suggests that only councillors should be voting on this board. That was really meant to say that, of the council appointees to the board, only councillors should vote. It was not meant to exclude others. It is obviously necessary for partner organisations, such as clinical commissioning groups and any trusts that might be represented, to have a vote on the board. I take the suggestion of the noble Baroness, Lady Jolly, that equality between the partners and the local authority might be sensible.

Another amendment directly addresses the issue to which the noble Baroness rightly referred—again, I have raised this before and on this occasion I make no apology for repeating myself—of district council representation in two-tier areas, because of the range of their responsibilities, covering not just housing, which is clearly one of them, but environmental health, leisure and other services to which she referred. To avoid making too large a meeting, particularly with too many voting members, the amendment refers to having a representative of district councils, but of course there could also be an officer from district councils in attendance in a given area. That seems to make a better balance in the arrangement of services.

We support most of the amendments tabled by the noble Baronesses, Lady Massey, Lady Finlay and Lady Greengross, the noble Lord, Lord Ramsbotham, and others. At the table where strategy is being discussed, we think it is necessary to have capable, representative voices of those most interested in the outcomes, whether representing present and future clients or from the professional background, bringing their particular expertise to bear on the issues that the board has to address and take into account in preparing the strategies that, over time, should make a significant difference.

[Lord Mawhinney]

I am most grateful to the noble Lord. I think he knows that I listen carefully to him when he is on his feet. The essence of a democracy is that people are elected to represent their community. I can see an argument for having some professionally trained people adding their expertise, because it might be a stretch to expect locally elected people to command the technicalities of a professional view, but given that commitment of democracy, why does the noble Lord think it necessary to have so many other people representing—in the best possible spirit, I hasten to add—specialist vocations or vested interests?

[Lord Beecham]

In the first place, I am grateful to the noble Lord, Lord Mawhinney, for recognising when I am on my feet, given that there is not much of me to be seen. In relation to his question, I am not suggesting that they should be voting members. That is the point. There is a difference. The voting members—I do not mean executive members—should be confined to elected councillors and those representing the other partners, the clinical commissioning groups and the trusts. It is a partnership arrangement. You have this sort of arrangement in care trusts and the like. It is an acceptable one, but at the very least there should be equality of arms between the elected members and those from other organisations.

[Baroness Murphy]

Can we be quite clear that the noble Lord, Lord Beecham, is asking for a health and well-being joint board on which the director of social services and the director of public health—two crucial people contributing to the board—have no vote?

[Lord Beecham]

That is exactly right. They do not have a vote in the council, which determines a budget of several hundred million pounds and deals with huge issues of social care and public health. They are paid officers. That is a distinct, separate role. On this, the noble Lord, Lord Mawhinney, and I are entirely at one.

There are ways in which the current positions can be improved. I hope that the Minister may be able to give an indication today that there is some scope for change. However, there may be issues that we need to address on Report if what is basically a good plan cannot be further improved today.

[Baroness Cumberlege]

I do not really accept the noble Lord’s criticism of my thinking. Of course I understand that these health and well-being boards are essentially planning boards. I will read very carefully what he has said in Hansard, but I am sure he accepts that you cannot do the planning if you are totally ignorant of the implementation of what you are planning. Clearly, finance and other things come into this. The health and well-being boards that I have spoken to say that what is really important to the success of the board is the equality of members on it. If he is saying that only local government councillors have a vote, I think that people who also hold budgets—the clinical commissioning group people and the health people—would be very upset if decisions were made involving their finances without them having an opportunity to put their case in a vote, if it comes to that. Again, the boards that I have been speaking to and working with have said that they would always try very hard to avoid a vote.

When I came into the health service from local government, I found the whole culture very different. I enjoyed working as an equal partner with those who were advising me, such as the district or county medical officer and others. We really should leave this to the health and well-being boards to decide how they want to run their business. Why do we always think we know best? Every health and well-being board will be totally different, representing different areas of the country and all sorts of different interests. For once, let us have a light touch and trust the people who are going to be doing this business.

[Lord Beecham]

I think we need to set out a minimum requirement. That is all I am seeking to do. I am not seeking to circumscribe.

[Baroness Cumberlege]

It is in the Bill.

[Lord Beecham]

The minimum requirement in the Bill is the wrong requirement. That is the point for some of us, at any rate.

[A noble Lord]

Rubbish.

[Lord Beecham]

Rubbish is the responsibility of district councils, as the noble Baroness, Lady Jolly, would point out—at least its collection is.

We clearly do not agree about this. The Bill does not go sufficiently far to underpin democratic accountability. It goes too far to entrench professional and bureaucratic interests, whose voice should certainly be heard but who should not be able to vote on these decisions, just as they are not in central or local government.

[Earl Howe]

My Lords, this group of amendments has prompted a very worthwhile debate. They all relate to health and well-being boards, and in particular their statutory minimum membership, their responsibility for preparing joint strategic needs assessments and joint health and well-being strategies, as well as their role in promoting integration. On the first of these issues, concern has been expressed about the membership of health and well-being boards. I am sympathetic to the very important points that several noble Lords have raised. We are all keen to ensure that health and well-being boards access the best expertise and professional advice on the myriad complex challenges facing the health and well-being of their local populations. However, taken together these amendments would significantly increase the minimum membership of each health and well-being board, making the requirements substantially more prescriptive. We want to preserve local discretion and flexibility in these arrangements and the ability of boards to shape wider membership in a way that reflects local priorities. These amendments would severely limit that flexibility and discretion. Their other big downside is that they could lead to larger and somewhat unwieldy boards, making meaningful dialogue and decision-making more difficult. My noble friend Lady Cumberlege was absolutely right to sound the note of warning that she did.

In general, we want to avoid being too prescriptive. The Bill sets out a minimum membership for health and well-being boards, but members can be added by either the local authority or the health and well-being board. I would say to the noble Lord, Lord Beecham, in particular that following the Future Forum report, we made a commitment that it will be for local authorities to determine the precise number of elected representatives on their board. We fully recognise that health and well-being boards will want to draw from a range of expertise beyond the statutory membership, such as clinicians, allied health professionals, police, probation service and voluntary sector groups. However, in deciding who to invite, they will need to consider local needs and priorities and the delicate balance between having the right people and having too many to make it an effective board.

The noble Baroness, Lady Finlay, was quite right to emphasise that the right people needed to be there. It is perhaps worth highlighting in that context that we have retained the power for the Secretary of State to issue guidance on the preparation of joint strategic needs assessments, and there will be power to issue guidance on the preparation of joint health and well-being strategies, particularly when it comes to defining what best practice looks like.

The noble Lord, Lord Beecham, asked how the NHS Commissioning Board would fit in with health and well-being boards. The NHS Commissioning Board will be required to send a representative when asked by the health and well-being board and where the discussions touch on the proposed exercise of local commissioning functions of the commissioning board, for example when discussing primary care commissioning. It will also be required to send a representative to participate in the health and well-being board’s preparation of the JSNA and a health and well-being strategy. With the agreement of the health and well-being board, the Commissioning Board may appoint someone to represent it who is not its member or employee, such as a clinical commissioning group representative.

[Lord Beecham]

Does that mean that it will be the local outpost, if that is the correct phrase, of the national Commissioning Board that will have that relationship, or will this in effect be directed from London?

[Earl Howe]

It will almost certainly be the local outpost that will have direct responsibility for those matters.

A number of amendments would introduce specific requirements in relation to the JSNA, but before I move on to that I have been informed of something that I think I probably implied, if not stated. It would be up to the board to decide who would be most appropriate to attend at a particular health and well-being board meeting.

I agree that the JSNA must be a full analysis that covers the current and future health and social care needs of the local population. It will be a framework to examine inequalities and the factors that impact on health and well-being. This could include aspects such as deprivation. Its scope will naturally include health and social care needs that are related to a wide range of areas, such as alcohol harm, disability or older people.

12:30

In preparing the JSNA and joint health and well-being strategies, local authorities and CCGs will be under a duty, which the health and well-being boards will discharge, to involve people who live or work in the area. In practice this could include allied health professionals, as proposed in the amendments of the noble Baroness, Lady Finlay, Amendments 327A and 328A. A number of noble Lords, in particular the noble Baroness, Lady Wilkins, my noble friend Lady Benjamin and the noble Lord, Lord Warner, raised concerns about how health and well-being boards will operate in relation to children’s services. I fully agree that joining up health and social care services for children as well as adults is crucial. That is why the director of children’s services is a mandatory member of the board. It is also why the scope of the JSNA and joint strategy covers children’s services across health and social care. The duties to involve local people in the preparation of the JSNA and joint strategy do not distinguish between adults and children, so we expect the voice of children to be heard.

Section 10(1) of the Children Act 2004 places a duty on “relevant partners” to co-operate with the local authority. Relevant partners include maintained schools, including academy schools, and local health bodies such as the CCGs when they are formed. As I have said, directors of children’s services will be statutory members on the health and well-being boards. They will be well placed to promote the interests of children as they relate to education services.

My noble friend Lady Jolly raised the issue of district council involvement, as did other noble Lords. District councils have a crucial role to play in offering local insight and expertise. Health and well-being boards will have the flexibility to include district council representatives in their membership, where the district council is not the local authority that is required to establish the boards. There will also be duties on them to involve district councils in preparing the joint strategic needs assessment.

We know that a large number of local areas are already working with stakeholders to explore and agree how they can work together in the future to make the biggest difference to local people, so that everyone, whether they are district councils, clinicians, local providers or members of the voluntary sector, can contribute in the most appropriate way.

The joint health and well-being strategy will be a shared, overarching response addressing the health and social care needs of an area identified through the JSNA. A number of amendments highlight the desirability of integrated services. In the joint strategy, the board will be able to consider how the commissioning of wider health-related services could be more closely integrated with health and social care commissioning. For example, the board could consider whether and how housing or local authority leisure services affect health, and if they do, how commissioning could be more closely integrated with commissioning of health or social care services.

However, I would say to the noble Baroness, Lady Massey, in particular, that this is not something that we wish to be prescriptive about in the Bill. Instead, we are leaving these decisions to be taken locally; we believe that that is right. In response to a point made by the noble Baroness about the joining up of children’s services being in some way optional for health and well-being boards, that is certainly not right. The board’s duties cover both adults and children; it would not be open to a board to do nothing with respect to children’s services. The noble Baroness and I would agree that integration across health and social care is applicable in many situations and is to be regarded quite often as best practice. However, I suggest that as such it is much more the province of statutory guidance.

The noble Baroness, Lady Greengross, asked a number of highly relevant questions about how we ensure that integration happens on the ground. That is why we have asked the Future Forum to report on this topic. I can confirm that we will be responding to their latest work in January, so perhaps I can speak with the noble Baroness at that point.

We have also included in the Bill a duty for key health and social care commissioners to have regard to both the JSNA and the joint health and well-being strategy when exercising their functions. If their commissioning plans vary significantly from them, they will have to be able to justify why, or consider changing their plans.

However, I want to state my firm view that it is right that health and well-being boards do not have a right of veto over plans, as that would undermine commissioners’ autonomy and introduce additional complexity and uncertainty into a relationship that should in essence be built on trust and partnership working. It would also give health and well-being boards the ability to make commissioning decisions that could affect expenditure from the NHS, without them having to take responsibility for that expenditure. That would not be appropriate.

We must not forget that this policy is not primarily about setting up a board; it is about joining up the commissioning process at a local level by bringing key partners together in a strategic and coherent way. Those partners can then consider the total resource available and come to a joint understanding as to how the resources can be best invested to secure better health and well-being outcomes for their whole population.

Clause 192 supports that objective by placing a duty on health and well-being boards to encourage integrated working between commissioners of health and social care services, which is exactly what noble Lords have been urging. Alongside the integration duties throughout the Bill, health and well-being boards must also consider the use of partnership arrangements, such as lead commissioning and pooled budgets, when preparing the joint health and well-being strategy.

Amendment 336A, from the noble Lord, Lord Beecham, would place an additional function on health and well-being boards and give them powers to make referrals for investigation. In doing so it raises an important issue, which I know is of concern to the Government as well as the Committee, and on which we had a good debate in an earlier session on 22 November.

However, this amendment is unnecessary, as it would establish a referral process that would in many respects duplicate existing roles and responsibilities within the system, such as those of the Care Quality Commission and local healthwatch organisations, which will of course be able to make recommendations for service improvements and investigations.

The noble Lord, Lord Beecham, asked about cross-government working. Government departments already enjoy close working relationships on health issues. These will continue, including through the Cabinet Committee that we now have on public health. The noble Lord also referred to community place-based budgets. We want to ensure that GPs and councils have the flexibility to pool and align funds locally where that will improve outcomes for people. The health and well-being boards provide the ideal forum for local application of community budgets, and we intend to explore any barriers to that happening.

Finally, the noble Baroness, Lady Donaghy, referred—very aptly I thought—to the health team. The Government, and the Bill, place a great deal of faith in professionals. We think that that is right, and we want the NHS of the future to be led by clinicians and professionals across the health service, so I hope I can reassure her that we are at one on the value of the whole health team, as she put it.

I hope I have reassured noble Lords of our good intentions in this area, and that I have answered the questions put to me. I hope, too, that noble Lords will feel able not to press their amendments as a result.

[Baroness Massey of Darwen]

Could the Minister tease out for us the difference between the words “may” and “must”? Is he saying that the word “may” will refer to issues that will be in guidance and the word “must” will be in the Bill, or is it more complicated than that?

[Earl Howe]

I hope the noble Baroness will have sensed from my remarks that we want to avoid being overprescriptive. On the other hand, we are clear about what best practice looks like, and in framing JSNAs and the health and well-being strategies we have provided for statutory guidance which can set out what best practice looks like.

I think that that is the appropriate balance, rather than putting “must” in the Bill all the time. Local authorities are autonomous bodies and we must hesitate before directing them too closely. I very much agreed with the points made by my noble friend Lady Cumberlege on this. It is not, of course, that we regard these as unimportant; it is a question of how much we mandate and how much we leave to local discretion.

[Baroness Finlay of Llandaff]

My Lords, I will build slightly on that because I have my name on the same amendments. I understand the Minister’s response regarding the need not to be over-prescriptive, and not to have boards that are burdensome and cannot take decisions easily. He has referred to guidance. It would be very helpful if he could assure us that the contents of this debate and the trends and themes that have come through will inform that guidance, and that the health and well-being boards will be asked to particularly consider and consult with the broad range of professionals and prisoners, and the particular needs of children—which I emphasise. This will ensure that their strategy is broad and really meets the needs, so that there is not, inadvertently, a small board taking narrow decisions.

[Earl Howe]

My Lords, I can assure the noble Baroness that the substance of this debate will most certainly be fed in. We will be revising the statutory guidance on the joint strategic needs assessment in due course to reflect the changing system. As a result of the Future Forums recommendations, we will also be issuing statutory guidance on the joint health and well-being strategy. There is therefore plenty of scope to build in the very salient and important points that noble Lords have raised.

Amendment agreed.

Clause 187, as amended, agreed.

Clause 188 : Amendments consequential on section 187

Amendments 327ZD to 327ZG agreed.

Clause 188, as amended, agreed.

Clause 189 : Joint strategic needs assessments

Amendments 327A to 327C not moved.

Clause 189 agreed.

Clause 190 : Joint health and wellbeing strategies

Amendment 328 to 330ZAA not moved.

Clause 190 agreed.

Clause 191 : Establishment of Health and Wellbeing Boards

Amendments 330ZAB to 330D not moved.

Amendment 330E had been withdrawn from the Marshalled List.

Amendments 330F to 331AAA not moved.

Clause 191 agreed.

Clause 192 : Duty to encourage integrated working

Amendments 331AB to 331C not moved.

12:45

Clause 192 : Duty to encourage integrated working

Amendment 332

Moved by

[Lord Warner]

332: Clause 192, page 193, line 31, leave out “an integrated manner” and insert “a manner that integrates the delivery of services to individuals”

[Lord Warner]

My Lords, I shall speak also to Amendments 335 and 336, which I degrouped from the previous grouping.

Amendments 332 and 335 provide an opportunity to press the Government again on securing more precision in this Bill about what we mean by integration. The integration that means most to patients and service users and their carers is the integration of service delivery. That is what Amendment 332 tries to bring out, by replacing reference to people working “in an integrated manner” with wording that ensures that they work in,

“a manner that integrates the delivery of services to individuals”.

Amendment 335 has another go at trying to persuade the Government to include in this Bill a definition of integration. I find it very odd that the Government go to all the trouble in Clause 192—as elsewhere in the Bill—of providing definitions of health services, health-related services and social care services, but will nowhere provide a definition of integration even though the term is liberally sprinkled throughout the Bill. I congratulate them on that liberal sprinkling, and I think that the intentions are very good. However, using the term “integration” in a variety of ways, without being clear what the important meaning of it is to patients, promises a lot but risks ensuring that there is a likelihood of delivering very little change that actually benefits individuals or helps break down the barriers between health and social care. My particular concern is that some people will take away from this Bill that they have met the needs of integration by organisational integration rather than focusing on the thing which matters to individuals, which is the integration of service delivery.

I hope that the Minister will think further about inserting a definition of integration in the Bill, to give it more precision. I would be happy, as I am sure other noble Lords across the Benches would be, to help him to try to secure a definition. I do not claim that getting that definition right is easy, but I think that while the Bill is in this House it is worth the trouble of trying to get a more precise definition of the integration that would really benefit individuals in the area of service delivery.

Amendment 336 also seeks to push integration, but in a very specific way. It proposes that a local authority with a health and well-being board may approach the national Commissioning Board about assuming,

“some or all of the functions (and associated funding) of a clinical commissioning group where such a group agrees that this is in the best interests of patients”,

particularly if it improves integration. The Government are very keen to argue that people at local level should be able to shape their local arrangements for commissioning and providing services. I have a great deal of sympathy with that approach. This amendment would enable clinical commissioning groups and health and well-being boards to come together to form a single body for commissioning services in accordance with a joint service needs assessment. Given the variation in the size of clinical commissioning groups, there may be some large ones that would like to share staff and reduce overheads by amalgamating their activities in the way that this amendment permits. In addition, some of us believe that it will not be possible to sustain 250 or more clinical commissioning groups, which might then raise the issue of merging those groups and possibly going further and merging the merged with a health and well-being board as well.

There is no compulsion or pressure in this amendment. It merely enables clinical commissioning groups and health and well-being boards to come together, integrate their activities, share priorities and work closely together in the way that public money is spent, particularly in relation to integrating services across the NHS and local government boundaries. I hope that, in the spirit of local decision-making, a permissive but non-mandatory power of this kind could be inserted into the Bill.

I would very much like to hear the Minister’s views on this probing amendment and whether he sees merit in it. I shall be returning to the issue of integration, and a definition of it, on Report. I think there is support for this across many parts of the House. I beg to move.

[Baroness Williams of Crosby]

My Lords, we on these Benches have strongly supported the many references to integration that have been made in Committee, and it is obviously central to the whole of the attempt to deal with the major problems that confront us all over the next few years. However, I completely agree with the noble Lord, Lord Warner, that it is not very clear what this is, other than a nice word. The more flesh that we can put on it, the better all round, and the clearer the position of local authorities will be.

Many local authorities have of course already delivered, on behalf of the primary care trusts, the kind of approach that the noble Lord, Lord Warner, has been advocating, but the situation has to go a great deal further. We are particularly attracted by his Amendment 336 because it is very clear and precise in what it suggests about the relationship between CCGs, particularly those who wish to devolve some of their responsibilities, or in some cases are unable to deliver on those responsibilities.

I would like to say, from these Benches, on behalf of my noble friend Lady Jolly and myself, is that it is crucial that at an early stage health and well-being boards are able to mount mechanisms for early decision-making. If a CCG is unable to meet part of its responsibilities—and that may happen at relatively short notice—it is critical that the health and well-being boards have structures within their own management which would enable them to deal with the issues rapidly. It would be no good at all if there is a long interregnum when services to patients are put at risk.

I would advocate, in addition to what the noble Lord, Lord Warner, has said, that the new health and well-being boards should make an early approach to seeing how they would deal with what might be, if not an emergency, at least the beginnings of an emergency in the particular aspect of what the CCGs are proposing to deliver.

[Baroness Murphy]

My Lords, I have added my name to these amendments. Like the noble Lord, Lord Warner, I have come back time and again to this issue of what we really mean by integration, and what it will mean for patients, clients, and people living in the community. It must be a seamless service. They do not mind, of course, where the services come from, but it has to be utterly without gaps. It has to operate 365 days a year, year after year after year, if it is to work.

It seems to me that these health and well-being boards have two huge areas that they will have to work in: the public health and well-being functions around housing, the health of children, and the education of children, for example; and the delivery of services. These two arms are quite difficult to meld together in any joint planning arrangements. The joint strategic needs assessment will try to produce these two focused blocs, but it is actually quite difficult. I am sure I am not the only alumnus, or graduate, or perhaps I should say survivor, of joint planning arrangements. I am even a survivor of a health action zone. I know how difficult it is, and how many hours of work go into properly well-functioning joint planning arrangements, which can commit funds. It takes hours of time and extraordinary leadership from health and local authorities to make them work properly.

I am not sure that I think these health and well-being boards are an inspiration, as the noble Baroness, Lady Cumberlege, does. They are a bit of an improvement on what went before, but to work properly they are going to have to work very hard locally to get it right, and get the structures right. I think it would help enormously if they were working towards something real. For me the real thing would be the integration of the working of health and social care, both at the patient level and at the public health and well-being end of the population. Our Amendment 336 provides one option for a way of working together—an option that local organisations might want to take up. It is an idea, and I am sure that we can think of many others that would also fit the bill. I want these boards to be real and their functions to be made practically useful on the ground, so I support these amendments.

[Lord Patel]

My Lords, I have my name on these amendments. Of course, we have had an opportunity to discuss integrated care at length at other times. However, I agree that integrated care and the delivery of it is one of the key challenges in the Bill. I agree with what the noble Lord, Lord Warner, said. To a patient, integrated care is the care they need: primary care, secondary care, social care and care in the community.

What leverages will there be for the commissioners to promote the integration of health and social care? They will have the budget, but what other incentives will they have? There is some evidence that contracting of provision of care to a population, particularly the elderly, the frail and those with complex diseases, will require much more care but also use more resources and services. It is not only value for money, but improved patient experience and patient outcomes. How will the commissioners be encouraged to do this? Does the Minister think that three separate outcomes frameworks in health, social care and prevention will help or hinder integration of care? There is also an issue about who will lead this change, if we think that this is the key challenge in the Bill. I agree that putting a clear definition of what we mean by integration, or what a patient means by integration, into the Bill will give a clear message to all those who commission and deliver the care, to know exactly what they have to do.

[Baroness Pitkeathley]

My Lords, my name is on Amendment 332. As other noble Lords have said, the Committee hardly needs reminding of our previous debates about the integration issue, or of the importance of health and well-being boards to the interests of patients. It is too easy, as the noble Lord, Lord Warner, has reminded us, for those delivering care to think that they are delivering an integrated service, because they are talking to each other—although it is not as common across services, in fact, as we might like to think—or because they are making joint plans, or they have made some kind of structural change, to give a nod to integration. What matters is how the services are received. Are they received by the patient in a way that is coherent and co-ordinated to the patient and to their family and carers?

The services will be delivered by a variety of providers—more, it seems to me, than the two arms the noble Baroness, Lady Murphy, reminded us about; that is, not only by health and local authorities but also by third sector organisations, particularly for those with long-term and chronic illnesses; by charities, by social enterprises and of course across the private sector. However the health and well-being boards end up being constituted in a particular area, it seems to me that some of the members at least will be patient representatives. They will be in an ideal position to monitor the patient’s response to service delivery and that it is indeed being integrated across all those services. It is very good news that the Future Forum is now working on integration. Will the Minister assure the Committee that the report, which I think he said would be available in January, will be available to the House by the time of our Report stage?

13:00

[Baroness Barker]

My Lords, my name is not on these amendments, but I want to make a couple of points, partly because I have a longstanding interest in this and partly because in recent weeks it has been a very personal feature in my life.

The noble Lord, Lord Warner, is absolutely right to keep pressing the Government to come up with a definition of integration. Like him, I struggle to know what it is. I know the factors that should be focused on, which create or prevent integration. One is the overall sense of purpose in your work. For many of the health and well-being boards, the key role will be in the prevention of illness. The biggest challenge for hospitals and the acute sector, which perhaps they have not yet woken up to, in the way in which they are going to have to work with health and well-being boards is about discharge from hospital and ensuring that people who have been ill, particularly older people, have access to nursing care in the community that enables them to live with long-term conditions.

One of the most important factors is money. The noble Baroness, Lady Murphy, made me flash back to many a meeting that I have been involved with, but one in particular in a borough in south London where the local Age Concern had an excellent handyperson scheme. They worked with the OTs to dramatically speed up the process of older people being assessed and given aids and adaptations that enabled them to live with long-term conditions. I well remember sitting in the meeting when somebody from the health service announced that the health service were going to start their own rival service. Why? Because a pot of money had come along and they were going to use it. Patterns and flows of money have been the bedevilment of integration, very often.

Integration can work well, particularly when both parties take a strategic view of what they are supposed to be doing. I cite again the case in Islington, when my colleagues were running the council. The local authority took the decision that it would do everything related to children and the PCT decided that it would take responsibility for adults and long-term care. That is a very imaginative way to start addressing problems at a strategic level. If you address them properly at strategic level, the greater the chance that when it comes to individual cases, you will indeed get integration of services around a person.

I am therefore pleased to see Amendment 336, tabled by the noble Lord, Lord Warner. I would just query one point with him on drafting. As drafted, there is a slight problem, because it seems to imply that any move towards integration has to be approved by the commissioning board. I know that is not what he intends. Small-scale schemes should just go ahead without reference up the line, so I think he needs to look at the wording, but that is very helpful.

The noble Lord, Lord Patel, is absolutely right. Three different outcomes frameworks setting the agenda for the three different parts of what will make up a health and well-being board is wrong. It is only when people in the NHS understand that they have to help social care outcomes to happen that we are really going to move forward towards integration as a mindset for professionals and a reality for patients.

[Lord Warner]

Could I just clarify for the noble Baroness that I do not claim that my wording is perfect? I brought the National Commissioning Board in—slightly against my better judgment, I have to admit—because it has the responsibility for, in a sense, approving the commissioning arrangements and spending the money. My instincts were that it would not support this unless it had been consulted and was satisfied with the commissioning arrangements.

[Baroness Thornton]

My Lords, I will be very brief because my noble friend and other noble Lords have pretty much covered the territory here. This small group of amendments is rather important and significantly improves the Bill. I realise that they are probing amendments, but they do three things. The first amendment is about changing culture. It talks about the manner of the integration of services, not just an integrated manner. The second one says that we need to define integration. This must be perhaps the third or fourth debate that we have had on integration in the past however many weeks. It seems quite clear that there needs to be some definition of integration in the Bill. My noble friend Lord Warner explained that. Given that many parts of the Bill offer a list of different ways in which things can be described and done, I see no reason why the same list on integration cannot be included. The third point in the amendment to which I was pleased to be able to put my name is about encouraging co-operation across the piece. Having the national Commissioning Board mentioned in that is rather important.

Those three points about changing the culture, defining what you mean and encouraging co-operation seem to me to be the type of message that any health and well-being board will look to as it starts up its work. It will look to what is in the Bill, what is in guidance and what is in statutory instruments to help it to work out what to do. To have something that defines the kind of culture that is expected, defines integration and the way the bodies should work, lists the bodies that should work together, if not in the Bill then certainly in guidance, and explains the manner in which they are expected to work seems to me to be a very helpful way forward.

[Earl Howe]

My Lords, these amendments from the noble Lord, Lord Warner, are primarily concerned with strengthening the role of health and well-being boards in promoting integration between health and social care and wider aspects. I completely understand why noble Lords have felt moved to support these amendments. They are undoubtedly well intentioned, but I am afraid that I have a problem with them.

Amendment 336, which I will speak about more fully in a second, could be seen to enable changes to be made to the fundamental responsibility for functions, which we are clear would not be right. Amendments 332 and 335 would also introduce a prescriptive definition of integration. I resist that idea not just because it would be counter to the principles of localism, which we believe are very important, but because it could act as a diversion from effective integrated working between commissioners. I do not see the need for a definition beyond what the clause already says, which seems quite clear.

We have a shared intent on the importance of integration, but I cannot agree that this cause would be aided by pinning down a definition in primary legislation. I see no need for that. Apart from anything else, having a definition set in primary legislation would risk creating inflexibility as times and practices change. We should focus on removing barriers on the ground to ensure integration. That is where the Government’s response to the Future Forum’s work will, I hope, make a difference. We aim to publish our response to the Future Forum’s report before the Report stage of this Bill.

I am sure that Amendment 336 is intended to be helpful, but it might create confusion between the arrangements mentioned in the amendment and those made under Section 75 of the NHS Act, which would enable local authorities and CCGs to enter into partnership arrangements such as lead commissioning and pooled budgets. Existing provisions in the Bill are designed to encourage and enable the NHS and local government to improve patient outcomes through more effective co-ordinated working. The Bill provides the basis for better collaboration, partnership working and integration across local government and the NHS at all levels. I hope that that, in part at least, answers the question posed by the noble Lord, Lord Patel.

Indeed, health and well-being boards will have a strong role in promoting joined-up commissioning between health, public health and social care. Through their duty to promote integrated working between commissioners, they will also be in a good position to promote more integrated provision for patients, social care service users and carers. They will also be able to encourage close working between the commissioning of social care, public health and NHS services and aspects of the wider local authority agenda that also influence health and well-being, such as housing, education and the environment. Through statutory guidance on preparing the joint health and well-being strategy, and the Government’s mandate to the NHS Commissioning Board, we will be encouraging lead commissioning and integrated provision.

There are enough levers and mechanisms in the system to encourage every part of the system to look for ways of joining up services, and the commissioning of those services. I hope that I have reassured noble Lords of our intentions, and that the noble Lord feels able to withdraw his amendment.

[Baroness Thornton]

If a new health and well-being board got in touch with the Minister, or perhaps with the Commissioning Board, and asked whether it would please say which form of integration it should be using or how it should be doing this, would he tell it to work it out for itself?

[Earl Howe]

My Lords, we have to give credit to people on the ground to be the professionals that we know them to be. Integrated working can take many forms, as we have discussed quite often in Committee. I will not rehearse the various manifestations of integration. Once we have mandated the duties in the Bill and issued statutory guidance on what good practice looks like, I really think that it will be up to people on the ground to decide how best to set about fulfilling the duties and expectations placed on them.

[Baroness Williams of Crosby]

I will pursue for a minute mechanisms for an early decision. I do so because the health and well-being boards will obviously be new and will be moving into a relatively new structure in their relationships with the medical and clinical CCGs, and they might not realise that this could happen rather quickly. No one is thinking of laying down the law, but a mechanism under which they are reminded that this could arise quite suddenly at an early stage and that they therefore need a structure that enables them to react quickly is an important feature of what the noble Lord, Lord Warner, was arguing.

[Earl Howe]

This is exactly why we have established the early implementer health and well-being boards. These cover virtually the entire country; a very small number are not yet in existence. I can tell my noble friend that local authorities have seized this opportunity with alacrity and are getting to grips with just the kind of issues that she has in mind.

We have a lead-up time available to enable the boards to consolidate the learning that is undoubtedly going on and the dialogue that is taking place with the pathfinder clinical commissioning groups. We are supporting that process from the centre. I hope and believe that by the time the health and well-being boards go live they will be in a very good position to hit the ground running.

11:29

[Lord Warner]

My Lords, I am grateful to all noble Lords for the support that they have given, and indeed am gratified by it. I hear what the Minister says, but we have been talking about integration for 25 years. You have to be one of life’s supreme optimists to think that just because the Government have passed this Bill you are going to change the culture of 25 years. It is very important that we try to have a go at a definition in this Bill. I will read very carefully what the Minister has said but I can assure him, as a Christmas present, that I shall be returning to this subject on Report, after taking some soundings at the local level. He is quite right: we do need to be sure what people at the local level want, but I do not think that we can move away from trying to give a lead on what we mean by integration. In the mean time, I beg leave to withdraw the amendment.

Amendment 332 withdrawn.

Amendments 332A to 335 not moved.

Clause 192 agreed.

Amendment 335A not moved.

Clause 193 : Other functions of Health and Wellbeing Boards

Amendments 336 to 336A not moved.

Clause 193 agreed.

Clauses 194 and 195 agreed.

Clause 196 : Supply of information to Health and Wellbeing Boards

Amendments 336AA to 336C not moved.

Clause 196 agreed.

Clauses 197 and 198 agreed.

Amendment 337

Moved by

[Baroness Finlay of Llandaff]

337: After Clause 198, insert the following new Clause—
“Health Service Ombudsman for England and Health Service Ombudsman for Wales
All patients receiving care from an organisation that receives any funding from the NHS shall have the right of complaint to the relevant health service ombudsman.”

[Baroness Finlay of Llandaff]

My Lords, this Bill in vast part concerns England only. This amendment concerns both England and Wales. I have tabled it to try to clarify an area in the role of the ombudsman which is currently not clear. Having spoken to the ombudsman in Wales at length about this, and discussed it with the ombudsman in England, with the emergence of any qualified provider and a range of licensed providers in this system, it seems that there is a need to clarify the role of the ombudsman, to make sure that patients have a final port of call when the complaints system has failed them.

I will quote from the Complaints and Litigation report of the House of Commons Health Committee from the previous Session. It states:

“Many people see the role of the Ombudsman as a general appeals process for the complaints system, but the remit under the Health Service Commissioners Act is much narrower than that. The Committee is of the view that a complainant whose complaint is rejected by the service provider should be able to seek independent review. The legal and operational framework of the Ombudsman’s office should be reviewed to make it effective for this wider purpose”.

The Health Service Commissioners Act 1993 set out the principle that the ombudsman should be able to investigate an issue if the provider was providing services,

“under arrangements with health service bodies or family health service providers”.

The Public Services Ombudsman for Wales was established in 2005, and also has a responsibility for cross-border work. Last year, however, there was an investigation into a children’s hospice in Wales which revealed the ombudsman’s difficulty when investigating an organisation that provides services for and on behalf of, and receives funding for providing services to, patients in an area but which does not fall under the NHS jurisdiction in any way, and simply has a contractual service-level agreement. The report from the ombudsman in Wales states:

“The Ombudsman does not have jurisdiction for the hospice and was unable to investigate Mr & Mrs A’s concerns about the hospice’s actions”.

It goes on to say:

“The Ombudsman commented on his lack of jurisdiction for the hospice, and that there was no other independent body able to investigate Mr & Mrs A’s concerns about the hospice. This is profoundly unsatisfactory. The Ombudsman asked the Welsh Assembly Government to consider what action it could take to bring the hospice into his jurisdiction”.

Hospices are just one area of provision. They are well known, and it is very unusual for there to be complaints in hospices. However, they do occur, and it seems that those using the services of any independent provider in such a way should have the same right of redress as if they were in an NHS facility. The purpose of the amendment is to simply clarify that wherever a patient is being treated, if the NHS has any interest whatever—if this patient is being treated as part of an NHS provision —it should come under the remit of the ombudsman to investigate should the ombudsman feel it is warranted.

I looked back through the report of the Health Service Ombudsman for England and noted that there were 325 complaints last year that did not fall into the remit because they were for privately funded healthcare. This amendment does not ask that the ombudsman’s report should necessarily cover privately funded healthcare. In all honesty, however, if somebody is receiving healthcare, however it is funded, and if that is part of our licensed, inspected and regulated system in this country, where it goes seriously wrong and those bringing a complaint feel it has not been handled satisfactorily, my own view is that we have a national duty to be able to investigate. In doing so, we may find that our inspection processes have failed and that our regulatory processes are not functioning as they should.

That is the background to what might seem a very simple amendment. I really hope the Government will look kindly on it, because having discussed it and its wording in detail with the ombudsman in Wales, I know that it is certainly supported there. I also know that it is not opposed by the ombudsman in England.

[Baroness Williams of Crosby]

My Lords, the combination of the noble Baroness, Lady Finlay, and the noble Lords, Lord Walton of Detchant and Lord Wigley, is a pretty powerful triad by any standards. I express my support for what the noble Baroness said. We have seen some remarkable work done by the ombudsman for England—who I think is retiring from her post—particularly in respect of the care of elderly people. It has been very important in giving the public a sense that they have access to the highest levels when they have a complaint.

My only concern about this amendment is that it is very important indeed that as far as possible complaints are dealt with by health and well-being boards locally, because very often local knowledge is crucial in understanding why something has gone badly wrong. I always think it is significant that the ombudsman for England has been most effective when she has written reports that cover an area. When it comes to a personal complaint, very often it is the local level which is the appropriate one to deal with it. More than that, very much part of the education and understanding that a health and well-being board can bring to the whole issue of patient responses and patient care in the NHS is that people should at least see the local level as the first point of complaint. Having said that, it is obviously important that there is a final, as it were, court of appeal —I do not mean that in a legal sense of the word —and that is what the ombudsman ought to be. Clearly he or she should be independent of any particular interest in the health service, and I agree with the noble Baroness, Lady Finlay, that it should apply across the board to all providers whether private, voluntary or within the NHS structure.

With those few words, I support the amendment and think it is an important one. However, I emphasise that the starting point should always be, wherever possible, at the local level, and that the ombudsman should be seen as the last and final resort.

[Baroness Wheeler]

My Lords, I support this amendment from the noble Baroness, Lady Finlay, and I am grateful to her for explaining its context and background so clearly. The Parliamentary and Health Service Ombudsman is currently excluded from investigating complaints about the health service in Wales, so this amendment will ensure that the role of the Public Services Ombudsman for Wales, in investigating complaints against local health boards, NHS trusts, GP services and community health councils in Wales, is recognised and included in this Bill.

Ensuring that the Public Services Ombudsman for Wales has the legal right to share complaints reports with people he or she considers appropriate is a minor but important amendment and safeguard. I look forward to the Minister’s response.

[Baroness Northover]

My Lords, the amendment links to an important point of principle which we wholeheartedly support: that any patient or person who receives NHS-funded treatment or care, whether the treatment or care was provided by an NHS or private provider, should have recourse to the Health Service Ombudsman, should their complaint not be resolved through the NHS complaints arrangements at a local level. I assure my noble friend Lady Williams that that is the first stage.

I reassure noble Lords that these types of situation are already provided for in law. I wish to address directly what the noble Baroness, Lady Finlay, has raised, which is the situation in Wales. The Public Services Ombudsman for Wales recently called for his office to be given more power to independently investigate hospices. This follows complaints from the family of a teenage girl who died of leukaemia, about the way their concerns over her care were handled. The ombudsman pointed out that he had no power to investigate the family’s complaints against the hospice, although it received public funds, as it did not fall into the same category as a hospital or a council-run service.

In response to a report published by the Public Services Ombudsman for Wales in 2011, we understand the Welsh Government are looking into extending the ombudsman’s remit, to enable him to investigate complaints about hospices and hospice services, as well as extending the existing complaints advocacy arrangements to cover complaints about hospices.

I therefore hope that the noble Baroness will be reassured by what I have been able to say, in that regard.

[Baroness Finlay of Llandaff]

I seek a little clarification. If I have understood right, the noble Baroness said that any provider is covered by the Health Service Ombudsman in England, and any cross-border provision would also be covered by the Public Services Ombudsman for Wales, irrespective of who that provider is. Therefore, the only change needed in primary legislation is to the remit of the Public Services Ombudsman for Wales, to make sure that the remit for non-NHS providers is extended within Wales; but that otherwise all patients, wherever they are in England, wherever they have come from and irrespective of the provider, have recourse to the NHS ombudsman. I suppose the same should apply to Scotland as well, though there is not the same cross-border flow.

[Baroness Northover]

To clarify, I say that all care paid for by the NHS in England is covered—that is the crucial thing. My noble friend Lady Williams also mentioned other care that might be covered. Whoever provides the care, the crucial thing is who pays for the care. Even if there is a private provider or a voluntary provider as well as an NHS provider, if the NHS is funding that care it comes under the ombudsman’s responsibility.

13:19

[Baroness Finlay of Llandaff]

I do not want to detain the House much further, but I think this is something we need to discuss, and probably away from the Floor of the House. One of the issues about hospices is that their care is not fully funded by the NHS: it is only partly funded. Some providers receive grants to provide care because they are mostly charitably funded, partly NHS-subsidised and helped—but it is not that the NHS is paying for that complete package of care. That is where the confusion and the difficulty lie. It would be helpful if we could unpick this later and see whether we need to return on Report with a very small amendment, so that we can make quite sure that the system is watertight for all patients.

[Baroness Northover]

I am very happy to take up the noble Baroness’s suggestion that we discuss this further. I hope she will be reassured by what I can say about Wales. However, if there is a company, for example, that is providing care partly within the NHS funding, the ombudsman would not cover the rest of what they are doing. It could lead to confusion if that were the case. I mean the NHS-funded part of care. However, I am very happy that we should discuss this concern further. I hope that on that basis the noble Baroness will be willing to withdraw her amendment.

[Baroness Finlay of Llandaff]

I am grateful to the Minister for that reply. On the basis of that and of further discussions, I beg leave to withdraw the amendment.

Amendment 337 withdrawn.

Clauses 199 to 202 agreed.

Amendment 337A

Moved by

[Lord Clement-Jones]

337A: After Clause 202, insert the following new Clause—
“Power to regulate pharmacists
(1) The Medicines Act 1968 is amended as follows.
(2) After section 58(6) there is inserted—
“(7) Subsection (2)(a) does not apply to the sale or supply of a medicinal product by a person lawfully conducting retail pharmacy business where the sale or supply is in accordance with a prescription and, having exercised all due diligence, believes on reasonable grounds that those requirements have been fulfilled.
(8) The activity under subsection (7) shall be regulated by the General Pharmaceutical Council.
(9) The General Pharmaceutical Council may take what steps it considers necessary under section 6(1) of The Pharmacy Order 2010 (S.I. 2010/231) in relation to a person who performs an activity referred to in subsection (7).”
(3) After section 64(5)(b) there is inserted—
“(6) Subsection (1) does not apply to the sale or supply of a medicinal product by a person lawfully conducting retail pharmacy business where the sale or supply is in accordance with a prescription and that person selling or supplying the product, having exercised all due diligence, believes on reasonable grounds that those requirements have been fulfilled.
(7) The activity under subsection (6) shall be regulated by the General Pharmaceutical Council.
(8) The General Pharmaceutical Council may take what steps it considers necessary under section 6(1) of The Pharmacy Order 2010 (S.I. 2010/231) in relation to a person who performs an activity referred to in subsection (6).”
(4) After section 85(5) there is inserted—
“(6) Subsection (1)(a) to (c) does not apply to the sale or supply of a medicinal product by a person lawfully conducting retail pharmacy business where the sale or supply is in accordance with a prescription and that person selling or supplying the product, having exercised all due diligence, believes on reasonable grounds that those requirements have been fulfilled.
(7) The activity under subsection (1) shall be regulated by the General Pharmaceutical Council.
(8) The General Pharmaceutical Council may take what steps it considers necessary under section 6(1) of The Pharmacy Order 2010 (SI 2010/231) in relation to a person who performs an activity referred to in subsection (6).”.”

[Lord Clement-Jones]

My Lords, the amendment has been tabled with the support and assistance of the Royal Pharmaceutical Society and has been designed as a new clause that amends the Medicines Act 1968. It is also designed to increase patient safety by removing barriers to a learning culture across the prescription dispensing process, and to remove the injustice that pharmacists alone, among healthcare professionals, face through criminalisation. Single dispensing errors should be treated in a proportionate way that retains the ability to prosecute those who have been negligent or who have committed a deliberate act but that does not penalise pharmacists who wish to declare a dispensing error in the interests of patient safety.

The role of pharmacy continues to be vital to communities throughout England. Pharmacists are at the forefront of providing advice to patients in an increasingly high-pressure environment. In 2010 nearly 927 million prescription items were dispensed in England. This is a 4.6 per cent rise on 2009 and a 67.9 per cent rise on 2000. Despite this, the error rate of dispensing remains minuscule.

What is the background to the current state of the law? Sections 58, 64 and 85 were inserted into the Medicines Act 1968 to regulate the quality of medicinal products being manufactured in pharmacies across the country. There were concerns that the production of these items, primarily creams and solutions that could be prepared to suit to individual needs of patients, required a legal standard of purity. Nowadays, the practice of creating preparations in community pharmacies is practically non-existent. However, these sections of the Medicines Act have been used in a way that they were not originally intended for: to prosecute a pharmacist who makes a single error while dispensing a medicinal product. The law as it stands makes a single error an automatic criminal offence that is punishable by up to two years in prison.

Why should we support this amendment? Currently, pharmacists are expected to declare dispensing errors in the knowledge that they will face prosecution if they do not do so. Clearly, any person who is either wilfully negligent or deliberately acts in a way to harm a person must face prosecution under criminal laws. This amendment would allow that to continue but would also enable a proportionate response for those who make an error. Minor errors should be learnt of and dealt with through improved practice rather than through discouraging healthcare professionals from feeling able to report errors. Decriminalising dispensing errors will be beneficial to patients and the pharmacy profession through the creation of a culture of learning.

The current system goes against the spirit of openness in which pharmacists and other healthcare professionals should be allowed to work, so as to enhance patient safety. This amendment, or something similar, is the right way in which to tackle this important issue. The passage of the current Bill presents an opportunity to tackle this, and one that should not be missed. I beg to move.

[Baroness Finlay of Llandaff]

My Lords, I support the amendment. It raises a very important issue, namely what happens when an error occurs. At the moment, there is an enormous disincentive for the pharmacist to do what one would say is the right thing, which is immediately to contact the patient, or their family, carer or nursing home, to try to put an immediate stop to the further use of that medication and to do all they can to correct the error. In the law as it is written at the moment there is an in-built incentive to a pharmacist to attempt a cover-up, to weigh up whether the error is a major or minor one or one which they might just get away with, or perhaps even to make a phone call that fudges the issue and tries to cover up the fact that they have made a dispensing error, and to reclaim the medication in another way.

In addition to the importance of a spirit of openness, there is an actual safety issue here. We know from looking at medicine and nursing that when you make it easier for people to admit immediately that they have made an error and to do all they can to correct that error, they are much more likely to handle things in an open and honest way and to learn from it. Certainly I say to all my junior staff, “I know that you will make mistakes. The only thing that I will hold against you for the whole of your career is if you do not immediately notify whoever is the consultant covering you at the time. Mistakes will happen, but you must let people know immediately and take every step to correct them”. I do not see why we should be treating pharmacists in law in a way that works against that type of principle and which is inappropriately punitive.

[Baroness Pitkeathley]

My Lords, I, too, support this amendment. I remind the Committee of my role as chair of the Council for Healthcare Regulatory Excellence, which has an oversight role with the General Pharmaceutical Council. We believe that single dispensing errors should be treated in a proportionate way that still prosecutes those who have been negligent or have committed a deliberate act but does not penalise pharmacists who want to declare a dispensing error in the interests of patient safety—and I very much agree with the noble Baroness, Lady Finlay, that this is about patient safety.

In the interests of patient safety and public protection, we of course expect the regulator to be able to co-operate with other agencies if it is aware of a pattern of repeated single-dispensing errors that might reflect wilful and deliberate acts with the intention of harming patients. In those circumstances, there would of course still be recourse to criminal prosecution. With these exceptions, I very much support this amendment.

[Baroness Jolly]

My Lords, I, too, support this amendment. I have some personal experience that I can bring to bear, and it was not until I was reading through the amendments a week or so in advance that I put these things together. Some years ago my mother became really ill with a very strange set of symptoms and no one could work out what the problem was. Eventually her GP came round. Like many people of that age, she takes several drugs. He sat down on her bed, took out her box of drugs from her bedside table drawer and went through them. There was one drug that she should not have been taking at all. It was completely wrong and should have been taken sparingly, not three times a day. My mother lives in a small town and the GP knows the pharmacist well, so he high-tailed down to him straightaway to find out what exactly the issue was. In this case, the dispensing pharmacist was unaware that there was a mistake.

It was really quite interesting to see how it had all happened. The medicines were all stored on a shelf in alphabetical order by drug name, not brand name. The drug in question was adjacent to my mother’s normal drug, and both were generics produced by the same pharmaceutical company. The narrow little rectangular boxes looked the same, so the pharmacist had picked the wrong one off the shelf, popped it into the bag with the rest and it had gone home. My mother, whose sight is not what it was, had taken them all out of their boxes and popped them all into her pill box. The deal was done, it was really very easy, and the whole thing was completely indistinguishable.

Fortunately my mother recovered once it was sorted out. It was a regular, well-known, high-street pharmacy, and it was absolutely excellent. It wrote a letter immediately saying that it was going to instigate a clinical governance review. It then wrote again to tell us exactly what it had done, including changing its methods of storage and ensuring that someone double-checked all drugs before they were bagged-up. This had been a mistake, but there is absolutely no doubt that it was completely negligent, and also avoidable. However, it was not criminal. There was no malicious intent. It could have been terrible, but mercifully it was not. The employer spoke to the pharmacist who admitted exactly what she had done once they had worked it all out. The pharmacy took proportionate discipline, and that is what we as a family wanted. We wanted something to happen, for it be arranged that the mistake could not happen to anyone again and for anything that happened to be professional and proportionate. That is what happened. As a result, I totally support the amendment that my noble friend has tabled with the support of the Royal Pharmaceutical Society.

[Baroness Masham of Ilton]

My Lords, I shall add a few words because a pharmacist contacted me. Pharmacists are being encouraged to take on more and more, and the drugs are extremely difficult. Some drugs are the same but have different names. It is extremely difficult for patients too, and as they often go to pharmacies for advice it is really very important there this is openness and honesty when a mistake is made. However, I would not like this amendment to open a door for more mistakes to be made.

[Baroness Thornton]

My Lords, I support the amendment. I would have put my name to it, had I had the opportunity. However, in Committee those on the Liberal Democrat Benches have tended to block up their own amendments and have not sought support from across the House, which is a great pity.

My experience in dealing with the many drugs that my mother takes is that in fact pharmacists are often those who spot the doctor’s mistake. Our local pharmacists do an excellent job. My wider interest in this Bill and in pharmacists is that they play the proper, important role they need to play at local level in the health and well-being boards and with the planning at a local level of both preventive medicine and their jobs at dispensing.

This is also about a level playing field in regulation, which is very important. This Bill offers probably the only opportunity that there will be in the next few years to put right this wrong. I hope, therefore, that the Minister will support this amendment—and if not this one, then one like it at a later stage in the Bill—and rectify this error.

13:45

[Earl Howe]

My Lords, the amendment relates to an important issue: the concerns among pharmacists about the risk of prosecution where they normally follow good professional practice but make an inadvertent dispensing error. I am very grateful to my noble friend for raising this issue. I warmly welcome the opportunity to discuss it and have been listening carefully to the points made.

We are on the record as saying that we intend to take legislative action to address the issue. We want to see a learning culture that encourages the reporting of dispensing errors so that any helpful lessons can be learnt. The noble Baroness, Lady Finlay, was quite right about that. However, we need to make any changes in ways that continue to protect patients under the law. The noble Baroness, Lady Pitkeathley, drew our attention to that aspect.

Section 64 of the Medicines Act 1968 provides that,

“No person shall, to the prejudice of the purchaser, sell any medicinal product which is not of the nature or quality demanded by the purchaser”.

This is a strict liability offence, and contrary to what my noble friend stated it does not relate only to pharmacists. Various other healthcare professionals could be affected, as well as other parties who are not subject to professional regulation. Guidance issued to government prosecutors in 2010 has been helpful, but we recognise that it does not remove the underlying problem.

My noble friend is to be commended for raising this issue, but the terms of the proposed amendment present a number of problems that we would need to work through before an appropriate drafting solution could be found. It does not cover other healthcare professionals affected by the current legislation, and in relation to pharmacy it covers only a proportion of pharmacy activity—retail pharmacy—and only where a pharmacist is responding to a prescription. The amendment does not address the different arrangements for the professional regulation of pharmacists that apply in Northern Ireland. There is also some ambiguity as to how it would be determined in practice: that is, whether a pharmacist would be subject to the revised provisions in this amendment. The amendment extends beyond Section 64 and would also change Section 58, on prescription-only medicines, and Section 85, on the labelling of packages and containers of medicinal products, of the Medicines Act 1968.

The legislative ramifications of the issue are therefore quite complex, and I am sure my noble friend will appreciate that we need to get this right. However, let me assure him that we have listened very carefully to the debate and the representations made to us, and that we will continue to work with all relevant parties to find a solution. I also wish to reiterate our commitment to bring forward a suitable legislative change at the earliest possible opportunity. I hope that with those assurances my noble friend will feel able to withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for his response. I also thank all noble Lords and noble Baronesses who have spoken in the debate. I should at the outset have declared an interest as chairman of the council of the School of Pharmacy. My noble friend the Minister has pointed out, quite rightly, that the amendment as drafted only covers the pharmacy profession. He has also pointed out a point picked up by almost all the speakers in the debate, namely that the essence of the provision is the ability to admit and correct error, which is vital in these circumstances.

I welcome very much the forensic way in which the Minister responded to the amendment. I did not think that it was the kind of amendment that would cause Ministers to throw their hands up in the air and say, “Wonderful! We will put this in the Bill”. It needs refining. One of the key issues is that it currently only relates to retail pharmacy. Obviously, it should cover hospital pharmacy as well. There are also issues about Sections 58 and 85 in Northern Ireland.

The Minister has assured us that he has listened very carefully and that he intends to legislate at the earliest possible opportunity. That phrase was very carefully chosen, I am sure, as my noble friend always chooses his words extremely carefully. If the Minister would indicate that, if humanly possible, this will be inserted either on Report or at Third Reading—as the Bill provides a very good opportunity to include reform—I think that the pharmacy profession and others which, as he said, are subject to this kind of disproportionate criminal liability will be extremely happy. I am sure that they would be very grateful to the noble Lord if he could make sure that that was the case. The Minister is not indicating that he is going to say anything further—but maybe he will.

[Earl Howe]

My Lords, let me simply say that my noble friend’s exhortation has been very firmly registered.

[Lord Clement-Jones]

My Lords, the Minister chooses an even more felicitous phrase. I thank him, and I look forward to further progress during the course of this Bill. In the mean time, I beg leave to withdraw the amendment.

Amendment 337A withdrawn.

Clauses 203 to 205 agreed.

Amendment 338

Moved by

[Baroness Emerton]

338: After Clause 205, insert the following new Clause—
“Power to regulate health care support workers in England
(1) The Nursing and Midwifery Order 2001 (S.I. 2002/253) shall be amended to provide that all health care support workers in England shall be registered by the Nursing and Midwifery Council and regulated in accordance with the terms of that order.
(2) For the purposes of subsection (1), a health care support worker shall be an individual whose work is routinely delegated to them by a registered nurse or midwife or has a qualification in health and social care at level one (or higher) of the Qualifications and Credit Framework, in England.”

[Baroness Emerton]

My Lords, I shall speak to this amendment in my name on the power to regulate healthcare support workers, which is supported by the Royal College of Nursing. I begin by declaring an interest: I am a retired nurse, nurse tutor and manager; former chair of the nursing, midwifery and health visiting regulating body, the UKCC; and past chair of an NHS trust.

I start by looking back to the Bill’s beginning and its aim to improve the quality of patient care at every level of the NHS and to integrate social care, providing holistic care with clearly defined care pathways. The three constituents, as we know, to improving care are improving clinical outcomes, the safety of the patient and a good patient experience. The current situation is that, almost daily, a report is made of essential care being below an acceptable standard, or of poor hygiene, poor hydration, poor nutrition and poor personal care, with staff not even washing patients, making them comfortable or listening to their immediate anxieties. Where healthcare support workers move into areas of work beyond their competence, questions have to be asked about the safety of patients. For example, if a healthcare support worker is left to give drugs without supervision, this is an unsafe practice and a danger to the patient. The responsible person is the registered nurse, who is accountable for delegating any area of practice to the healthcare support worker.

However, the growth in numbers of healthcare support workers dates back a long way and those numbers continue to rise. Over time, there has been a variation of titles, roles and functions, and there have been calls for regulation by the Royal College of Nursing since 1999, when Project 2000 was introduced and the enrolled nurse training was phased out. The reason given for phasing out this training, and the case for change in moving nursing to higher education, was that the rapid developments in medicine and technology led to a need for registered nurses to have a more detailed knowledge to equip them to be fit to the level of practice required—that is, to have a degree qualification. Holistic care of patients demands a correlation of knowledge and practical application that meets the total physical, mental and spiritual needs of patients, their relatives and friends.

Degree courses contain 50 per cent theory and 50 per cent supervised practice. Enrolled nurses had played a very important part in the delivery of care, but they were being abused and misused by being placed in charge of acute wards at night, and taking on roles that their training had not equipped them for. We face the same situation today, where healthcare support workers are abused and misused by being expected to take on roles they have not been prepared for, and are left unsupervised.

This raises three important issues. First, there is the role of the registered nurse, who dedicates and supervises the healthcare support worker. The problem is that if there are not enough registered nurses to supervise, then they become unsupervised. We know from the recent inquiry into Mid Staffs that in order to change the finance situation there, the ratio of registered nurses to untrained nurses was reversed from 60 per cent trained to 40 per cent untrained, to 40 per cent trained and 60 per cent untrained, leaving the registered nurse with a much larger task in supervision.

The role parameters within which the healthcare support worker works, and the preparation they have had, need to be looked at. Who sets the code of conduct—the employer, or the profession of nursing, midwifery and social care? Recent inquiries into failing healthcare systems have pointed to a range of causes, from trust boards and their executive and non-executive members, to the bedside and the delivery of care—that is, registered nurses and unregistered healthcare support workers.

The most recent inquiry was at Mid Staffordshire, which I have already mentioned. Not only was an inquiry held to identify the failings; there was a further inquiry, on the demand of the public, to discover the root causes. Events this year at Winterbourne View, a unit for those with learning disabilities, resulted in a number of healthcare support workers being arrested, and a registered nurse went before the NMC for a hearing on fitness to practise. Inquiries in the 1960s at Ely, Farleigh, Whittingham, Normansfield, and more recently at Stoke Mandeville and Maidstone and Tunbridge Wells trusts, all demonstrated failing systems of care delivery, the involvement of all levels of care staff, and an overall lack of leadership from the board to the bed in maintaining delivery of high-quality care.

How can Her Majesty’s Government allow the NHS to continue a system that has been proven to fail? The public and patients deserve—and have the right to expect—high quality and safe delivery of care. The Royal College of Nursing has been pressing the Government since 1999 to address this issue, and it continues to do so, recognising the complexity of the issue and that there have been some attempts to rectify an unsatisfactory situation. The chairman of the Royal College of Nursing healthcare support workers group sat in on the debate on front-line nursing on 1 December in this Chamber, and pleaded with me afterwards to ensure that regulation of support workers would be taken on by Her Majesty’s Government.

The way in which the assistant nursing practitioner level 4 healthcare support worker has been introduced under Agenda for Change has identified and clearly set out the role parameters within which a healthcare support worker can work under the supervision of a registered practitioner, having reached a recognised but not regulated standard. However, this accounts for only a small number of the total healthcare support workers employed in the hospital and community setting. Further work could easily lead to mandatory training and registration by opening the second part of the Nursing and Midwifery Council register for this clearly identified group. That has been suggested in this House several times.

14:00

The Secretary of State, the right honourable Andrew Lansley, recently announced that Skills for Health and Skills for Care have been commissioned to develop a programme of training and code of conduct to set the standards and training for healthcare support workers. They are also to produce a voluntary register, not regulation. I welcome that the Government recognise that there is a problem which requires urgent addressing, but there are several factors that would need to be addressed if this proposal is to solve the problem.

A skill can be taught, but the deliverer of that skill will not necessarily have the background knowledge needed to take appropriate action. For example, only a few weeks ago a consultant who was visiting a patient asked the person who was taking and charting the blood pressure if she had been doing so all day. The answer was yes. The consultant then asked what the chart showed. She answered that the blood pressure was going down. Asked what that meant, she replied, “I don’t know. I’ve only been shown how to take blood pressure”. Asked if she had reported this to the registered nurse, she replied no. Asked if she had been asked to report any changes, she replied no. The consultant then explained that falling blood pressure in this particular patient indicated that her condition was deteriorating almost to the point of death. This illustrates that a skill without background knowledge is of no use in the delivery of high-quality care, and that supervision of this healthcare support worker by a registered nurse was missing. There are many more examples that could demonstrate this point.

Patients know that when they are approached by a doctor, he is a practitioner registered by the General Medical Council. Even if he is a junior doctor, he is accountable for his actions. However, there is no clarity as to whether the person carrying out a patient’s treatment is necessarily a registered nurse or a healthcare support worker. The colour of the uniforms is confusing, and healthcare support workers are often mistaken for registered nurses. Patients need to know by whom they are being treated. I welcome the invitation extended to the Nursing and Midwifery Council’s excellent chief executive officer, Professor Dickon Weir-Hughes, to participate in Skills for Health. He can bring to the table the statutory functions of the regulatory body, its responsibility towards fitness to practise of registrants and its leadership role.

This is a complex set of issues, but it is vital to the safety of patients. I refer to the research evidence on the ratios of trained to untrained staff that I gave in a debate on Amendment 138 on 29 November in Committee, and to a further reference in a debate on front-line nursing two days later. It demonstrates that the higher the ratio of registered practitioners to non-registered healthcare support workers, the higher the quality of holistic care, resulting in good clinical outcomes, quicker discharge and fewer readmissions with good patient experience. This in turn leads to lowered mortality and morbidity rates, and as a result a possible reduction in hospital beds. This should be taken into account.

I am most appreciative of the Minister for undertaking in his summing-up of that front-line nursing debate to take away the research findings for further study. The complexity of this whole situation, created by the proposed integration of health and social care in the Bill with more patients being cared for in the community, calls for urgent action to ensure that within the community setting there are sufficient registered nurses to maintain high-quality holistic care. The recent report of the Queen’s Nursing Institute contains figures showing that much needs to be done to raise the number of district nurses. The current work being undertaken to increase the number of health visitors and the Royal College of Midwives’ recent report on the number of midwives also have to be taken into account.

Working as a registered nurse in the community is very different from working as a registered nurse in the acute sector. Special training is required for working in patients’ homes, and is currently insufficient to take the huge influx of elderly, frail patients from hospital. I suggest that this requires an in-depth study of the workforce and training requirements, with a cost-benefit analysis, taking into account research evidence from this country, by Professor Anne Marie Rafferty, and from the USA, Canada and Australia. Meanwhile, during the course of the in-depth study, remedial action should continue to be taken to ensure that the healthcare support workers programme is in preparation. I would like to suggest that the issues surrounding the problems of integrating health and social care could be assisted by introducing a core programme as an induction to health and social care for healthcare support workers, followed by a branch for nursing and one for social care. This will not only equip healthcare support workers in the day-to-day delivery of care, but lead to a better understanding of the different cultures of NHS and social care working, both in the community and in secondary care, already discussed earlier this morning.

I find the proposal of a voluntary register totally unacceptable, unless it becomes a requirement for the employer to ensure that the employment of a healthcare support worker requires the evidence of satisfactory completion of the course, subject to the code of conduct. However, there would be nothing to prevent a healthcare support worker dismissed from his post going to another part of the country and being employed without having to go through a fitness-to-practise procedure. It has to be appreciated that the NHS is not the sole employer of healthcare support workers. In fact, a higher proportion is employed in the independent sector, nursing homes and residential homes, where the safety of patients and residents is just as important. It would also be important to ensure that there is an opportunity for the development of healthcare support workers, so that they can progress in one of the health and social care professions.

I hope that I have set out the complexity of this situation, and I would ask the Minister to respond to the amendment, which the Royal College of Nursing vigorously supports, and to look at the regulation of healthcare support workers. I beg to move.

[Baroness Masham of Ilton]

My Lords, I have put my name to Amendment 338, as I strongly agree with the Royal College of Nursing that mandatory regulation for all healthcare support workers, in order to ensure standardised training and therefore a suitable skilled workforce, is the best way forward.

As currently proposed, the health Bill provides for a voluntary register, which the RCN believes to be insufficient. A voluntary register will not protect patients from inadequate healthcare workers, who will be impossible to regulate. I am concerned that nurses who have been struck off the register can then take jobs as unregistered healthcare assistants. One only has to look at the dangers patients have been put in when patients died of insulin poisoning at Stepping Hill Hospital near Manchester and nurses were found to be stealing drugs, at the terrible suffering of patients at the Mid Staffordshire foundation trust and at the appalling treatment of residents at the Winterbourne View care home near Bristol. The latest reports from the Audit Commission, the Patients Association and the CQC highlight further problems with care of the frail and elderly. Is there not enough evidence to make the Government realise that something positive has to be done to make matters safer and better for patients?

I agree with the Royal College of Nursing that it is vital to quality patient services that anyone who is responsible for delivering care should be regulated and accountable for their actions. I received a letter recently from someone living in Malta, who said that in the state hospitals they have colour-coded uniforms for all the staff. Care assistants are clearly distinguishable in maroon and white. We have to get our house in order for the sake of patients, who seem to be becoming more and more vulnerable, rather than safer.

House resumed.

14:10

Sitting suspended.

Thames Tunnel

Monday 19th December 2011 Lords Chamber

Question

14:30

Asked By

[Lord Berkeley]

To ask Her Majesty’s Government what discussions they have had with Thames Water about the increase in lorry traffic in London caused by the construction of the Thames Tideway Tunnel.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)]

My Lords, we have regular contacts with Thames Water on all aspects of the tunnel proposal, including its strategic approach to transport. Details on lorry movements are a matter for the project sponsor, Thames Water, and are included in its current public consultation. Final proposals will be in its planning application, expected in autumn 2012. The planning process ensures that environmental factors such as transport impacts will be considered.

[Lord Berkeley]

I am grateful to the Minister for that reply. He is certainly right that, in its second consultation, Thames Water has reduced the volumes of lorry traffic by half by agreeing to transport the spoil by river, which is about half the total. However, is he aware that in Network Rail’s construction of Blackfriars station most of the materials, not just the spoil but other construction materials as well, are coming in by river? I am sure the Minister will agree that that is very commendable, given the traffic jams around there. What will he do to try to persuade Thames Water to do the same for that very much bigger project, including bringing in tunnel linings, concrete and things like that by river?

[Lord Taylor of Holbeach]

My Lords, the noble Lord has great experience in tunnelling and engineering, which I respect, and I share his view that the river is a great London resource that should be optimised and used for such occasions. It is important to emphasise, however, that at the moment the project is undergoing a consultative phase. There are guidelines on the use of rail and river for the movement of waste soil, for example, which are already laid down. I hope that any members of the public who have an interest in this matter will make their views known during the consultation period.

[Baroness Gardner of Parkes]

My Lords, is the Minister able to tell us whether he and Thames Water are aware of the great concern of local residents, many of whom I know, about the constant use of their streets in the area? Will there be limited hours of work? Will they have any respite during this work, which I must say is very important for the future of London?

[Lord Taylor of Holbeach]

My noble friend is right to emphasise that there are local neighbourhood implications in any project of this size. As I have emphasised, the project is at the moment in consultation and it is very important that people who feel they may be affected make their point of view clear. Thames Water has estimated that there will be around 4.6 million tonnes of excavated material generated in the lifespan of the tunnel’s construction. The management of that lies with the principal contractor, who will have to abide by the planning conditions laid down when planning permission is granted.

[Lord Brooke of Alverthorpe]

My Lords, while I recognise that the planning process is still under way, could the Minister, who is very popular in the House, not agree with the view of my noble friend Lord Berkeley that, in addition to spoil, efforts should be made by the contractors to use the river more than they are doing at the moment? Could he not just simply drop a little Christmas note to them to that effect?

[Lord Taylor of Holbeach]

I am of course grateful to add to the House’s Christmas cheer, and this is a great opportunity to do so. I think I made it pretty clear that I saw the river as a great resource and that it would indeed make sense to use it for the shipment of materials, but in the end the process really is that Thames Water has to make the application. I have given a pretty strong steer as to what we expect of Thames Water and, indeed, of the contractors.

[Lord Bradshaw]

Does the Minister agree that, in view of the large number of accidents to cyclists in London, including, unfortunately, a lot more deaths this year, he should ensure during the process that a proper risk assessment is conducted on the means of both supplying material and taking it away?

[Lord Taylor of Holbeach]

The use of roads is very important, as is the way that goods are shipped. That is a hazard that needs to be taken into account before planning permission can be given.

[Lord Teverson]

My Lords, given the importance of bringing in materials, would the Government perhaps ask the construction authorities and Thames Water to look at the use of Cornish china clay spoils materials? They could be brought to London so that we could have the benefit here, while removing some of the spoils from Cornwall.

[Lord Taylor of Holbeach]

My Lords, that is an unusual suggestion, which even in my wildest moments I had not anticipated being asked. I am sure that anything that makes my noble friend feel more at home must be a jolly good idea.

[Lord Berkeley]

My Lords, I am grateful to the Minister for his reply and to the noble Lord, Lord Teverson, for suggesting the use of china clay waste—I live in Cornwall and it is dear to my heart. I wonder if I could press the Minister a little further, though. Half the materials may be transported by road, which would mean around 250 trucks a day. The noble Lord, Lord Bradshaw, has also mentioned the risk of accidents to cyclists and so on. Surely it would be a good idea for a planning condition to be put on this development saying that perhaps 90 per cent of all materials must come by river or rail.

[Lord Taylor of Holbeach]

As I have tried to emphasise, those terms ought to be set in the planning decision. It is not for us at this stage of the process. I have tried to make it clear that there will be consultation, planning and then the award of the contract.

Public Disorder: Uninsured Claimants

Monday 19th December 2011 Lords Chamber

Question

14:37

Asked By

[Lord Clement-Jones]

To ask Her Majesty’s Government what action they are taking to ensure that police authorities speedily and fairly settle claims outstanding under the Riot (Damages) Act 1886, particularly for uninsured claimants.

[The Minister of State, Home Office (Lord Henley)]

My Lords, the Government are committed to dealing with all claims where property was damaged in the August disturbances. We are working closely with the affected police authorities and the insurance industry to ensure that the processes that they have in place allow claims to be made as quickly as possible.

[Lord Clement-Jones]

My Lords, thousands of households and businesses are still waiting for compensation from police authorities after all this time. Some £3,500 has been paid out, of the £200 million or so worth of claims, and many valid business interruption claims are being contested. Does the Minister agree, especially in the light of the Prime Minister’s assurances on 11 August, that this is quite unacceptable? Will the Home Office issue firm guidance to police authorities to speed up the processing of claims and stop them hiding behind technicalities—for instance, that in some areas the disturbances did not constitute a riot for the purposes of the Act?

[Lord Henley]

My Lords, I accept what my noble friend says, that things have not been as speedy as they should have been. We estimate that some 5,000 claims have been received, totalling in excess of £250 million, but we must remember that a lot of those claims will include claims for loss that are not covered by the Act. We have to ensure that we do not pay out for things that the Government are not responsible for. We will try to deal with—as the noble Lord implied in his original Question—the uninsured claimants first of all, but obviously we want to deal with the insured claimants as well. That is why I stress that we are working with both the police authorities and the insurance companies to ensure that that is the case.

[Baroness Sherlock]

My Lords, I am grateful to hear that the Minister has offered a figure. I put down a Written Question to ask him how many payments had been made under the Riot (Damages) Act, and the Answer was three sentences long. It told me that applications for compensation were made directly to police authorities, and:

“There is no requirement for them to provide this information to the Home Office. Therefore, the precise figures of payments that have already been made to claimants will be held locally by each police authority”.—[Official Report, 8/12/11; col. WA198.]

In other words, go and ask them. Does the Minister accept that the Government in fact bear responsibility for sorting this problem out? If so, will he be willing to report to the House what progress is being made?

[Lord Henley]

My Lords, I gave an estimate of the number of claims but I cannot give an absolute figure. That is why I stress that it is only an estimate that 5,000 have been made. One has to accept that a lot of those claims will not be valid; in certain areas there have been many more claims than one would expect. I make no further comment on that.

I will certainly keep the House fully informed about how we are getting on with these matters. We want to ensure that all claims are settled as quickly and fairly as possible, and that when we are dealing with public money it is handed out in the appropriate manner.

[Lord Imbert]

My Lords, does the Minister agree that the Riot (Damages) Act, which was passed in 1886 for a different society from the one that we have today, is anachronistic, outdated and unfair? The police service has had its budget cut by 20 per cent this year. How can it afford up to £200 million in compensation? The Act has the connotation of blame. If we are looking for blame for the riots, should we look at the economic policies of successive Governments in failing to provide employment?

May I draw a picture of a single mother, living on the 13th floor of a block of council flats with three teenage children? She starts work at 5 am every morning as a cleaner, does another job in the afternoon and comes home to hungry and cold children, yet we blame her for not looking after them. They have never, in their whole lives, had a new pair of trainers but now have an opportunity. As far as the money is concerned—

[Lord Strathclyde]

The noble Lord really must bring his question to an end.

[Lord Imbert]

What about the £200 million or so that the Government will spend on appointing political commissars in the police service next year?

[Lord Henley]

My Lords, the noble Lord is making another point. I accept his remark that the Riot (Damages) Act 1886 is possibly past its sell-by date. For example, it does not cover motor vehicles, which had not been invented at that time. However, the Government have made it clear that we stand ready to provide financial support to police authorities and we do not see any of them losing out as a result of these claims.

[Lord Cotter]

My Lords, it is four months since the riots occurred and very strong assurances were given by the Government that businesses would be helped. The official report and other reports indicate that very few businesses have received the help that they expected to be given—and that we expected them to be given. I asked in September whether the Government would monitor the situation. Will the Minister give tangible figures and update us on the situation?

[Lord Henley]

My Lords, the Government have been monitoring the situation. My honourable friend the Minister for Policing has met representatives from the West Midlands police force, the Greater London Authority, the Met and the Greater Manchester police force. He has met the insurance companies, Kit Malthouse and a vast number of people. We are doing these things as quickly as possible. We extended the deadline by which people could make claims by 42 days. We have the whole subject under review, as I made clear in response to another question, and we will respond to those reviews in due course.

[Lord Hughes of Woodside]

My Lords, the Minister has been asked for figures three times. He keeps saying that the situation is under review and is being monitored. It is not monitoring that is required—it is action. Will he do something about it?

[Lord Henley]

My Lords, I totally reject that. I have made it clear that we estimate that there have been something of the order of 5,000 claims. We estimate that those claims total some £200 million to £250 million. That does not mean that all those claims are valid. Before we pay out public money, we want to make sure that they are valid and we will do that properly. We want to make sure that the uninsured are paid first and then deal with those who were insured, making sure that the insurance companies are repaid. That is why we are talking to the ABI.

[Lord Elystan-Morgan]

My Lords, I give the fullest support to the Minister’s indication that the Government regard the Act as having passed its sell-by date. Taking the point of the noble Lord, Lord Imbert, may I ask the Government to look very carefully into the whole philosophy of whether it is right, in the 21st century, that claims should be made against police authorities, as opposed to a more general claim, perhaps against the Government? I also make the point that the definition of “persons” in the Act is deeply flawed, as are the definitions of “property”. The Act should also be brought up to date to allow claims in respect of motor vehicles.

[Lord Henley]

The noble Lord is right to quote me as saying that the Act is beyond its sell-by date and needs to be reviewed. That is why it is being reviewed. I do not believe that the police forces will lose out. That is why we have made it clear that the Home Office is ready to support them. We will make sure that that is the case where appropriate. However, the important thing is that we look at the result of those reviews of the Act and then make the appropriate decisions.

Energy: Winter Fuel Payment

Monday 19th December 2011 Lords Chamber

Question

14:45

Asked By

[Lord Oakeshott of Seagrove Bay]

To ask Her Majesty’s Government whether they will make the winter fuel payment subject to basic and higher rate tax and limited to United Kingdom residents.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the winter fuel payment is a simple to administer payment that ensures that older people can turn up their heating in the winter months without worrying about the cost. We have no plans to tax the payment. We are obliged under European law to continue paying the winter fuel payment to people who qualify for a payment in Great Britain and then move to another European Economic Area country or Switzerland.

[Lord Oakeshott of Seagrove Bay]

I thank the noble Lord for that reply. I am rather nervous about this Question because 674 noble Lords are entitled to receive the winter fuel payment. That is 81 per cent of us. Would I be right in guessing that the Minister, who is 61, is, like me, one of the half a million top-rate taxpayers who benefit from this farcical tax-free bung? Why cannot winter fuel payments at least be taxed like the old age pension? That would raise £220 million a year to help people in real need in our country.

[Lord Freud]

Yes, my Lords, like the other 81 per cent in the Chamber I have to declare an interest in this matter, although I shall keep my tax arrangements between me and HMRC. One of the issues around taxation is that it is not straightforward to tax the winter fuel payment as it stands because it is a household payment whereas tax is done on an individual basis. It could be done but it is rather complicated.

[Lord Faulkner of Worcester]

Can the Minister confirm that there is nothing whatever to stop the noble Lord, Lord Oakeshott, giving away the money if he does not want it?

[Lord Freud]

My Lords, as the noble Lord knows, all money is fungible. This is a matter of psychology rather than funding. If people find it convenient to look at money as being in separate packets and give money in a particular packet to a particular charity, that is a very excellent thing to happen, particularly if it encourages charitable giving more generally.

[Lord Palmer]

My Lords, is it fair that this tax will be the same whether you live on the south coast of England or the north coast of Scotland?

[Lord Freud]

My Lords, I think it depends on what side of the country you live. I understand that the Mull of Kintyre is rather warmer than East Anglia, so I think that what the noble Lord suggests would be a pretty complicated thing to do.

[Baroness Hayman]

Would the noble Lord be kind enough to clarify his original Answer on overseas payments? Am I to believe that my Trinidadian born neighbour, who complained to me recently that a family member of hers who had returned to the West Indies was in receipt of the winter fuel payment, was incorrect?

[Lord Freud]

Yes, you can keep your winter fuel payment only if you go to another European country, so if it is being obtained by someone in Trinidad, the noble Baroness might make a call to Crimestoppers or someone.

[Lord Stoneham of Droxford]

Does not my noble friend agree that it would be fairer to tax the winter fuel allowance and use the money to ease the burden of his housing benefit reforms?

[Lord Freud]

My Lords, clearly, one can look at how one treats this, but essentially it is a simple payment. It is one of the universal payments to pensioners along with the state pension, additional pension and passported benefits such as NHS prescriptions. That is how it is designed. It would be rather complicated and expensive to tax it.

[Lord Kinnock]

My Lords, the Minister appears to be very sympathetic to the idea of changing the system, and I am not taking into account the season of the year. Will he reconsider the possibility of a levy on higher-rate taxpayers? After all, what is good for King Wenceslas should be good enough for 81 per cent of us.

[Lord Freud]

My Lords, I am grateful to be told where my sympathies are but the reality is that about 500,000 people would be affected and the saving would be about £40 million a year. It would be expensive and difficult to do and, therefore, on its own, it would not be a good idea. That does not suggest where my sympathies are at all.

[Lord Campbell-Savours]

Would not this proposal actually penalise low-income group, basic-rate taxpayers?

[Lord Freud]

I am sorry—I missed the point of that question. Will the noble Lord repeat it?

[Lord Campbell-Savours]

Would not the proposal penalise low-income group, basic-rate, elderly taxpayers?

[Lord Freud]

No, I do not think so. This is just a universal benefit that is paid on a simple basis to households that need it. Older people above 80 receive rather more than those below that age.

[Lord McKenzie of Luton]

My Lords, for the winter fuel allowance to be put to good effect, you have to have a home to heat. Sadly, we know that homelessness is on the increase in our country. The Minister is always keen to look at funding within fixed envelopes, but on what does he base his philosophy for supporting the retention of tax-free winter fuel allowances for higher-rate taxpayers, rather than providing more support for the homeless?

[Lord Freud]

My Lords, I hope that I have made it quite clear that when you have a universal benefit you pay it out on a simplified basis. Because it is a household payment, it would be enormously complicated to change that. Clearly, it could be done. There has been a small increase in homelessness but it remains at historically low levels. We are watching the figures very closely and it is a priority for this Government that we do not see an excessive rise in homelessness.

Immigration

Monday 19th December 2011 Lords Chamber

Question

14:52

Asked By

[Lord Taverne]

To ask Her Majesty’s Government whether they will reconsider their curbs on immigration in the light of their effect on competitiveness and economic growth.

[The Minister of State, Home Office (Lord Henley)]

My Lords, we will not. We are clear that the United Kingdom remains open for business. Our changes mean that we will continue to welcome the brightest and best who have the most to contribute to this country. At the same time, we are putting an end to the unlimited migration of recent years that has created unacceptable pressures on our public services.

[Lord Taverne]

My Lords, I acknowledge that there is a need for some control, but the Government seem to have indicated that they will reduce the number of non-EU migrants who wish to settle here after they have completed their studies. Will the Government take note of a powerful letter, written about a month ago to the Financial Times, by a number of very eminent academics who came here as non-EU immigrants and who would not have come if they had been told at the start that they would not be allowed to stay?

[Lord Henley]

My Lords, we will obviously listen to those academics but I have to say that the university sector as a whole is not complaining about what is happening. What we did was introduce a cap of just over 20,000 people, following the advice of the Migration Advisory Committee, on the number of skilled workers who were coming in. So far, in the first six months of this year, some 6,000 of those places were taken up—there is obviously a lot of slack in the system. There is no danger that any skilled workers are being denied the opportunity to come in.

[Lord Hunt of Kings Heath]

My Lords, on the question raised by the noble Lord, Lord Taverne, can we come back to the issue of universities and overseas students? The Minister has always maintained that the Government’s restrictions were aimed at bogus colleges. If we accept that, will he acknowledge that universities are now reporting that the policy is having an impact? First-class universities are being affected by the cap and first-class students are being turned away. Surely that part of the policy ought to be reviewed.

[Lord Henley]

My Lords, obviously, we will keep all these matters under review as is appropriate, but the noble Lord will also accept that it is quite right that we should attack the bogus colleges, which his party took no trouble to attack over the years. That is why there was a dramatic rise in the number of people coming here allegedly to learn English or some other thing, who went to colleges where no courses were going on and virtually no one enrolled other than to get round immigration rules.

[Baroness Hollis of Heigham]

My Lords, does the noble Lord accept, as my noble friend said, that about 60 per cent of the non-EU migrants to this country are students and that, of those doing a proper degree course at the sort of university that my noble friend talked about, 98 per cent are compliant with immigration controls and return to their country—98 per cent? So we are losing both the opportunity of their fees coming into the university sector and the possibility of helping DfID export their skills back to their home country.

[Lord Henley]

My Lords, I do not accept what the noble Baroness says, but if she can provide proper evidence for that, we will certainly look at it in due course. We are not aware that universities are complaining; we are aware that a certain number of private colleges— the bogus colleges to which I referred earlier—are complaining. That is why we will want to deal with that. In the main, I think it is quite right that we should tighten up on people coming to university and that is why, for example, there are rules about family members coming in which, again, the party opposite failed to introduce. Those have been tightened up for undergraduates but not for postgraduates.

[Lord Hannay of Chiswick]

My Lords, has any consideration been given, or is consideration being given, to taking students out of the immigration system? Now that the business of bogus academies has been dealt with rather effectively—I welcome that—would it not be sensible to recognise that the university sector is the most rapidly growing invisible export that this country has? It is simply not good enough to say that universities are not complaining. There may be some vestige of a lack of complaint from some body or other, but I would suggest that, if the noble Lord goes round the universities carefully, he will not find that that is the case.

[Lord Henley]

My Lords, I accept what the noble Lord has to say about universities being a very valuable export—we acknowledge that—but there should also be controls on students coming in. One area where we provided stricter controls is on undergraduate students bringing in families, which was seen as a form of abuse. We were quite right to tighten up on that and to keep more general matters under review, and that is what we will continue to do.

[Lord Cormack]

My Lords, of course my noble friend is right to maintain his attack on bogus colleges, but the point made by the noble Lord, Lord Hannay, deserves real consideration. At a recent dinner attended by the Minister for Universities and Science, Mr Willetts, at which there were eight or nine historians each from a different university, they were unanimous that this is having a deterrent and potentially disastrous effect. All we need is a little more sensitivity in the interpretation of the rules, or to put students in a separate category.

[Lord Henley]

My Lords, I acknowledge what my noble friend says. I am fully aware of these problems, having been the spokesman on higher education in this House, but there have been abuses. I referred to the fact of family members coming in with undergraduates. We have tightened up on that. I remember, as can many other noble Lords, that back in the early 1980s, when we first brought in fees for overseas students, we thought that we would lose out dramatically. We did not; we saw an increase in the number of overseas students coming in. I am sure that if we get this right and listen appropriately, we will continue to see a great many overseas students coming to our world-class universities.

[Lord Tomlinson]

My Lords, why does not the Minister agree with the sensible report that came from the House of Commons Home Affairs Committee? That raised the very issue raised by the noble Lord, Lord Hannay, that students should not be treated as migrants. We are sending out a message to all overseas students who would otherwise have come to this country—some in the public sector, some in the private sector—that they are a troublesome group who need to be controlled.

[Lord Henley]

The very simple reason is that some—particularly in the private sector, which is why I referred to private sector colleges—were involved in an abuse. If there is an abuse of the system, we have a duty to tackle it, and that is what we have done.

[Baroness Hamwee]

My Lords, the Minister may be aware of a recent report from the London Chamber of Commerce and Industry entitled Migration Reform: Caps Don’t Fit. It concludes:

“Our research shows that one of the main reasons companies recruit from beyond the EU is their desire to explore and invest in new, overseas markets”.

It also says that, if the UK’s economic recovery is to be export led, this is a particularly important consideration. Does the Minister acknowledge that?

[Lord Henley]

My Lords, I think that I have followed what my noble friend has said. Obviously, we recognise the importance of universities—as I said in response to the question from the noble Lord, Lord Hannay, they are a major part of our exports. However, I also see what my noble friend is getting at. I have not seen the research that she refers to, which talks about the need to bring in workers from outside the EU. However, the point that I was making in my first supplementary answer was that we have a cap on the number of skilled workers, and we have not got anywhere near that cap in the first six months of this year.

Open-Ended Investment Companies (Amendment) Regulations 2011

Monday 19th December 2011 Lords Chamber

Motion to Approve

15:00

Moved By

[Lord Sassoon]

That the draft regulations laid before the House on 21 November be approved.

Relevant document: 34th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 December.

Motion agreed.

Elected Local Policing Bodies (Complaints and Misconduct) Regulations 2011

Monday 19th December 2011 Lords Chamber

Local Policing Bodies (Consequential Amendments) Regulations 2011

Accession (Immigration and Worker Authorisation) (Amendment) Regulations 2011

Motion to Approve

15:01

Moved By

[Lord Henley]

That the draft regulations laid before the House on 14, 21 and 25 November be approved.

Relevant documents: 33rd, 34th and 35th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 14 December.

Motion agreed.

Health and Social Care Bill

Monday 19th December 2011 Lords Chamber

Committee (14th Day) (Continued)

15:01

Debate on Amendment 338 resumed.

[Lord Patel]

My Lords, I shall speak to Amendments 338 and 340, to which I have added my name in support of the noble Baroness, Lady Emerton. For those of your Lordships not familiar with the amendments, they are to do with the regulation of healthcare support workers. As many noble Lords will know, these workers were introduced into the health service just over a decade ago, and they are untrained, unqualified and unregulated. There are 300,000-plus of them in the health service, with many more working in nursing homes.

Any debate about the regulation of healthcare support workers will need to take account of current workforce trends. In April 2011, the Royal College of Nursing reported that NHS trusts were increasingly looking to reassess nursing roles in order to deliver short-term reductions in the wage bill without a full clinical assessment of the impact of this action on patients’ safety and the quality of patient care. The RCN reported a notable change in the skill mix of teams, with an increased reliance on unregulated healthcare support workers.

The other workforce in nursing is trained and regulated. It is made up of registered general nurses and registered midwives, and we also used to have state-enrolled nurses. The view could be taken that it is the responsibility of employers to make sure that their workforce is adequately trained and has the skills to deliver the care, but many recent reports with which noble Lords are familiar highlight poor-quality nursing care. Some of them have appeared in the press and include the failings at Stafford Hospital, where hundreds died unnecessarily, and at Winterbourne View care home, where staff were filmed abusing vulnerable patients, as well as a series of critical reports, most recently from the Care Quality Commission, which has condemned NHS care for the elderly. Some, including regulatory authorities and particularly the Council for Healthcare Regulatory Excellence, favour the employer-led model of training of healthcare support workers or of those who are not trained yet provide nursing care. This model was introduced in Scotland. The important thing is that it has never been evaluated. That needs to be done first. Secondly, and more importantly, the ratio of trained nurses to untrained support workers is quite different in Scotland. Anyone who promotes this model needs to look at that first.

I return to some of the issues. The noble Baroness, Lady Emerton, made all the points in an excellent introductory speech. It is a pity that we did not have a continuation of the debate so that we could have heard her comments and responded to them. However, the Bill proposes that the regulators of healthcare professionals should have the ability to establish voluntary registers for currently unregulated workers and professionals who are, or have been, engaged in work that supports or otherwise relates to work engaged in by members of the profession that the body regulates.

In proposing voluntary registration, the Government have accepted that unregulated workers supporting healthcare professionals represent a risk to public protection that needs to be addressed. If they did not, why would they even consider voluntary registration? It must be because they think it is a risk. Voluntary registration for healthcare support workers carrying out tasks delegated by nurses or midwives is not sufficient to protect the public.

The other argument used is that it is the trained nurses—the registered nurses—who supervise these support workers who are not trained or regulated. How can a nurse, or two nurses, in a ward of 15 or 16 intensive care patients, supervise three or four unregulated, untrained workers, who then carry out nursing tasks? The noble Baroness, Lady Emerton, cited a real case of such a worker measuring blood pressure who did not understand why she was doing it. If one is going to have people who look after ill, frail people, one needs to make sure that they are trained properly, that their training is assessed, and that they are regulated. I understand that this cannot be done overnight, particularly as we now have nearly 400,000 such people working in the health service, but there ought to be some mission to do this in a relatively short time, maybe even in two or three years. To go after voluntary registration is not the answer.

There is currently no consistent UK-wide training standard for healthcare support workers. Courses can range from an hour-long induction up to NVQ level 3. Assistant practitioners are experienced health support workers. They are different, and they may receive training up to NHS-level band 4, which is equivalent to the level of the previous state-enrolled nurses, but, again, there is no consistency across the UK. Clause 231 gives no indication that a voluntary system will be underpinned by consistent UK-wide standards of training that will assure the public that employers who employ health support workers have the knowledge and skills that they need to practise safely. I strongly support this amendment. Whenever the noble Baroness wishes to call a vote, I will join her.

[Lord MacKenzie of Culkein]

My Lords, I have long been an advocate in the cause of statutory regulation and registration of healthcare support workers. When one has been around the health service for a long time, it is not unusual to see the wheels turn full circle. We went from support staff to auxiliary nurses, to nursing assistants, to state-enrolled assistant nurses. Then the word “assistant” was dropped and we had state-enrolled nurses. Then, as the noble Baroness, Lady Emerton, said earlier, the roles of the state-enrolled nurse and the registered nurse became very confused and the titles became interchangeable, which should never have happened. Then we moved to Project 2000 and the move from hospital-based training to higher education, and we are now moving from diploma to an all-degree profession, which is right and proper.

In 1999, my union, the Confederation of Health Service Employees, supported Project 2000, but we foresaw a gap that would be left by the ending of enrolled nurse training, which would lead to there being many more auxiliaries or healthcare assistants, as they became. We called for support workers to have about a year’s training to an agreed national standard and statutory regulation by the United Kingdom Central Council for Nursing, Midwifery and Health Visiting, as the regulatory body was called. We did not get that. The idea was opposed because it was argued that it would replicate the then existing confusion between enrolled nurses and registered nurses.

Where are we now? We have an explosion in the number of support staff who have taken the place of enrolled nurses; there are far more than any of us ever envisaged at the time. As the noble Lord, Lord Patel, said, more than 300,000 support workers are now employed in various roles with a number of job titles. One figure that I saw in research produced by UNISON said that there were more than 120 different job titles for healthcare support workers, which is astonishing.

We have a situation in which the patients do not know who is caring for them. It is not just a question of uniform, although that is important. Support staff carry out many duties that were previously the role of regulated nurses. Many of those roles, such as nasal gastric tubes, cannulation, catheterisation and blood pressure, are intimate and invasive, as we have heard. Almost uncannily, in view of what the noble Baroness, Lady Emerton, spoke about, I spent some time in hospital a couple of years ago when I had my blood pressure taken sitting in a chair beside the bed and my diastolic pressure was down to 40. I said to the healthcare assistant who took that blood pressure, “I had better get back to bed and I think you’d better call a senior nurse and doctor”. She said, “No, you are going down for an MRCP scan; just sit where you are”. Fortunately, being a nurse, I knew what I was talking about and I was able to get a doctor and a nurse, and before very long I had massive amounts of fluid pumped into my veins to restore my blood pressure. Had I not understood the situation, that could have resulted in a serious condition. It is quite frightening. You can be trained to take blood pressure, but not trained in the skills of observation and in understanding the readings that are being taken.

With the drive to reduce costs, there is, and will be, more substitution of registered nurses by healthcare workers. In effect we have a new second level, but that new second level is not regulated and not registered and the staff are not professionally accountable for their practice. That is not good enough. That is not in the interests of patients’ safety or protection. Nor will assured voluntary registration deal with the matter. Voluntary registers already exist for other professions and there are very real concerns about their inadequacies. They have no teeth, and staff can leave a voluntary register, particularly if there is any investigation for possible discipline.

The registration and regulation of healthcare support workers is supported by the Nursing and Midwifery Council, by the Royal College of Nursing, and by UNISON, although in fairness I should say that UNISON would prefer registration by the Health Professions Council. Registration is supported by the Queen’s Nursing Institute, by the health committee in another place and, most importantly, by healthcare assistants themselves.

In the Nursing Times of 6 December, I was interested to see in a small article about the Mid Staffordshire NHS Foundation Trust public inquiry that Robert Francis QC spoke of 20 issues that he would consider when drawing up his recommendations, which are due to be published next year, and the regulation and training of healthcare assistants was to be first on the list. I hope that that does not mean that they will carry the can for all the problems in Mid Staffordshire because that is certainly not the case; they go to a much higher level than that. Counsel to the inquiry, Tom Kark QC, said that the lack of regulation of healthcare assistants appeared to be surprising and dangerous.

There is inexorable pressure for this matter to be dealt with—and dealt with soon. It is not something that can be put on the long finger. If there is a strong recommendation from the Mid Staffordshire inquiry, we cannot leave it to be dealt with in a future Bill because we will not be getting another health service Bill for some time. This Bill gives us the opportunity to do this and to get it right. I strongly support the amendment by the noble Baroness, Lady Emerton. Healthcare assistants who have work delegated to them by nurses should be properly regulated and registered.

15:15

[Baroness Pitkeathley]

My Lords, I am very sorry to take issue with the opinions of noble Lords with whom I usually agree most heartily. I remind the Committee of my role as chair of the Council for Healthcare Regulatory Excellence. I should make it clear that I am in no way taking issue with noble Lords' concerns about the practice of healthcare assistants, nor with the emphasis—given particularly by the noble Baroness—on the need for proper training. The only thing I take issue with is whether statutory regulation is the correct solution to the problem.

I am not aware of any body of evidence that demonstrates that the risks of future harm presented by the practice of healthcare assistants could not be successfully managed by the existing processes and governance systems if they were applied effectively. That is the point. Healthcare assistants are already supervised by other staff who have the professional responsibility to supervise them. As we have heard, they almost always work in supervised settings, with supervision usually being the responsibility of staff who are statutorily regulated. Statutorily regulated professionals have a responsibility to ensure that the staff whom they manage offer safe care, conduct themselves professionally and are delegated only tasks that are within their technical competence. For example, the Nursing and Midwifery Council’s code states:

“You must establish that anyone you delegate to is able to carry out your instructions … You must confirm that the outcome of any delegated task meets the required standards … You must make sure that everyone you are responsible for is supervised and supported”.

In other words, we already have in place a governance system to ensure that healthcare assistants work safely and with proper delegation, supervision and support from a statutorily regulated professional. Employers are required to ensure safe systems of work, which will include providing support in delegating and supervising effectively.

Creating a list of people is not in itself an effective safeguard. Effective regulatory conditions are often much closer to home. For example, in an environment that is poorly managed and distant from scrutiny, poor standards of care can become the norm, with staff being drawn into collusion with poor care. We have seen many examples of this recently, particularly of the process of collusion, with people working in a poorly managed environment unable to resist the downward spiral of standards. The most effective way to invert the spiral is by employers properly managing the specific environment, not by establishing another structure.

Winterbourne View was referred to several times in this short debate. Perhaps it is worth reminding noble Lords that registered professionals were involved in delivering poor care there. Statutory regulation did not prevent it. We should always bear that in mind. Regulation is not necessarily the answer. Further, we cannot ignore the fact that statutory regulation would be expensive and cumbersome for a large, low-paid workforce with a high annual turnover. It is not proportionate to the risk, which can be managed by effective training, delegation and supervision.

The recent announcement by the Secretary of State about improving standards of training and the potential to develop a voluntary register of healthcare assistants is encouraging. I also welcome the Nursing and Midwifery Council's announcement that it will fully engage with the project that the Secretary of State announced, and with any further developments around assured voluntary registration for this particularly valuable group in the healthcare workforce. It is important that we make sure that we value this group, who are of such importance in the front line of the nursing and patient care environment.

[Lord Warner]

My Lords, I am speaking because my name is also on this amendment. We need to reflect on several aspects relating to the context of this issue. I do not think that there is much doubt that we have a problem of some significance, or any doubt that the problem has been growing over a long time. I also do not think that it is an easy fix simply to jump to statutory regulation. I went through the process when the whole issue of regulating social workers arose, and that proved extremely difficult to introduce. I do not doubt that we will end up with statutory regulation of some kind, but we might have to go through some processes before we get to that point.

I do not want to duplicate the history that other noble Lords have put forward most expertly. I came into this story as a very young civil servant at the end of the 1960s when the Salmon committee was set up. Some noble Lords may be old enough to remember the Salmon committee—I was assistant secretary to the committee. This was in the days when civil servants could not hold a job for long and were moved on at a tremendous rate. While doing this work we saw how things worked at the ward level. In those good old days of the 1960s and early 1970s there was a ward sister, state-registered staff nurses, nursing auxiliaries and state-enrolled nurses. We also had a set of arrangements in which oversight of cleaning was largely the duty of the ward sister. Furthermore, bank working was not that common.

What has happened since those “good old days” is that hospitals have become used more intensively. Bank working has meant that there is a higher flow of different people moving through the wards, and the profession, with good reason, has wanted to make itself a graduate profession. The context has changed a lot, so the dynamics of those wards has changed quite a lot.

Alongside that we have been growing another industry in the community: in nursing homes, residential care homes and—not quite as fast as one would like, within the health service—a district nursing service. One of the problems in both these areas, whether acute hospitals or the community, is that with the demand of patients for services, and the demography which has gone alongside that shift in time, the qualified and registered nursing profession has inevitably had to look for help from sub-professional groups to help carry the load. In the community there is not a strong management structure to oversee this, so to some extent it is difficult for district nurses to oversee any work done by unqualified personnel. Such oversight might be the theory but in practice it will often be difficult to achieve.

Community services are burgeoning, the hospital service has changed, and we have a problem of a growing need for more people who are not qualified and registered nurses to work alongside such nurses to provide some of the care. We are looking to the Government to produce a comprehensive review that examines the situation that we face now rather than the situation we faced 10 or 15 years ago and which was very different.

I suspect that we will have to move by interim steps towards statutory registration, and perhaps voluntary registration is an interim step. However, I am not convinced that we have a comprehensive set of answers to a continuing and serious problem. The Government need to think about how they will deal with this very serious problem.

[Lord Alderdice]

My Lords, I also have some scepticism about assured voluntary registration, but I will come back to that when we debate the subsequent amendment. I have some sympathy with the noble Baroness’s amendment. I had not intended to speak on this amendment until I heard a number of noble Lords speak, and I take a slightly different lesson from the history of the past number of years in the development of the nursing profession.

Like the noble Lord, Lord Warner, I remember sisters, state registered nurses, state enrolled nurses, nursing auxiliaries and so on, but one of the key things was that all those professionals described themselves as nurses. Indeed, I very well remember as a young doctor that nurses would not say, “I looked after that person”, or “I was on the ward when that patient came in before”, but said, “I nursed that patient”. There was a quality of compassion and relationship that was critical to the profession. I think that not only nursing as a profession, but many other professions went down the wrong road when they took the view that the future was in tighter registration and a graduate profession because that was not fundamentally the need. I heard my right honourable friend in another place being asked questions in the past few days about poor care of patients with dementia, and he made a very important point. He said that you can find two wards beside each other in a hospital with nurses with exactly the same level of training and qualifications but in one of those wards the patients are cared for with compassion and in the other ward they are not. When we move to healthcare support workers, it seems to me that whatever we move to, we do not move to a title that expresses compassion and care for the patients who are being nursed.

My gratitude to the noble Baroness is not for the specific terms of her amendment, and I do not think that they were the burden of her bringing the amendment forward. It is that we engage in a serious, proper debate about this issue, not just for nurses, but for other professions. There are some for whom I believe that statutory registration is the proper way ahead, but there are others for whom it does not seem to be the case that always moving to graduate professions with training and registration is the sole and most important way of dealing with these questions. It is quite clear that making nurses graduates and having registered nurses only has simply opened a door that has had to be filled with other, less qualified and, it has to be said, less expensive employees. Now we have a problem with them not measuring up to the professional standards of compassion that all of those—or at least, almost all of those—who aspired to be nurses at whatever level in the past aspired to in the best sense.

I welcome the fact that the noble Baroness has tabled this amendment; I am not quite sure it is the precise solution, but I hope we find ways to come back to the serious ongoing debate that the noble Lord, Lord Warner, has pointed to because there is a crisis in this area. I remember saying this two, three, four years ago in your Lordships' House and noble Lords who are now on the Benches on the other side thought it was simply a party-political attack. It was not—it was a genuine sense of concern that things were deteriorating. They have continued to do so, and it will not be dealt with solely by registration, training and academic qualifications because a quality of care and compassion and a culture of compassion are necessary. That is not to take away from the question of assured voluntary registration, which I wish to explore in a further amendment.

[Lord Hunt of Kings Heath]

My Lords, I, too, pay tribute to the noble Baroness, Lady Emerton, for her perseverance and determination in this very important area. Rather like the noble Lord, Lord Alderdice, I am clear that the role of healthcare assistants has to be seen in the context of a much more general debate about nursing care, including the compassion that he talked so eloquently about.

As the noble Baroness said to us rather earlier this afternoon, we had an excellent debate on nursing on 1 December, and we are presented with something of a paradox: on the one hand, we should not ignore the huge advances in the nursing profession over the past 20 years. There has been the move to a graduate profession and nurses have taken on much greater responsibility, including for complex care and specialist care, and I think that, overall, the public have welcomed that increased responsibility. At the same time, there has been real and mounting concern about basic standards of care and issues to do with hygiene, feeding of patients, nutrition, dignity and even face-to-face contact—the kind of compassion that the noble Lord, Lord Alderdice, has just spoken about. We have seen the reports from unannounced visits of various bodies. Recently, the CQC has undertaken important visits to many of our hospitals. There seems to be real evidence and concern about a falling of standards of basic care.

The reasons for that are not clear. It is possible that nurse training is now too focused on academic performance rather than on practical nurse training. It is also at least possible that the drive for specialist nurses and modern matrons has taken from the ward the many experienced nurses who, in retrospect, might be better placed in leading their ward as ward manager or senior sister. What is not in doubt is the need for serious thinking about how we can enhance the overall quality in standards of basic care that nurses give.

That brings us to the role of healthcare assistants. Again, in our debate on 1 December, the noble Earl, Lord Howe, in responding, referred to the concerns that had been expressed about nursing in the acute sector in particular. He said he felt that that,

“related to inappropriate delegation by nurses to healthcare”,

assistants. He continued:

“Wherever there is a multidisciplinary team of regulated professionals and unregulated healthcare workers, appropriate delegation and supervision is vitally important. This is an area ripe for formal review”.

He also said that the Government welcomed,

“the NMC’s plans to update its guidance on delegation”,

and that they have,

“asked Skills for Health and Skills for Care to accelerate production of a code of conduct”.—[Official Report, 1/12/11; col. 419.]

I am sure that those actions by the Government are very generally welcomed. The question before us is whether they are sufficient. From what the noble Baroness, Lady Emerton, has said, it is clear that she does not think that they are. Powerful support for that argument has been received from the Nursing and Midwifery Council, which argues that a system of regulation for healthcare support workers should contain provisions for consistent UK-wide standards of training and practice that would assure the public and employers that they have the knowledge and skills to practice safely. It further suggests a mandatory register to ensure that workers who have been struck off the nursing and midwifery register are not re-employed in a healthcare support role, which has been the subject of some concerns. It is also notable that the House of Commons Health Committee supports mandatory statutory regulation of healthcare assistants, which it believes is the only approach that would maximise public protection.

However, we have heard from my noble friend Lady Pitkeathley, chair of the Council for Healthcare Regulatory Excellence, who has put a different view. It will be interesting to hear the response of the noble Baroness, Lady Emerton, on why she thinks that a voluntary register for healthcare assistants is the way forward. I should like to ask her whether she would support NHS bodies which require healthcare assistants to be voluntarily registered as a condition of employment. If that were the case, what safeguards does she think could be put in place as regards a worker who was dismissed because of poor conduct towards a patient? How could we ensure that in those circumstances that person could not then work in another part of the care sector? That seems to me to go to the heart of the issue of whether a voluntary register could work.

I have no doubt that NHS employers could be encouraged to make it mandatory but the problem with that is that too many people could slip through the net. I would also ask the noble Baroness to respond to my noble friend Lord Warner. I share his view that, clearly, we are crying out for a fundamental review of these issues around nursing quality and care, compassion, and dignity of care being given to patients, and that relationship to healthcare assistants. If the Government are not prepared to move on this and on the point about only going as far as a voluntary register, can they at least give some comfort and assurance that they recognise that this matter needs close attention?

I am not a great believer in royal commissions—I think it was Harold Wilson who said that they could be established in a minute but take years—but there is a strong case for a fundamental review of the nursing profession, embracing healthcare assistants. Would the Government be prepared to give us some comfort on this?

[Baroness Northover]

My Lords, these amendments seek to extend compulsory statutory regulation to healthcare support workers. I thank noble Lords for the amendments because they raise important issues about the ways in which we assure the quality and safety of those who work in support of our regulated health professionals. The Government are publishing a fact sheet on this issue that will contain further details about their proposals, which I hope will be helpful to noble Lords.

There are more than 200,000 nursing assistants and approximately a further 1 million people working in similar jobs in adult social care in England alone. The majority of support workers give the highest quality of care. However, a minority let patients down. This is rightly a cause for concern, although as a former historian I have to say that I do not fully recognise the notion of everything having been perfect in earlier periods but everything breaking down at this point. One needs only to look at what has been said from Florence Nightingale onwards about what happened during the interwar periods, during times of war and so on. This has always been more varied than perhaps noble Lords are allowing for. Nevertheless, it is extremely important that we try to drive up quality and ensure that quality holds good right across the health service and social care. It is right that there is discussion and debate about the best way of ensuring that high standards of care are delivered at all times.

As the noble Baroness, Lady Pitkeathley, pointed out, there are already existing tiers of regulation that protect patients and service users. Professionals struck off by their regulator or sacked by an employer who pose a risk to vulnerable adults or children should be referred to the Independent Safeguarding Authority, which has been very clear that it expects this to happen. In the same way, employers should make referrals about individuals from unregulated groups where they pose a risk of harm to vulnerable adults or children. Providers and employers also play a key role in ensuring safe, high quality care that patients and service users can be confident in, being both responsible and accountable for the staff they employ. Under the registration requirements of the Care Quality Commission, providers must take steps to ensure that at all times there are sufficient numbers of suitably qualified, skilled and experienced persons employed for the purpose of carrying on any regulated activity.

An individual being on a list does not alter this and would not remove employers’ responsibility to undertake a range of checks on the suitability of any persons who they appoint, including qualifications, relevant registrations, employment history and reference checks to ensure that an individual is competent for a specific role. Equally, appropriate delegation and supervision is a necessity within teams made up of both regulated and unregulated professionals and workers. Guidance by the Nursing and Midwifery Council is being updated so that nursing staff know how to delegate appropriately and safely.

We are not ruling out compulsory statutory regulation for healthcare support workers, but our view is that the case has not yet been made for imposing further compulsory statutory regulation, given the tiers of existing regulation and the duties on regulated professionals. There is no solid evidence that demonstrates that healthcare support workers and adult social care workers should be subject to compulsory statutory regulation. Research by King’s College London concluded that little evidence could be deployed to show that regulation of healthcare support workers would reduce the risk to the public, although it was clear that some healthcare workers were undertaking roles that had traditionally been done by nurses. The point is that quality is not always what is delivered. Therefore, we have to try to tackle that concern and not simply assume that regulation will deal with it. As the noble Baroness, Lady Pitkeathley, mentioned, there are regulated professions which are in some instances letting us down. We must focus on the real problem and figure out ways of tackling it.

The Government’s view is that high standards for healthcare support workers and other professional occupational groups can be assured without imposing compulsory statutory regulation. That is why, in the wider context of supporting providers, we are creating through the Bill a system of external quality assurance for voluntary registers. To pick up the point made by the noble Lord, Lord MacKenzie, there are various examples of voluntary registration for groups of professionals. We are proposing a quality-assured voluntary approach, looking at how those registers are set up and operated and what training is offered and so on. A quality-assured voluntary register will set standards for training, conduct, competence and ethics that all registrants must meet.

[Lord Hunt of Kings Heath]

My Lords, if the Government are putting so much faith in the quality-assured voluntary register, surely the evidence from King’s College would show that that was not necessary. They cannot have it both ways. Either regulation, and what comes with it, provides advantages or it does not.

[Baroness Northover]

Regulation and training are often put as two words in one sentence. Regulation may indeed include training; assured voluntary registers may also include training. The noble Baroness, Lady Emerton, talked about that. Perhaps I may come on to it, because it is potentially relevant here.

I am particularly grateful to the noble Baroness for her contribution to this debate, not only today but throughout her time in the House of Lords. We agree that common standards of training are needed for those working in both health and social care, as well as more role-specific training, and that this will lead to a more capable and flexible group of support workers. As we seek to integrate health and social care more effectively, this area deserves a lot of scrutiny.

We expect work on the standards to begin by April 2012 in terms of training, and for them to be agreed ahead of the establishment of voluntary registers for healthcare support workers and adult social care workers, which could be operational from 2013. This will allow unregulated workers to demonstrate that they meet a set of minimum standards for training and are committed to a code of conduct.

[Lord Hunt of Kings Heath]

My Lords, I still do not understand this. If it is so important that the voluntary registers are established, for the reasons that the Minister has given, why on earth not go the full hog and make registration compulsory? If the Government do not think that it is important, they would not be pursuing the voluntary register approach. However, by taking that approach, they will leave lots of people outside the net.

[Baroness Northover]

As the noble Baroness, Lady Pitkeathley, and others have indicated, one has to be proportionate about this and not think that simply going down the route of regulation is going to crack it. Nevertheless, training and making sure that people are well prepared for the work that they are doing is clearly of great importance. We would expect a voluntary register, quality assured in the way that I have described, to provide a way for employers to assure what they are offering in terms of staff. There will therefore be greater take-up. Those who are on the quality-assured register will find themselves more employable, which will move things forward. Meanwhile, if, as we continue to debate this, voluntary registration does not seem sufficient and regulation seems the route to go down, the Government do not rule that out. However, it is extremely important to focus on the end point, which is to try to drive up quality, and not simply be deflected by thinking that this would crack it.

I assure noble Lords that we will keep this issue under constant review. We are well aware of people’s concerns and that standards need to be driven up in a much more even way across the board. As I say, we are developing the education and training which I hope will go some way towards this.

15:45

[Lord Patel]

I wish to pick up on one point. Can the noble Baroness reassure us on what it is she will keep under constant review? I understood her to say that the Government will rely on employers to ensure that these support workers have some kind of training. There will be no national training standards and, once the employers are satisfied that these people have some kind of training, they will be entitled to go on a voluntary register. As I understand it, the logical thing here is first to establish a national standard of training; then to ensure that those national standards are implemented; and then to allow people to register. If they register, the next step would be regulation. The first step is not immediate regulation but national standards of training and assessment that those standards are being met, before people can go through any kind of registration. What is the noble Baroness agreeing to keep under review?

[Baroness Northover]

I should perhaps explain that more precisely. This issue will be constantly under review so that if there are concerns in this area they will be flagged up. The Government will of course continually consider how best to respond and make sure that standards are of the quality that we need. The noble Lord is right: national standards of training are indeed the start. Then people are admitted to a register and so on. A voluntary-assured register would demand that kind of national level of standards in training. I hope that in that regard I can at least reassure the noble Lord.

[Lord Warner]

One question has puzzled me more and more as the noble Baroness has progressed. My noble friend Lady Pitkeathley laid great stress on the position of the regulated nurses and the fact that they will have to ensure that people working in the healthcare assistant type of roles under their supervision do not take on roles that they are not competent to fulfil. Going back to my description of the way the NHS works in reality, particularly in acute hospitals, there is a constant flow of different people on these wards—regulated and registered staff, agency or bank staff, are there particularly in the evenings, for unsocial hours and at weekends. We have heard a lot about employers. I am still puzzled about how the statutory regulated nurses satisfy themselves about the competence of the healthcare assistants working under their direction. They seem to be the people most exposed—at least theoretically—to cop it from their regulatory body if they have not made extensive inquiries about the competence of these healthcare assistants. How does the noble Baroness square that particular circle if we do not have much knowledge of the training of these people and they have not even registered on a voluntary basis?

[Baroness Northover]

The noble Lord will be familiar with being on wards at changeover time and when there is a pooling of information about who is on the ward and what the problems are. Issues are flagged up and one team passes information on to the next.

[Lord Warner]

I have seen changeovers at weekends, when visiting relatives. It is not a pretty sight.

[Baroness Northover]

I have seen many, many changeovers. The proposal is being brought forward so that registered, regulated nurses have a better idea of when and how to delegate, and that is extremely important for the reasons that the noble Lord has just indicated. As I have indicated, the training and national standards of healthcare workers, to which the noble Lord, Lord Patel, referred, are also important—as is taking that forward so that the registered nurses are aware of the kind of training that those healthcare workers have had. I want to pick up on the case that the noble Baroness, Lady Emerton, mentioned about the healthcare worker who was taking a patient’s blood pressure but did not know what the reading meant. Surely, it was for the person to whom that was reported to take action on the significance of that. That information was to be passed on to somebody else to read, understand and interpret.

[Lord MacKenzie of Culkein]

But if that healthcare assistant does not have the basic training or an understanding of the reading that she or he has just taken, they may not see the importance of reporting it to another nurse.

[Baroness Northover]

I am not suggesting that they would. What I am suggesting is that the registered nurse might go and check the chart.

[Baroness Emerton]

My Lords, perhaps I could be helpful at this stage. I am grateful to noble Lords who have contributed to this debate. A large number of issues have been brought forward; I shall start with the title “nurse”. As noble Lords have mentioned, a person who is nursed—and feels that they have been nursed—experiences care, compassion, respect and dignity. There has been a lot of discussion among the public, and indeed in this House, about registered nurses becoming graduates and whether they will be too posh to wash, to put it colloquially. To me, a nurse who is a graduate would be only too grateful to be able to attend to the basic needs of patients, because that is part of holistic care. When you do various intimate things for patients, you learn a great deal about their condition.

The point that has been raised about the nurse is very important. We talk about support workers but we cannot talk about support nurses, because the term “nurse” is completely left for the statutory requirement of a regulated nurse. We are looking for a support worker who is able to do tasks which they understand, with the skills of the graduate nurse—because by 2013, we will be producing all-graduate nurses—within holistic care. That is the point I was trying to make this morning: it is the holistic care we are looking for in the delivery of care. However, it is not only holistic care in the acute sector; we are looking at the holistic care which is integrated with social care, because we are now looking at patients going into the community. Indeed, people working in the acute sector need to understand that the patients they are discharging are going into the community, which is a different scene and which may require not only a nurse but social care support. Therefore, somewhere in our education we need to bring together a basic core of understanding healthcare, nursing care and social care.

The point that the noble Lord, Lord Warner, made is very important. We need to conduct this review. On the other hand, the research evidence shows us that as regards highly qualified registered staff, the higher the proportion, the less likely it is that patients will have a longer stay in hospital. They will have a better clinical outcome. I hope that the Government are not going to ignore that research. If possible, we should carry out a truly safe cost-benefit analysis into increasing the number of trained staff, seeing where they are needed, rather than having a higher proportion of support workers.

The Royal College of Nursing has been resolute in putting forward the regulation of healthcare support workers because it feels that that is the way to ensure that they are answerable to a registered nurse. We talk about employers but I am not sure who the employers are going to be—social workers, managers or the nursing profession. This whole issue needs to be taken away and looked at, and perhaps we could return to it. I do not know whether these comments are helpful but I feel strongly about this issue, as noble Lords may have gathered. I pass it back to the Minister.

[Baroness Northover]

I hear what the noble Baroness says. She is extremely well informed, as ever, and I hope that she will continue to engage as we take this forward, as she has done up to now. However, at this point I hope that she will withdraw her amendment.

[Baroness Emerton]

My Lords, I am prepared to withdraw but we will probably come back to this on Report. I beg leave to withdraw the amendment.

Amendment 338 withdrawn.

Amendment 338ZA

Moved by

[Baroness Thornton]

338ZA: After Clause 205, insert the following new Clause—
“Power to regulate clinical physiologists in England
(1) Section 60 of the Health Act 1999 (regulation of health care professions) is amended as follows.
(2) In subsection (1) after paragraph (b) insert—
“(ba) regulating the clinical physiology profession in England,”.(3) In that section, after paragraph (bb) insert—
“(bc) regulating clinical physiologists in England who appear to require regulation in pursuance of this section,”.”

[Baroness Thornton]

My Lords, I shall speak also to Amendments 338ZB, 338F and 339ZB. We return to a regulatory issue. Amendments 338ZA and 339ZB are new clauses relating to the power to regulate clinical physiologists in England. Amendment 338ZB is a new clause requiring clinical physiologists to be registered by the Health Professions Council. Amendment 338F says that the Health Professions Council, in exercising its functions, shall co-operate with the regulation of clinical physiology in England and with the provision, supervision or management of services of people engaging in clinical physiology in England. The noble Baroness, Lady Finlay, has an amendment in this group and we support what she is proposing.

I am sure that other noble Lords have received the helpful briefing note from the Registration Council for Clinical Physiologists, which highlights that the Government’s current approach—a preference for voluntary registration, as the Minister outlined in the previous debate—has been applied to clinical physiologists, despite a recommendation from the Health Professions Council in 2004 for statutory regulation. The RCCP has a substantial amount of evidence suggesting that, in the case of clinical physiologists, voluntary self-regulation is not as effective as statutory regulation.

In the Command Paper Enabling Excellence: Autonomy and Accountability for Health and Social Care Staff, the Government stated that statutory regulation would be considered for those professions where a compelling patient safety case could be made and be supported by an evidence-based cost-benefit risk analysis. Ten months later, though, no such risk assessment has been undertaken, and the RCCP continues to believe that clinical physiologists should be statutorily regulated.

The disciplines that are covered by clinical physiology are audiology, cardiology, gastrointestinal physiology, neurophysiology and respiratory physiology. Clinical physiologists work directly with patients, performing sensitive procedures such as assessments of pacemakers, testing lung function and assessing and diagnosing hearing loss. Many of the procedures performed by clinical physiologists in the UK are performed by statutorily regulated professionals in much of western Europe and by clinicians in the United States.

A body that I have mentioned, the Registration Council for Clinical Physiologists, maintains a voluntary register of clinical physiologists in the UK and Northern Ireland. It has more than 5,000 registrants across a number of different disciplines in clinical physiology. These professionals play an integral part in the process of diagnosis and treatment, undertaking procedures such as ECGs, which pose significant risks to patients. That, really, is the point here.

16:00

While the profession as a whole enjoys an excellent reputation and high standards of working practice, the continued lack of statutory regulation for its registrants means that there will continue to be gaps in its oversight, which comes with inherent risks to patients. Therefore, we believe that the Government’s preference for regulation through assured voluntary registration is not sufficient for this particular group of healthcare workers. They need to be statutorily protected; a voluntary scheme is not sufficient and there is a threat to patient safety. I hope that the Government will consider this a reasonable request on the profession’s part. I have to say that I fail to understand why this has not been taken forward and I hope that the Minister will be able to explain to the Committee why clinical physiology cannot have statutory regulation in the context of patient protection. I beg to move.

[Baroness Masham of Ilton]

My Lords, I should just like to add my support for this amendment. Clinical physiologists, who perform some very invasive procedures, feel that they need statutory regulation. They have had a voluntary scheme, which they say is not adequate.

[Lord Walton of Detchant]

My Lords, I should like to ask the Minister to clarify a point of some importance. Many years ago, in the early stages of my neurological career, I was involved in interpreting electroence- phalograms. Subsequently, I was heavily involved in the pursuit of electromyography—a technique for measuring the electrical activity of the muscles in health and disease—and in measuring nerve conduction velocity. I also looked at evoked nerve potentials. A group of individuals grew up in that field originally; it was called the EEG Society. Then there was the Electrophysiological Technologists’ Association—the EPTA—of which I was briefly president. Eventually they came together to form the association of clinical neurophysiologists.

The Health Professions Council regulates 15 health professions, including biomedical scientists and clinical scientists. My understanding is that clinical neurophysiologists, like other clinical physiologists, are not included in or embraced by the term “clinical scientist”. However, I wish to know whether they are covered by the Health Professions Council. If they are not, it is important that they should be regulated. For that reason, if they are not included at present under the terms of the Health Professions Council, I strongly support this amendment.

[Lord Rea]

My Lords, in supporting this amendment I declare an interest. Not only my former patients but I, as a patient, have received skilled help from clinical physiologists. The pacing unit at St Mary’s Hospital, which is run by clinical physiologists, has monitored my pacemaker since it was fitted four and a half years ago. My life has literally been in their hands while they periodically adjust my heartbeat to get the best setting.

The Registration Council for Clinical Physiologists, which has been described, has been trying to persuade the Department of Health to include the profession in the mandatory regulatory framework for health professionals for the best part of a decade. The Health Professions Council recommended in 2004 that clinical physiologists should be included in its regulatory regime, as well as other clinical scientists whose work involves a potential impact on patient safety. The then Secretary of State accepted this recommendation but still no action was taken and has since not been taken despite frequent reminders from me, among others. On my count, 30 parliamentary Questions have been tabled on this issue. It has also been raised in your Lordships' House in a debate on an order to do with the Health Professions Council. I hope that this amendment will serve to speed up the process by focusing the Government’s attention on an overdue step that we feel needs to be taken.

[Baroness Finlay of Llandaff]

My Lords, this group of amendments is very interesting as it reveals the enormous number of people involved in healthcare who literally hold the lives of others in their hands and are not subject to any statutory regulation but are voluntarily registered. I have an amendment in this group which seeks to establish,

“a statutory register of Physicians’ Assistants (Anaesthesia)”

and of other healthcare professionals. I will speak about that in a moment in relation to clinical perfusion scientists.

Physicians’ assistants in anaesthesia already have a voluntary register in place and they applied to the Health Professions Council for registration and had their application accepted. However, that all went on hold with the emergence of this Bill. The Royal College of Anaesthetists does not allow physicians’ assistants in anaesthesia to become associates as they are not registered with the General Medical Council, but it permits them to have affiliate membership. However, the college does not have a regulatory role as such; it is tied up with education and standards.

Physicians’ assistants in anaesthesia urgently need statutory regulation, given the range of invasive, and potentially life-threatening, procedures that they perform and the knowledge and autonomy of practice required in the roles that they carry out. These practitioners perform tasks that, in the UK, were previously carried out only by doctors. They cannot get indemnity insurance for their practice or apply for prescribing rights, even though they sometimes have to be able to respond in a matter of seconds, not minutes, if something goes catastrophically wrong with an anaesthetised patient while the anaesthetist is outside the theatre for whatever reason. They are on a voluntary register, which provides some reassurance for patients and employers, but that cannot realistically be seen as an alternative to statutory regulation. I think that in 2009 they were identified by the Department of Health as being urgently in need of registration. The Health Professions Council felt that these assistants fulfilled sufficient of its criteria to warrant the recommendation for statutory regulation being accepted.

Irrespective of whether Members of this House have undergone a procedure requiring anaesthesia, would they consent to being rendered unconscious by an individual who was neither bound by a stringent professional code of conduct nor properly registered to practise? After all, we would not get into an aeroplane if we did not know that both the pilot and the co-pilot were appropriately qualified to a very high degree, with ongoing continuing professional registration. We trust them just as we trust these physicians’ assistants, but if something goes wrong in theatre it does so with catastrophic rapidity. When I did my training in anaesthesia, on more than one occasion I saw these physicians’ assistants recognise problems arising before the trainee anaesthetists had done so. They carry enormous responsibility during complex procedures.

I have included other healthcare professionals in my amendment as I am well aware that the Government do not like to have enormous lists in a Bill. My amendment would therefore leave the door open to include clinical perfusion scientists—the other group involved in theatre—whose role is primarily to maintain a patient’s circulation during open-heart surgery, during a period of surgical repair when the heart has been stopped. They were recommended in 2003 for statutory regulation.

There have been two high-profile cases involving clinical perfusion scientists. The first fatality, in 1999, led the Southwark coroner to recommend the immediate statutory regulation of clinical perfusion scientists. The second fatality, in 2005, was attributed to inappropriate drug administration by a clinical perfusion scientist during an operation on a five-month-old baby at Bristol Royal Infirmary. That led to the publication of the Gritten report, which concluded that:

“The incident occurred because of latent weakness that lay dormant for years hidden by healthcare professionals compensating for inadequacies within national and local systems”.

The report recommended that action at national level should include,

“regulation and guidance on perfusion practice in cardiopulmonary bypass”.

More recently, there have been fatalities that have led to clinical perfusion scientists’ actions being questioned by coroners—the most recent of these incidents occurring in 2010 at Nottingham City Hospital.

I do not want to scare people from going in for surgery and I do not want to scare Members of this House who may be going in for surgery, but in the current climate people need to know that these very critical roles are being undertaken by people who are on a voluntary register but do not enjoy indemnity, as they would if they were on a statutory register and subject to the rigours of being statutorily regulated.

[Baroness Pitkeathley]

My Lords, I do not want to sound like a broken record in always resisting more statutory regulation or in disagreeing with colleagues with whom I normally agree, but I want to emphasise the application of light-touch regulation. We should use only the minimum regulatory force to achieve the desired result. Therefore, we should be considering extending regulation only where the risks to patient safety and public protection are such that other mechanisms such as those I previously mentioned—employer’s guidance, clinical governance, appropriate delegation and multidisciplinary teamworking—are unable to manage those risks.

When the Council for Healthcare Regulatory Excellence becomes the Professional Standards Authority for Health and Social Care, it will be accrediting voluntary registers as a more proportionate and targeted approach to developing high standards of care for people working in health and social care who are not statutorily regulated. I remind your Lordships that statutory regulation can be expensive and it is important that we explore and develop a range of options for maintaining and improving the quality of care delivered by people working in health and social care. It may be more proportionate, for instance, to promote greater co-operation and sharing of good practice. We seek to find the most efficient and common-sense solutions to the kind of problems that your Lordships have identified.

[Baroness Oppenheim-Barnes]

What proportion of voluntary persons employed in operating theatres are expected to be affected? Is it not the case that the great proportion of them are specialists who are subject to statutory regulation?

[Baroness Pitkeathley]

Currently, a great proportion are in statutory regulation, given that voluntary regulation is being developed. The CHRE is currently working on that.

[Lord Alderdice]

My Lords, I should like to press this question in the context of the amendments in this group. What is the Government’s rationale for making a difference between statutory registration and quality-assured voluntary registration? The noble Baroness, Lady Pitkeathley, has used terms such as “light-touch”, “proportionate”, “appropriate”, “not so expensive” and so on. However, I have difficulty in seeing consistency here.

On the one hand, we can see that there are very small groups such as clinical perfusion scientists who are employed in only a few centres where open-heart surgery is being done. One could see that there may be a degree of expense in setting up a whole scheme of statutory registration. However, when it comes to groups such as clinical scientists and physiologists, there is a much larger number, but almost all of them are employed in the National Health Service. I understand the argument that they are all, or almost all, operating under the supervision of people who are statutorily registered and are operating in the context of the NHS, which deals with financial claims and so on.

16:15

However, as noble Lords will know, I have raised repeatedly—perhaps even tiresomely—the question of statutory registration of psychotherapists and counsellors. When I raised it again not so long ago with the Minister, he responded that, no, the Government did not want to go ahead on that front; they wanted quality-assured voluntary registers. The same kind of rules do not apply. Why? First, there is a huge number of these people—certainly enough for it not to be a financial question, as small contributions from all of them would be enough to set up a statutory registration scheme. Secondly, the majority of psychotherapists and counsellors work outside of, and therefore are not subject to the kind of regulation that takes place in, the National Health Service. On top of that, a large proportion of them work on their own, so they are not supervised by statutorily registered colleagues and they are not employed by employers who, Ministers have assured us, would consider their qualifications and supervision.

Although, in the context of the current crop of amendments, the argument has been made on the basis of expense and on the basis that these people operate within and are employed by the health service—and are therefore under the supervision of statutorily registered senior colleagues—none of those arguments applies to those who are working in the private sector on their own account. Such people are employed only by the patients who are consulting them, and there is a large number of them.

What requirements help Her Majesty's Government to judge whether a profession has statutory registration or quality-assured voluntary registration? None of the arguments that have been adduced is applied consistently.

[Lord Walton of Detchant]

What is troubling me about this whole exercise is that, under the Health Professions Council, statutory regulation applies to art therapists, biomedical scientists, chiropodists, clinical scientists, dieticians, hearing-aid dispensers, occupational therapists, operating department practitioners, orthoptists, paramedics, physiotherapists, practitioner psychologists —in what way do practitioner psychologists differ from the psychologists to whom the noble Lord referred?—and many others. A lot of these people are already regulated. Where the statutorily regulated bodies end and the voluntarily regulated bodies begin is very unclear.

[Lord Alderdice]

It may seem a little unclear to the noble Lord, but it is not so unclear. Psychologists are qualified as psychologists, not as psychotherapists or as counsellors—they belong to a different professional body and have different qualifications and requirements. Psychologists themselves campaigned for many years for statutory regulation and finally got it through the Health Professions Council. Arts therapists and so on went through the HPC because many of them were occupational therapists, but try as I might—and I have been doing so for well over a decade—I cannot get successive Governments to address the question of psychotherapists and counsellors, despite the fact that they constitute a far larger number of people.

My dilemma with the current set of propositions is that, of the arguments adduced to try to persuade noble Lords that a quality-assured voluntary registration scheme is appropriate because the people referred to—the physiologists, the perfusion scientists and so on—are operating within the health service under supervision, are employed there and are smallish in number, none of them applies to this other group of people, for whom I have had precisely the same reply from the Minister. Therefore, I am keen to hear from the Government what the set of criteria is. Is it simply that this Government are not keen to pursue anything in the way of regulation except at the most modest level? If so, that is a legitimate argument but it needs to be made. If not, then I do not quite see the consistency of the current application.

[Baroness Finlay of Llandaff]

Perhaps I may add a small point. I do not know how many physicians in anaesthesia are employed in operating theatres in private hospitals, where an enormous amount of private surgery is done. One of the main reasons for people going to a private hospital is for surgery—particularly elective orthopaedic surgery. Therefore, although I cannot put any figures on this, I do not think that it is correct to assume that these people are necessarily operating only in the NHS and are subject to current NHS structures.

In the new world where we will have a broad range of providers, it will become even more important to know that there is a minimum standard and that all the people at each step of the way will be answerable. The patient may well choose to go to an organisation where these people are employed but the patient will not know that. No one gives him a list and says, “Of all these people looking after you, these will be statutorily registered but these may or may not be on a voluntary register”. If we are thinking about patients taking informed decisions regarding their future, I suggest that the coroners’ reports that we have had to date should already be sounding alarm bells.

[Lord MacKenzie of Culkein]

My Lords, I support this group of amendments. I want to make just a couple of points, as I think that most of the others have already been covered.

I am looking at some information sent in an open letter from the Registration Council for Clinical Physiologists to Anne Milton, the Parliamentary Under-Secretary of State in another place. Interestingly, in that open letter the registration council, which operates a voluntary register, takes the view that the council is rather toothless. It says that the professions covered by clinical physiologists will continue to be,

“saddled with a toothless system of voluntary registration, in which those managing the registers are exposed to unacceptable legal risk when attempting to enforce the meagre sanctions at their disposal and maintain professional standards”.

It says it is evident that those administering the current inadequate voluntary registration process are being threatened with civil action by those whom they are forced to reprimand. It is a pretty poor state of affairs when those who are trying to enforce professional standards are themselves threatened with legal action.

I know from talking to people involved with the registration council that people leave the register when disciplinary issues come to the fore. I gather that in one instance a person left the register when faced with discipline, emigrated to Australia, continued to practise and got in trouble there. As I understand it, the Australian statutory body that exists for clinical physiologists was astonished to discover that there was no statutory regulation in force in this country.

I do not think that we can continue with this so-called voluntary system and light touch. We need to do what other countries do and have statutory responsibilities and statutory training and registration for these very important groups of staff.

[Baroness Northover]

My Lords, these amendments seek to extend compulsory statutory regulation to physicians’ assistants in anaesthesia and clinical physiologists and to make changes to legislation to further provide for the compulsory statutory regulation of clinical physiologists.

I make it clear at the start that healthcare scientists such as clinical physiologists play an important and highly valued role as part of clinical teams, and this is also true of physicians’ assistants. It is a testament to their professionalism that the Department of Health is not aware of any general concerns about the standards of practice of either group. Furthermore, we need to be absolutely clear that the purpose of regulation is to protect the public, not to support the development of a profession.

Given the wider systems of assurance in place such as the Care Quality Commission’s registration requirements, and the vetting and barring scheme, the Government do not consider that the case for compulsory statutory regulation of these groups of healthcare scientists not already subject to regulation, and physicians’ assistants, has been made. However, we agree that there need to be processes to ensure high standards of care, and assured voluntary registration overseen by the Professional Standards Authority for Health and Social Care has the potential to provide this. It will ensure that there are robust standards of conduct and training. It will be open to employers and commissioners to insist on only recruiting staff on voluntary registers. Those doing so would secure many of the benefits of compulsory regulation. Both healthcare scientists and physicians’ assistants already have established voluntary registers and would be well placed to seek accreditation from the authority.

The noble Baroness, Lady Thornton, asked why we were not taking forward the regulation of clinical physiologists as recommended by the Health Professions Council. The recommendations of the Health Professions Council were not based on an assessment of the risk presented by a profession, but rather on whether that profession had already developed processes of assurance which prepared them for professional regulation. There is therefore no evidence that compulsory statutory regulation is necessary to mitigate the risks posed by the professions recommended for such regulation by the Health Professions Council. This is probably why the previous Government did not decide to regulate, although this is an issue that has been flagged up for a number of years. The professions recommended by the Health Professions Council for compulsory statutory regulation will be well placed to join the system of assured voluntary registration that we are proposing.

The noble Baroness, Lady Thornton, asked about research in terms of regulating clinical physiologists. We are not planning on commissioning research into the case for regulating them, but we will review the case for introducing compulsory statutory regulation for clinical physiologists and, obviously, others in the light of experience of assured voluntary registration, and the evidence about risks available.

[Baroness Thornton]

Perhaps the Minister could tell us what sort of timescale she envisages for this, or whether it will have to wait until an accident happens like the noble Baroness, Lady Finlay, recorded and then the Government will deal with it.

[Baroness Northover]

The noble Baroness will be fully aware, because she was a health Minister, that if there is no evidence of there being a risk then you do not choose to regulate. That is presumably why the previous Government chose not to.

The noble Baroness, Lady Finlay, flagged up the position of anaesthetists’ assistants. I had interesting discussions yesterday with an anaesthetist and an anaesthetist’s assistant, and it was very enlightening. As the noble Baroness will know, the anaesthetist is of course ultimately responsible. Assistants must always be supervised by a consultant who needs to be available within two minutes. The issue that the noble Baroness raises is one of quality assurance. As she knows, the Royal College of Anaesthetists runs the training and the registration for those assistants. After they have done a science degree, generally it is 27 months of practice. If the Royal College of Anaesthetists judges that that is inadequate, on the basis of the kind of concerns that the noble Baroness raises, then it is clearly for it to say that there are risks, it has encountered risks, and that needs to be addressed. If this system comes under the quality assurance system that I mentioned earlier, there will be another body looking at whether that kind of training, assurance and registration is adequate. However, there have not been cases flagged up as causing concern. I also point out that there are few anaesthetists’ assistants. They are more generally used in other countries, I gather, but not so much in the United Kingdom. The noble Lord, Lord Alderdice, asked why there is not more statutory regulation. In some ways I think I have addressed that. Although compulsory statutory regulation is sometimes necessary, one has to look at the risks and at what is proportionate.

16:30

[Baroness Thornton]

The health Minister Anne Milton said that those professions in which a patient safety case can be made, including that of clinical physiologists, will be considered for statutory regulation subject to a cost-benefit risk analysis. Will the Government carry out that analysis and, if so, when and in what time? I do not particularly want an answer about what my Government may or may not have done or may or may not have decided. The noble Baroness’s own Minister has pronounced on this matter since the general election so it seems to me that she needs to answer the question: when will they do the risk analysis?

[Baroness Northover]

I have already mentioned to the noble Baroness—she is probably totally familiar with this—that the Department of Health does not have evidence of there being a risk in this regard. Clearly, as I mentioned on the earlier group, these issues will always be kept under review. If the concerns that she has flagged up and if the association, which is particularly encouraging the regulation of clinical physiologists—that is fine; it is all part of professionalisation—flags up particular concerns that emerge from other evidence, then of course the department will take that very seriously. However, things need to be proportionate.

[Baroness Finlay of Llandaff]

I have listened very carefully to what has been said about the assistants relating to anaesthesia, but I also used the more catch-all phrase about the clinical perfusion scientists. I would be grateful if, after this debate, the noble Baroness would write to me and explain why coroner recommendations in relation to clinical perfusion scientists are not considered to be enough of a risk to take action. If one is trying to assess this on a risk spectrum, it would be helpful to understand why a coroner's decision to recommend that this small, contained group of clinical perfusion scientists should be regulated does not constitute enough of a risk to go down that route to regulate them and to have them on a statutory register.

[Baroness Northover]

I am very happy to take away what the noble Baroness has said and to discuss the situation further with her.

We expect the assured voluntary registration to be up and running by 2012. Therefore, afterwards that would need to be assessed to see whether anything further is required, as noble Lords have figured might be the case. We are hoping to see how it all works.

The noble Lord, Lord Walton, flagged up various groups which were regulated and he could not quite see why others were not. Given that I used to bump into the noble Lord, Lord Walton, in the Wellcome Library for the History and Understanding of Medicine, I think he will fully understand that the way in which regulation has grown up has not necessarily been logical or consistent. Therefore, I flag up the 2005 Hampton review on regulation which says that it should be proportionate to the risks that it seeks to mitigate and various other provisions. That is what we are seeking to do. Of course, we shall keep under review what we are doing to see whether it is adequate. In the mean time, I hope that the noble Baroness will be willing to withdraw the amendment.

[Baroness Thornton]

My Lords, I thank the Minister, but this is not yet a satisfactory situation. We might be moving towards one but we are not there by any means. If I were on the register of clinical physiologists I would find it slightly offensive for the Minister to suggest that I was asking for statutory regulation as a kind of professional development of the organisation. Physiologists are very clear in all of their briefings that they think that this is important for patient safety. That is why they want statutory regulation and that is why we need to listen to them very carefully.

[Baroness Northover]

I am extremely happy to acknowledge that.

[Baroness Thornton]

I thank the noble Baroness for that. The noble Baroness, Lady Finlay, made a graphic and powerful case. I thank my noble friend Lord Rea, the noble Baroness, Lady Masham, and the noble Lord, Lord Walton, for their support for the amendment. My noble friend Lady Pitkeathley and the Minister are coming at it from a different point of view. It is entirely possible that an arbitrary decision was taken, quite possibly by my Government, that there was enough statutory regulation. It is possible that this Government need to think that that was an arbitrary decision in the history of regulation and that exceptions need to be made.

There are questions about the limits of assured voluntary registration. Do clinical physiologists carry out invasive procedures that could harm patients? Yes, they do. Are clinical physiologists incentivised to join the voluntary register? No, they are not. A small number of NHS and private employers notionally require applicants to be on their register but there is no mandatory requirement for this. Are professionals incentivised to maintain the voluntary register? No, their activities are carried out on a voluntary basis by the chair and other officers. Does the voluntary register empower patients to make formal complaints? No. While the Health Professions Council operates a system whereby anyone can make a complaint about the fitness to practise of a professional on its register, in most instances members of the public are not aware of the existence of voluntary registers. Finally, does the voluntary register have any powers of enforcement? No, it does not. The RCCP operates a disciplinary code and procedure but it cannot protect patients from continuing to be treated by practitioners who have not been registered and who are potentially unfit to practise. I beg leave to withdraw the amendment.

Amendment 338ZA withdrawn.

Amendment 338ZB not moved.

House resumed.

Independent Commission on Banking

Monday 19th December 2011 Lords Chamber

Statement

16:37

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I shall now repeat a Statement made in another place today by my right honourable friend the Chancellor of the Exchequer.

“Mr Speaker, the Government are proposing the most far-reaching reforms of British banking in our modern history. Our objective is to make sure that what happened in Britain never happens again, that taxpayers are protected and that customers get a better service.

Last year the Business Secretary and I set up the Independent Commission on Banking to look at what I called the ‘British dilemma’: how Britain can be home to one of the world’s leading financial centres without exposing British taxpayers to the massive costs of those banks failing. In the years leading up to the financial crisis, a failure of regulation contributed to the build-up of a debt-fuelled boom. Banks borrowed too much and took on risks they did not understand. When the bubble burst these banks turned out to be too big to fail and the previous Government had to spend billions of pounds bailing them out.

Of course, major financial institutions in other countries were bailed out by their taxpayers, but the British bailouts were on a different scale. The Royal Bank of Scotland bailout was the biggest in the world. The FSA’s recent report into the failure of RBS attributed this to ‘poor decisions made by the RBS management and Board’ against a backdrop of a regulatory regime that failed to stop them. The politicians responsible are named in the report.

This Government are determined to do better at protecting British taxpayers from the cost of failing banks while at the same time acknowledging the importance of the financial sector to our country. Britain should remain home to one of the world’s leading financial centres and the home of global banks. However, the strength of this industry is also a potential weakness to the economy if not properly regulated. The sector supports nearly 1.4 million jobs, not just in the City but across the whole of the UK. The balance sheet of our banking system is close to 500 per cent of our GDP, compared to 100 per cent in the US and 300 per cent in Germany and France. So while a European and international regulatory response to the crisis is important, we cannot rely on this response alone to make our banking system safe.

We in this Parliament have to take action, and under this Government, we are. We are putting the Bank of England back in charge of prudential regulation. We have created the Financial Policy Committee to look at risks across the financial system. I also welcome today’s report from the Joint Committee on the Draft Financial Services Bill. I wanted proper pre-legislative scrutiny. That has happened, and we will respond in the new year so that we improve the legislation. We have also introduced a permanent bank levy on wholesale funding, and we have introduced the toughest and most transparent pay regime of any major financial centre in the world. However, we also need to address the structure of our banks. That is why the coalition Government set up the Independent Commission on Banking. I want to thank Sir John Vickers and the other members of the commission—Clare Spottiswoode, Martin Taylor, Bill Winters and Martin Wolf—again for their impressive report.

The commission made three main recommendations: first, that everyday high-street banking services should be separated from wholesale and investment banking activities, and that this be done via a ring-fence; secondly, that banks be required to have bigger cushions to absorb losses without recourse to the taxpayer; and thirdly, that competition in the banking sector be strengthened by increasing the number of banks on the high street and the power of customers to switch accounts. When its final report was published in September, I made it clear that I welcomed these recommendations in principle, and would return to the House by the end of the year. Today I fulfil that commitment.

Let me now set out in detail how the Government plan to respond and invite further views before we publish a White Paper next spring. First, the Government will separate retail and investment banking through a ring-fence. It is important to know that this ring-fence will not prevent banks failing, but it does mean that if banks get into trouble, those elements of the banking system that are vital for families, businesses and for the whole economy can continue without resort to the taxpayer. So the following will be in newly ring-fenced banks: the deposits of individuals; their overdrafts too; and the deposits and overdrafts of small and medium-sized businesses. They will all be kept separate from riskier wholesale and investment banking—which will have to be outside the ring-fence.

Larger corporate deposits and lending, and private banking, can either be in the ring-fence or outside. The ring-fenced bank will be legally and operationally independent. It will be able to finance itself independently, have its own board and there will be limits on the amount it can lend to the rest of the group. The commission’s interim report proposed a de minimis exemption for small banks that were clearly not systemic and we invite opinion on whether to proceed with this.

Our objective is clear. We want to separate high street banking from investment banking to protect the British economy, protect British taxpayers and make sure that nothing is too big to fail.

Secondly, we will make sure that banks have bigger cushions, so they are better able to withstand losses. The international Basel III requirement—which the UK was instrumental in negotiating—requires banks to hold minimum equity capital of 7 per cent, and there is a top-up for systemically important banks. We will go further. Large ring-fenced retail banks will be required to hold equity capital of at least 10 per cent. There will also be a minimum requirement for the loss-absorbing capacity of big banks of at least 17 per cent. This requirement will apply to the UK operations of British banks. It will also be applied to the non-UK operations of UK headquartered banks, except where they can demonstrate they do not pose a threat to the UK taxpayer.

I can also confirm that this Government will introduce the principle of depositor preference. In other words, the principle that unsecured lenders to banks, who are better placed to monitor the risks that banks are taking on, should have to take losses ahead of ordinary depositors. We seek further views on the best way to implement this principle. This comes on top of the guaranteed protection that the Financial Services Compensation Scheme offers, which covers 100 per cent of eligible deposits up to £85,000.

All these proposals on loss absorbency will also strengthen the European single market. One of the greatest distortions to the single market in banking is the perceived implicit taxpayer guarantee for all European banks. Through these proposals the UK is setting out a plan to remove this distortion for UK banks. The European Commission has indicated plans to consider what it can do to reconcile that distortion at an EU level. I welcome that, and the UK will engage actively in the debate.

This House and other member states have objected to the European Commission's proposals to impose maximum standards for bank capital. These proposals undermine efforts we and others are making to improve financial stability and the single market. In the view of bodies like the IMF, the European Commission's proposals also water down the international Basel III agreement, giving exemptions to globally active banks in certain European countries. We will be seeking, with others, changes to ensure that the EU faithfully implements international agreements.

Thirdly, the Government will take action to increase competition in the banking sector. The disappearance of banks such as Bradford & Bingley and the decisions taken by the previous Government on the merger of Lloyds and HBOS mean the banking sector is dominated by a handful of large banks. Last year, just four banks took 70 per cent of the market share. We need new banks to enter the market to provide consumers and businesses with more choice. The Government announced the sale of Northern Rock to Virgin Money last month, creating a new competitor in our retail banking sector.

In the coalition agreement, we made clear we wished to foster diversity in financial services, including promoting mutuals. We welcome last week’s announcement that Lloyds has identified the Co-op as preferred bidder for the divestment of more than 600 branches to create a strong challenger in the high street. We will also make it easier for people to switch their current accounts. This recommendation from the commission has received less attention from the media, but could be of huge benefit to millions of customers. The idea is that individuals and small businesses can switch to another bank within seven days and all the direct debits and credits will be switched for them at no cost. The Government have secured the banking industry’s agreement that it will implement these proposals by September 2013.

We will also support the Treasury Select Committee’s proposal to bring the Payments Council within the scope of regulation and I can confirm that our financial services legislation next year will specify that one of the objectives of the Financial Conduct Authority is to promote effective competition in the interests of consumers. A new statutory competition remit will provide the FCA with a clear mandate for swifter, more effective action to address competition problems in financial services. So within months of the ICB report, legislation to bring this change into force will be introduced.

This brings me to timing. Some have questioned whether the Government will seek to delay implementation of these reforms—questions that come from people who never even contemplated reform when they were in office. In fact the reverse is true. On the advice of Sir John Vickers and others, I will be bringing forward separate legislation to implement the ring-fence. The Government’s intention is that implementation should proceed in stages, with the final changes related to loss absorbency fully completed by the beginning of 2019 in line with the Basel agreement. But I can confirm to the House today that primary and secondary legislation related to the ring-fence will be completed by the end of this Parliament in May 2015 and banks will be expected to comply as soon as practically possible thereafter. The Government will work with the banks to develop a reasonable transition timetable.

Of course, there are both costs and benefits to these reforms. The Government estimate the total costs to UK banks to be between £3.5 billion and £8 billion, broadly in line with the commission’s estimate. Most of this reflects the cost to them of removing the subsidy that comes from any perceived implicit taxpayer guarantee, which is precisely what we intended. The cost to GDP is estimated by the Government at just £0.8 billion to £1.8 billion—slightly lower than the commission’s estimate. These are far outweighed by the benefits of the ICB’s recommendations. Even a relatively modest reduction in the likelihood or impact of future financial crises would yield an incremental economic benefit of £9.5 billion per year. Such is the cost of financial crises to the economy. Since the wholesale arms of non-UK banks would be unaffected by these reforms and the principal recommendations relate to UK retail banking, the competitiveness of the City of London as a location for international banking will not be affected.

We are fixing the banking system to protect taxpayers in the future. But we also need to clear up the mistakes of the past. I have already mentioned Northern Rock and Lloyds but the biggest call on the taxpayer was the bailout of RBS. The FSA’s recent report was a damning indictment of all that went wrong in this crisis. Those responsible are clearly identified in it. We need to deal with the mess that they created.

Despite promises from the previous Government that taxpayers would profit from the RBS bailout, the Government’s shareholding is now worth around £27 billion less. We are already reforming the regulatory structures that allowed these catastrophic failures to occur. Bonuses are a fraction of what they were four years ago. Early this year we placed a limit of £2,000 on cash bonuses for RBS and Lloyds. We have made it very clear that the bonus pool next year must be lower again and more transparent. We are also clear that at a time like this the Financial Policy Committee’s advice should be followed—that bank earnings should be used to build capital levels, not pay out large bonuses.

RBS itself has also made significant changes since 2008, including reducing the size of its investment bank by half. But I believe RBS needs to go further and the management agrees. We are the largest shareholders. Let me set out our view: RBS has already announced that it will further shift its business strategy towards its personal and SME customers and its corporate banking business which serves UK and international companies. We believe that RBS’s future is as a major UK bank, with the majority of its business in the UK and in personal, SME and corporate banking.

Investment banking will continue to support RBS’s corporate lending business but RBS will make further significant reductions in the investment bank, scaling back riskier activities that are heavy users of capital or funding. RBS should emerge a stronger, safer bank, able to maintain lending to businesses and consumers, and which in time can be returned to full private sector ownership.

The British people are angry about what happened in our banks and angry at the politicians who let it happen. This coalition Government see two parties working together to clear up the mess of the past and to create a banking system that protects taxpayers and serves customers better. Today, we present the most far-reaching changes to banking in our modern history so we can build an economy that works for everyone. I commend this Statement to the House”.

My Lords, that concludes the Statement.

16:55

[Lord Eatwell]

My Lords, I am most grateful to the noble Lord for repeating the Statement made by the Chancellor of the Exchequer in another place. However, I regret that effective scrutiny by this House has been limited by the Government providing the 80-page response only half an hour before the noble Lord got to his feet.

As the Statement makes clear, banking policy in this country has two potentially conflicting goals: first, to ensure that a stable domestic financial system supports the real economy with a steady and reliable flow of appropriately priced credit, together with other domestic and international banking services; and secondly, there is the goal to sustain the City of London and other UK centres as the world’s premier offshore financial centre, providing a wide range of financial services that transform and repackage saving flows from all around the world. This was the core conflict highlighted by the Independent Commission on Banking—the trading activities of the offshore centre can inflict instability and contagion on the domestic economy. The proposal of the ring-fence that the Government are endorsing today is a response to that core conflict. It is an inadequate response, but perhaps something is better than nothing.

Why is it an inadequate response? Noble Lords may be surprised to learn that more than three years on and contrary to the assertions of the ICB in its final report, nothing in these policy proposals would have prevented the collapse of Northern Rock. The reason is that there are two serious flaws in the ICB approach. First, there is the belief, echoed by the noble Lord, that moving to a 10 per cent capital to risk-weighted assets ratio will provide the resilience to the banking sector required to head off a serious crisis. This belief is a fantasy without empirical foundation. For example, Allied Irish Bank had capital in excess of the maximum now being proposed by the Government prior to its collapse. It was not enough. In a real financial crisis, no feasible capital ratio will be enough. While on the subject of risk-weighted assets, do the Government intend to maintain the Basel II approach that leaves the calculation of these risk-weights to the banks themselves? With respect to other primary loss-absorbing capacity, what is the Government’s view of the buoyancy of the market for these instruments on which they put so much weight and which do not at present exist?

Secondly, the report maintains the outdated and indeed discredited approach of focusing on the asset position of the banks and has very little to say about the liabilities side of the balance sheet. Hence, the ring-fencing proposals are all about what is done with depositors’ assets and the capital needs are related to that dubious measure of risk-weighted assets. But in the case of Northern Rock, the collapse was entirely attributable to what was happening on the liabilities side of the balance sheet. It was the inability to turn over short-term funding that resulted in the taxpayer needing to provide a £30 billion rescue. The ICB’s claim that current liquidity proposals could have prevented this is, I believe, wishful thinking. By the way, in the glance that I have been able to give the Government’s response, I would suggest that the illustrative diagrams of balance sheets on page 28 are profoundly misleading as the boxes do not represent the proportions of liabilities and assets as they are presumed to do. I shall return to the issue of the liabilities side of the balance sheet later. For the moment, I give one cheer to the Government’s endorsement of the ICB’s approach. At least it is better than nothing. Ring-fencing is the right thing to do even if they put the fence in the wrong place.

Crucial to the entire approach will of course be the construction and policing of the ring-fence. Can the noble Lord tell the House whether the Government have accepted all—I stress, all—of the ICB’s proposals on the construction of the ring-fence? In particular, the Government seem to suggest that ring-fenced banks will be permitted to hedge risks to which they are exposed in derivative markets. If they are allowed to hedge, how is the line to be drawn between hedging and speculation, and who is to draw that line? A major hole in the ring-fence as it now stands—or perhaps it is a flexible thing as it now waves in the wind—is that banking activity for large companies can take place either within or without the ring-fence. This means that organisations that produce well over half the UK’s GDP will have banking services outside the ring-fence. In that case, will not banking operations outside the ring-fence be too big to fail, because they could bring down major British companies, and will not the exposure of the taxpayer that the ring-fence is supposed to eliminate be almost as great as it ever was?

More generally, it is a well known outcome of regulatory activities that they stimulate a creative response from the banks, creative in the sense that they work out ways to circumvent and/or evade the regulations. Hence there will be a need to keep the operations of the ring-fence under continuous review. How do the Government intend to do that? The response states:

“The Government believes that the location of the ring-fence should be flexible”.

What does this mean—it sounds like a fine opportunity for lobbying to me—and who will determine the location of this “flexible” fence? Would it not be appropriate to keep the ICB in being and charge it with the task of reviewing regularly the performance of the ring-fence?

One of the declared objectives of the ring-fence, which the noble Lord repeated, is to protect the assets of depositors from the casino operations of the investment banking divisions of the banks. Where a ring-fenced bank is the wholly owned subsidiary of a bank holding company and that holding company fails, perhaps due to casino-style activities, will its creditors have access to the assets of the ring-fenced bank? If not, why not? If so, what is the value of the ring-fence?

I turn to the liabilities side of the balance sheet. Am I right in saying that the Government have no intention of limiting the wholesale funding of the balance sheet other than through the imposition of a leverage collar that fails to discriminate between deposits and wholesale funding? Why are the Government therefore intent on penalising banks that have a strong deposit base—banks that proved to be the most resilient during the financial crisis? Of course, the FSA’s proposals on liquidity and a leverage collar will improve the situation, but surely they are not enough. Why do the Government not take note of the research that demonstrates that deposits by families and firms are “sticky”, while wholesale deposits embody greater risk? On the other hand, what is to be the role of the interbank market within the ring-fence?

On competition, the noble Lord made it clear that the higher levels of capital and loss absorbency will apply just to UK banks. What of the branches of non-UK banks operating in the UK, such as Deutsche Bank? What is the Government’s assessment of the competitive impact on UK banks of branches of European or other banks operating in the UK not being required, as the response states, to have the same levels of loss absorbency?

On timing, the ICB said that the ring-fence should be in place as soon as possible and well before the Basel III deadline. The Statement refers to compliance with the legislation on ring-fencing being as soon as “practically possible”. Who is to determine what is practically possible and what are the criteria for that determination?

What do the Government expect to be the impact of these recommendations on the supply of credit? Given the abject failure of the Government’s Project Merlin and the desperate need to increase lending at reasonable rates to UK SMEs, the Bank of England’s executive director for financial stability has suggested that the ratio of capital requirements to risk-weighted assets should be lowered, not raised as the ICB and the Government recommend. Do the Government agree with the ICB or with the executive director of the Bank of England?

I welcome the Government’s announcement on the Royal Bank of Scotland. These are changes that we on this side have urged for some time. This is a taxpayer-owned bank and it should pursue the taxpayer interest.

I therefore give one cheer for a faltering step in the right direction. We will seek significantly to improve the approach when the Government bring forward their legislative proposals.

17:05

[Lord Sassoon]

My Lords, I suppose I should be grateful that we got one cheer from the noble Lord, Lord Eatwell, who is a hard man to please. I am sorry that he finds serious flaws in the ICB’s analysis where most other commentators have not found flaws with what is widely recognised as an impressive and important analysis and one that is being looked at well outside the UK for the light that it sheds on continuing issues that other countries have around their banking systems.

I shall take a number of the noble Lord’s many questions. First, he asked about risk weights and the loss-absorbing capacity. The ICB did a detailed analysis of almost 40 banks. Its key chart is picked up in the Government’s document today. Of the 40 banks that suffered significant losses that the ICB looked at, the noble Lord, Lord Eatwell, highlighted the Anglo Irish Bank as the only one where the loss exceeded the 17 per cent—I think he referred to 10 per cent—loss absorbency which the ICB recommends for big banks. As my right honourable friend the Chancellor of the Exchequer made clear, this is not about making sure that no banks will fail but about a combination of things, including loss absorbency, that will make our banking system much more resilient in the face of the range of losses that are likely.

The noble Lord also asked whether the Government have accepted all the ICB’s proposals on the ring-fence. A detailed discussion of ring-fencing issues takes up one chapter, or some 15 pages, of our response today. A number of outstanding technical considerations are clearly set out in the discussion. As I have already said in repeating the Statement, this is the first round of a sequence of consultation and draft legislation, both primary and secondary, to get this right. I make no apology for not having answers to all the very detailed questions at the moment. We are putting out this 70-plus-page document today as the start of the discussion that must go on.

The noble Lord then questioned what activities should be inside and outside the ring-fence. On the question of where the ring-fence is located, he picked up on the adjective “flexible”, which is advisedly used in the Government’s response document. The key driver about what should be inside and outside the ring-fence in the ICB’s analysis is whether it is an essential banking service, the interruption of which would cause great difficulty. For individual and SME deposits and overdrafts it is quite clear that interruption of normal banking activity would cause hardship whereas large corporates and private banking are clearly categories of banking consumer much better able to look after themselves for a period in those circumstances. That is what has determined in principle where the ring-fence should be. On this flexibility, in order to have an efficient banking system, it is quite right that the banks should be able to decide on a one-off basis whether their large corporate activity should be inside or outside the ring-fence so that they can match up their activity on the lending side with the structure of their deposit base.

The noble Lord, Lord Eatwell, then raised questions about the situation of branches of a European bank in this country. It is certainly the case, as he recognises, that branch activity of a European bank would not fall within the provisions of this ring-fence. They cannot and should not do so under the arrangements for the single market. However, in relation to branch activities in this country, the supervisors—the FSA and, in future, the Bank of England—will of course have regard to subsidiarisation in relation to the scale of activities that are carried out through foreign bank branches.

Lastly, the noble Lord asked about implementation and timing. As I have said, both the primary and secondary legislation will be completed in the course of this Parliament. The final part of the proposals in line with the ICB’s timetable—on loss absorbency and with regard to capital—will be in place on the same timescale as the Basle III implementation in 2019, but between now and then we expect to see the ring-fence itself put in place. As I have said in repeating my right honourable friend’s Statement, we will work with the banks on what is judged by the Government to be a practical implementation timetable. That, I emphatically say, will, along with all the rest of it, be a decision for the Government and, where appropriate, for the legislation that will come before Parliament in due course. We have been fast on the case to respond to what has been an enormously detailed report and, as I say, we will get the legislation through in the course of this Parliament.

17:12

[Lord Newby]

My Lords, I warmly welcome these proposals because we have been advocating many of them for a number of years. I have two questions. First, on timing, the noble Lord has made it clear that the aim is that primary and secondary legislation will be completed by 2015. Can he confirm that, given that there will be a lot of secondary legislation, the Government intend that the primary legislation will be introduced in the 2012-2013 Session, so that we can get that through and then get all the secondary legislation through well in advance of an election in 2015?

Secondly, on bonuses, the Minister made it clear that the Government wish the bonus pool in respect of RBS and Lloyds to be lower next year. Can he confirm that the Government have done more than express a view on this, and have in fact instructed UKFI that the bonus pool, particularly in respect of RBS, shall be significantly less than it was last year and that we have not a vague aspiration but a very firm steer from the Government?

[Lord Sassoon]

My Lords, I am grateful to my noble friend for welcoming the Government’s response to the ICB. On his question about timing, I cannot go further than what I said already: that we will bring out a White Paper in the spring, followed by the draft legislation and that we will get all the draft legislation, primary and secondary, through in this Parliament. There is a detailed table in the response document published today of all the ICB recommendations and whether they require legislation or could be put in place by regulatory action. There are other things which are already proceeding, particularly on competition, and there are other matters where regulatory action can take place.

I was grasping to think what my noble friend’s second question was. I can indeed confirm what he said about the Government’s firm intention regarding bonuses for this year.

17:15

[Lord Lawson of Blaby]

My Lords, I warmly welcome the Government’s determination to press ahead without equivocation with the radical proposals in the Vickers commission report. My noble friend will be aware that ever since the banking crash of 2008 I have been campaigning for a complete structural separation of retail and investment banking. The proposals go a long way towards that, although not all the way.

I realise that there is a problem, which the Vickers commission recognised, that full enforced structural separation is probably contrary to European law, but, as I am sure that my Liberal Democrat friends would agree, that is not something that we should allow to stand in our way.

My concern is twofold. First, the top management of banks may be deficient in judgment and in some cases may be deficient morally, but they are certainly not deficient in well advised ingenuity. There is a real risk that they may find ways around the ring-fence if there is not full structural separation. Secondly, what we need is a cultural separation. We need to have a culture of prudence back again in retail banking, unlike the culture of adventure, if I may call it that, in investment banking.

I confess to my noble friend that I am concerned about the difficulty of having two totally separate cultures in one organisation. When this is in place it will be necessary, as the noble Lord, Lord Eatwell, said, at least to keep it under review all the time, although I think he is wrong in saying that we should keep the Vickers commission alive to do it. We should charge the Bank of England and the organisations that have been set up under the new regime with the responsibility of keeping this under close monitoring all the time, so we may need to go to full separation.

Finally, on the timing—I will confine myself to the ring-fencing—I am very glad that the ring-fencing legislation is going to come forward first, but there is bound to be a time lag because not only is the legislation complex but the banks will then need time to change and reorganise themselves to implement whatever the final decision of Parliament is in that legislation. I urge my noble friend to introduce the legislation not merely in this Parliament but in its next Session.

[Lord Sassoon]

My Lords, I well recognise the consistency, firmness and clarity with which my noble friend has held his views on separation from very early on in this debate; we discussed it three years ago. However, the Government agree with the ICB that full separation is not the route to go down. I say to him that having independent directors on the boards of the ring-fenced banks will go a long way towards making up for, as he puts it, possible deficiencies of top management and their ability to get around these things. Having independent directors of ring-fenced subsidiaries is a model that has worked well in utility companies. As he says, it is right that the Bank of England will be watching this in its new role of supervising the system.

[Lord McFall of Alcluith]

My Lords, when Sir John Vickers appeared before the Draft Financial Services Bill Joint Committee, it was clear that his report would not solve the “too big to fail” issue. What was required was a good regulatory structure, and no regulator globally succeeded in that.

In the draft Financial Services Bill report there were a number of issues relating to the governance of the Bank of England, and I should like an assurance from the Minister that the Government will take these all-party proposals very seriously. As a previous speaker said, culture is more important than architecture. I think that will be one of the main recommendations of our report.

The Minister mentioned the issue of switching current accounts. Will he accept that the portability of current account numbers is the key? That revolutionised the mobile phone industry. Only with the portability of current account numbers will we see a revolution in switching accounts in the banking industry.

[Lord Sassoon]

My Lords, I can confirm to the noble Lord, Lord McFall of Alcluith, that the Joint Committee’s report, which was published only today, will be taken very seriously on governance and all the other matters that are contained in it. As to switching accounts, I hear what he says about number portability, which is not at all an easy issue, as he well knows. All I would say is that the ability for seven-day switching, including all direct debits, credits and standing orders—which we now have the banks’ agreement will be implemented by September 2013—is a significant advance that will help millions of consumers.

[Lord Higgins]

My Lords, the report by the ICB is very large, comprehensive and detailed. It says that it would be desirable for the Government to express a view on it as soon as possible, which they have done. However, the Statement appears also to include one or two items that—I think I am right in saying—are not in the report. In particular, I understood my noble friend to say that there would be a tightening up of the Basel proposals, or that the Government would propose that. Secondly, he said that there would be depositor preference, which does not appear in the report unless I am mistaken. Will that require primary legislation and, if so, when are we likely to have that? Overall, it seems that we have just had another Statement, which has become available only recently. When will we have an opportunity to debate it? We have not really had any opportunity to comment on it now, since it appeared only a few moments ago.

Finally, on timing, there are two things. I agree very much with my noble friend Lord Lawson about the timing of the legislation. The banks need to know what is in the legislation. We should get that through the House at the earliest possible moment. Saying that we will do it in the course of this Parliament means that it will take far too long. Waiting until 2019 for the overall implementation is absurd. To suppose that there will be no financial crisis that is related to these proposals until 2019 would be the height of optimism. We have to get it through before then.

[Lord Sassoon]

My Lords, on the tightening up of Basel III, as my noble friend puts it, the provisions around loss absorbency of 17 per cent and the bailing provisions are items that go beyond Basel. They are welcomed on a global basis. We now have to make sure that the way in which the EU implements Basel III is not only compatible with Basel III itself but allows the UK to go further for as long as the global community is entirely comfortable with that. Depositor preference requires primary legislation. In relation to primary legislation, discussion of all this and the process, the next major stage will be a White Paper, setting out in greater detail how the remaining important detailed matters will be handled in the draft legislation. The draft legislation will then come. I believe that there will be plenty of opportunity, in a staged way, for noble Lords to consider all the detail.

[Lord Lea of Crondall]

My Lords, is this what one might call the final stage in a number of statements about reform of the banking industry, following what has happened over the past four years? Is the Minister aware of the concern about this up and down the country? I welcome the Statement, with the sort of qualifications given by my noble friend Lord Eatwell.

There is great concern about accounting standards which led to false accounting regarding the state of many banks. While no one is suggesting that any senior banker should be shredded in front of his family, the fact is that there seems to be a total black hole as regards anyone taking any responsibility in the banking industry. Is that not something that still needs to be corrected?

[Lord Sassoon]

My Lords, the report today is a response to the Vickers commission’s work on the structure of banking. I fully accept the noble Lord’s reference to other matters, particularly accounting standards. The committee of this House did some extremely important work in that area. I do not pretend that we are solving everything today and accounting is another issue that I am sure Members of this House will not forget as we go forward.

[Lord Stewartby]

My Lords, will my noble friend say something about supervision and where it fits into this very complicated arrangement of new committees and authorities? The report of the Joint Committee, which was published only today, states that it is planned that microprudential regulation will be done through a new subsidiary body called the prudential regulatory authority. However, regulation is not a micro-activity. Supervision is a micro-activity, but regulation is not. If microprudential regulation is meant to refer to supervision, it would be better to say so and not to put it in that form of verbiage.

[Lord Sassoon]

My Lords, I am sure that there will be other occasions and places in which to discuss the Joint Committee’s important report on the Bill, so I do not want to get dragged too far into doing that. I recognise that, even for those of us who have been involved in the banking industry, confusing “regulation” and “supervision” can sometimes be a trap into which it is easy to fall. Supervision will be the responsibility of the Bank of England in the new structure, if the Bill is passed by Parliament.

[Lord Newton of Braintree]

My Lords, I have two quick questions. First, is there any estimate or expectation of a rise in the costs of retail banking as a result of these proposals? It seems to me that that must be a possibility. Secondly—I declare an interest as a 55-year long customer of Lloyds TSB bank in Harwich, Essex—given that the Minister has welcomed the sale of some Lloyds branches to the Co-op Bank, what will happen if we immediately use our switching rights to go back to another branch of Lloyds Bank if we are sold like a commodity?

[Lord Sassoon]

My Lords, the ICB estimates that the increased cost of borrowing could be of the order of 0.09 per cent to 0.16 per cent as a result of implementing these proposals. That is a very modest additional cost which is well within the smallest ever incremental change to the bank rate introduced by the Bank of England. I will not speculate about what might happen to bank customers where they are sold from one bank to another, but I believe that it is completely right that we should make it easier in all circumstances for bank customers to be able to switch their accounts. That is what the banking system is going to deliver.

[Lord Hamilton of Epsom]

My Lords, like my noble friend Lord Lawson, I shall sleep at night only when retail banks and investment banks have separate shareholders. Will the noble Lord answer my noble friend’s point about the ingenuity of those who run banks to find a way round the ring-fencing, thereby enabling retail banks to continue to back investment banks?

[Lord Sassoon]

My Lords, as I have said, the way that the governance will work is that the ring-fenced subsidiary will have to have independent directors in the way that, for example, regulated utilities have to have directors who are independent of the holding company’s board. That is the principal protection in these circumstances.

[Lord Hollick]

My Lords, I welcome the Government’s response. It is an important step, but only a first step, to what surely must be full separation of the banks. That is the logic of the Vickers report and is, I should point out, the logic of the Government’s response, which states:

“The Government believes that the ring-fenced bank should not be dependent on the financial health of the rest of its corporate group for its solvency or liquidity”.

If that is to be achieved, the treasury function, which is right at the heart of banking, would need to be split and there would need to be two treasury functions. Similarly, loan capital would have to be provided separately from the high street bank. That would simply leave the question that my noble friend Lord Eatwell raised: what happens to the capital in the event that the holding company goes under? Surely, the logic of this is to separate these two completely. Can the Minister confirm that banks would be required to separate the treasury function, whereby loan capital will have to be raised separately for the high street bank?

[Lord Sassoon]

First, I do not accept that the Government’s logic drives towards complete separation any more than the ICB itself argued for it. The ICB and the Government believe that there are efficiency and other benefits in allowing banks to keep the two parts of the business together under one holding company. However, the principal protection in the areas to which the noble Lord refers is that there will be limits on the exposures of the ring-fenced bank to other parts of the group. That is what, in particular, will deal with the noble Lord’s concerns.

[Lord MacGregor of Pulham Market]

My Lords, in the recent hearings of the Select Committee on Economic Affairs, the banks accepted that the Vickers report is more or less a done deal but argued that the costs would be considerably higher than those that Vickers calculated and the costs that the Government have estimated today. If in the forthcoming negotiations there is a major dispute about costs and their possible effect on customers, will the Government keep reminding the banks that there is still more to be done to contain costs on bonuses, salaries and other payments?

[Lord Sassoon]

I agree with my noble friend’s sentiments on costs and I have stressed in the Statement that the position of the Bank of England, at this time in particular, is that banks should be using profits they generate to rebuild their balance sheets rather than pay out bonuses. However, to differ a little from my noble friend, I do not see this as representing any negotiation with banks over the costs. The ICB carried out an analysis, and the Treasury made a separate analysis that has resulted in different figures. We have used the input of the banks and their modelling in order to arrive at those numbers. We have come up with numbers for the costs that were higher in some areas than those originally estimated by the ICB. They are very much based on a lot of numbers that the banks themselves have modelled. I do not see a negotiation to be had in that area.

Health and Social Care Bill

Monday 19th December 2011 Lords Chamber

Committee (14th Day) (Continued)

17:34

Clause 206 : Power to regulate social workers etc. in England

Debate on whether Clause 206 should stand part of the Bill.

[Lord Hunt of Kings Heath]

My Lords, we come to one of the most important parts of the Bill—the regulation of social workers. Although the Bill is entitled the Health and Social Care Bill, the reality is that most of our debates have been about the National Health Service. It is right that in these latter stages of Committee we give a little attention to social care and specifically the condition of social workers.

I do not think that anyone in your Lordships' House will be in any doubt about the scale of the responsibility placed upon social workers or the pressures that they come under. Although Professor Munro’s review was centred on the child protection system, what she had to say about social workers would apply more generally to the profession. I was particularly struck by the conclusion, which stated:

“While well intentioned, attempts in the recent past to improve the child protection system have not secured the improvements children and young people deserve. Professional practice with vulnerable children and families has been driven too much by compliance with regulation and rules”.

The review found that,

“frontline social workers in particular operate within an over-standardised framework that makes it difficult for them to prioritise time to form relationships with children and to understand their needs. In parallel, it has becomes more difficult to provide the range of help and services to respond to the wide variety of needs and circumstances presented”.

The Government have said that they will,

“oversee a radical reduction in the amount of regulation, working with partners to see a corresponding reduction in locally designed rules and procedures”.

They have also said that they want,

“to improve radically the knowledge, skills, and expertise of social workers from initial training through to continuing professional development”.

The Government said in July that they will,

“work with higher education institutions, employers, the General Social Care Council”,

to ensure that the specific capabilities identified by Professor Munro will,

“explicitly inform social work training, professional development and performance appraisal”.

I am sure that that is welcome and would be generally supported. It is interesting that only five months ago the Government were happy to acknowledge the role of the General Social Care Council. It must surely follow by implication that if the Government are seeking to enhance professional expertise and give social workers more discretion on the front line, it needs to be done in the context of a proportionate, though robust, statutory regulation of social workers. That is what the General Social Care Council exists to do. After a difficult start, which many would acknowledge was difficult, it is performing well. This is not the time to tear the General Social Care Council up by its roots and start again, but that is precisely what the Government propose to do in this Bill, by transferring social worker regulation to the Health Professions Council.

Currently, the council has a register of around 200,000 people, covering 15 health professions. If it takes on social workers, it will have a further 100,000 on the register from a single additional profession. I understand that the reason for which the Government have put forward these proposals is related to cost, not the current performance of the General Social Care Council, which the Government, in the form of the Department of Health, have acknowledged to have improved its performance considerably.

The argument on costs falls away immediately. Registration with the General Social Care Council currently costs £30 per registrant. This is a low figure compared to other regulators, and the Government subsidise the council’s operations to the tune of around £16 million a year. The Government want to get rid of that subsidy and their original aim was to transfer the function to an independent body that it was acknowledged would need to charge higher fees to cover costs. Originally, it was intended to make the General Social Care Council independent and for it to recoup all its costs from its registrants. However, the Government argued that an independent self-financing council would be unaffordable for social workers because registration charges for individuals would be in the region of £200 to £300. This calculation did not take on board the work that the General Social Care Council has done in developing a financial plan for independence. My understanding is that the latest calculation from the GSCC is that the actual cost would be far lower, and not dissimilar to the current HPC charges of £76 per annum. I hope that the noble Baroness will answer that point when she responds and not cite those higher figures for costs. I am clear from the evidence I have received that it would be possible to provide independent regulation in a single body for the kind of figure that the Health Professions Council charges.

Concern has been expressed about the Government’s intentions. First, within the social care sector, the transfer of the General Social Care Council to the HPC, a multiple profession regulator with generic professional standards, threatens to dilute the unique identity of the social work profession at a time when, as we know, the profession has come under considerable pressure. Some critics cite the reduced representation of social workers within the new Health Professions Council and the fact that the name of the regulator will not contain the term “social work”. There are also concerns that a generic, multi-professional regulator will not be well suited to deal with the complexities of social work and the social model, which underpins the practice of the profession.

There are also concerns about changes to the regulation of social work students. Like the General Social Care Council, the HPC does not currently register students of the professions it regulates. I understand that consultation is being or will be undertaken by the HPC on this matter, but it is widely expected that it will conclude that the way in which students are dealt with—in other words, that they are not registered—will continue and that, therefore, social work students will not be registered in future.

That is one problem that we face. I make no criticism of the Health Professions Council, but it has a one-size-fits-all approach to regulation. Its philosophy is that it does not really matter who you register—it could be social workers, clinical psychologists or any profession you like—its model will fit. I am worried about that approach for social workers. That is why I have tabled a number of clause stand part amendments. I think social workers need to have regulation that is geared entirely to the social work profession. My amendments are intended to tease out the Government's approach to how, if social workers come within the Health Professions Council, they are to be given special provision. My Amendments 338B, 338C and 338D are aimed to do that by, first, establishing a statutory committee within the Health Professions Council to oversee the social work regulation, to ensure that the appropriate person will be director of social worker professions’ regulation. That is to ensure that a senior officer is directly responsible for social worker regulation and recognised as such in statute. Next, it is important that there are social workers on the council of the Health Professions Council. I do not understand why the council of the HPC is not being dissolved and a new council formed. The number of social workers coming over to the Health Professions Council suggests that that is what should happen: not simply that the council carries on. There should be specific recognition and social workers should be on the council.

[Lord Mawhinney]

My Lords, a couple of minutes ago, the noble Lord said that he was not going to make any criticism of the HPC. He then sets out amendments which tell the HPC how it is supposed to behave. Is there not a smidgeon of contradiction between those points?

[Lord Hunt of Kings Heath]

I cannot see any contradiction, although I will of course search my mind to see whether I have been guilty of such. I wanted to make it clear that I do not seek to criticise the Health Professions Council as a body. As I set it up, I have a certain feeling of support for it. I am not sure that its approach to generic regulation, which essentially says that it can regulate any profession in the health service and does not in any way need to change how it does it, should apply to social work, which is a different profession to which different matters apply.

[Lord Mawhinney]

But is the noble Lord not in effect saying that he does not trust the HPC properly to discharge its responsibilities, so he has to tell it how it should go about it?

[Lord Hunt of Kings Heath]

If I were to say that I did not trust the Health Professions Council, that might be taken as rather pejorative, and I would not seek to do that. It has done a good job on the health professions it regulates. I simply do not feel that it is right for it to regulate social workers. I do not think that it is prepared for it. Its philosophy is not attuned to it. That is why, if the Government insist on going ahead, some protection needs to be given.

My final amendment relates to the name of the new HPC, the Health and Care Professions Council. I am puzzled why “social worker” is not in the title. Why was it felt that when bringing 100,000 people into this body, it was not thought worth putting “social worker” in the title. I do not think that Health and Care Professions Council can possibly describe a body that will regulate 100,000 social workers.

I hope that the Government will be prepared to consider the matter again. I know that they want to reduce the number of quangos and regulators, although, if the noble Baroness had been here for the Statement on the banking system, she would have discovered that all Governments start by having a bonfire of the quangos and then inevitably they start to grow again. We saw in the past few minutes a good example of the Government starting to grow some new regulators. In this case, I do not think that the issue of money comes into it—the cost of the balance sheet is taken off the public purse, because it will be funded by registering. Because I am satisfied that the General Social Care Council can fund this through fees which would be similar to those of the Health Professions Council, I hope that the Government will give this further consideration.

[Baroness Meacher]

My Lords, I support the opposition of the noble Lord, Lord Hunt, to Clauses 206 and 208 to 211 standing part of the Bill, and will also speak to Amendment 338B. The noble Lord, Lord Hunt, has elaborated these issues extremely comprehensively and powerfully. I want to avoid duplication and will therefore concentrate on a few specific concerns that, for me, are the most serious, although the matters raised by the noble Lord, Lord Hunt, are also important to me.

Social work carries onerous public protection responsibilities that, to my mind, differentiate it importantly from the other professions regulated by the Health Professions Council. One issue that highlights that problem is the registration of social work students referred to by the noble Lord, Lord Hunt. This and other key matters are left to regulation under Clause 208 without any clarification of what that will mean in practice.

It is important to bear in mind that social work students have direct and unsupervised contact with vulnerable people, including children, whose lives may be at risk. That is rather different from the contact that other professionals tend to have with individuals. Following an impact assessment, the GSCC, not surprisingly, concluded that compulsory student registration was necessary. At present, the GSCC makes grants to the universities providing social work training. Those grants are conditional on the registration of students. The result is that 95 per cent of students are in fact registered. I am not sure what happened to the other 5 per cent, but in essence it is a form of compulsory registration of students.

As a result, any serious complaint about the conduct of a social work student can be referred for investigation by the GSCC. Although the number of serious complaints is small, it is larger than that of complaints about other professions. It is very important that these individuals are picked up early before they can do any severe damage to young children, or indeed other children. If a student is found guilty of misconduct and dismissed from their course, they cannot simply go across to the other side of London or to Newcastle and register on a different course, as this will be picked up by the GSCC. However, that will be lost in the new system. This system of student registration seems to be an important safeguard in public protection.

As I understand it, the HPC is consulting on whether the registration of students should be purely voluntary, as it is in the other health professions regulated by the HPC and as mentioned by the noble Lord, Lord Hunt. The concern is that the consultation includes all the health professions, which of course will say that registration does not need to be compulsory, and indeed it does not for these other professions. Any social work professional will recognise the importance of the compulsory registration of students, but of course they will be outnumbered by all the other professions. As a result, social work registration is likely—in fact, almost certain—to become voluntary. I understand that Paul Burstow, the Minister in the other place, has some concerns about this. Can the Minister tell the Committee what progress has been made to ensure that social work registration remains, de facto, compulsory under the student arrangements?

It is worth flagging up that Northern Ireland, Wales and Scotland will continue to have compulsory registration of social work students, and England will be out of line if this provision goes ahead. As a result, inappropriate students—potentially dangerous social workers—will come across the border into this country and practise. Do we really want that to happen?

Another issue is the assessed and supported year in employment—the ASYE. This is not yet in place but has been recommended by the Social Work Reform Board and is supported by the GSCC. I understand that senior social work professionals do not expect the HPC to introduce the assessed and supported year for newly qualified social workers because they want a common system for all professionals, as alluded to by the noble Lord, Lord Hunt. This provision is not necessary for professionals without a public and child protection responsibility.

Again, there is a problem here because of the differences between social work on the one hand and all the other professions on the other. As someone who practised social work—albeit briefly and many years ago—I fully appreciate the importance of a year immediately following qualification when social workers carry a lighter case load and receive support with more hands-on supervision to enable them to consolidate their knowledge. You could say that this was all a bit heavy-handed if it were not for the public and child protection duties of these workers. However, it really is important that those people know what they are doing and that they do not miss high-risk cases.

The GSCC wants the assessed and supported year to be a registration requirement in the future. Northern Ireland has this system. Of course, this would need to be tied in with some control over the number of social work trainees, but in my view it is a very important matter. What are the Minister’s plans in this regard?

My third area of concern is the standard of social work training. Those at the head of the GSCC would agree that we need more, rather than less, rigorous regulation of social work training. Social work standards set by the Department of Health have already fallen over a period; certainly they are quite unrecognisable to me. I think all of us who are aware of the Baby P report would agree with that assertion. We can expect these standards to fall further under the HPC because, as the noble Lord, Lord Hunt, mentioned, the HPC has basic standards across all professions at roughly NVQ level 3—not a degree level and not, in my view, a sufficiently high level—and just a few generic standards for each profession. It is not looking for intellectual rigour and does not have practice standards. Its focus is on outputs, which we all recognise and think are a thoroughly good thing. However, we all know that outputs based on book learning without any fieldwork requirements will miss absolutely essential elements of effective social work professional practice. The Social Work Reform Board is setting higher standards but these will not be regulated. Only the most basic standards set by the HPC will have that regulatory framework.

The Government are, I believe, leaving it to the yet-to-exist College of Social Work to promote excellence in social work. The BASW is challenging the establishment of the college, I understand. Will it exist and, if it does, will it be delayed? If so, for how long? I gather that even when it does exist, the college will be toothless—it will have no powers to regulate training at all. It may set standards of excellence but it will have no powers to ensure that those standards are met. Does the Minister agree that social work standards need to rise, not fall? If so, will she agree to take away these concerns and consider how best to ensure meaningful progress on the issue? That is vital to the protection of children and to avoid more Baby P scandals, with huge embarrassment to the Government. I trust that the Minister will take this seriously.

Finally, I ask the Minister what will become of the GSCC code of practice for social care workers, which is another group altogether. It is important that this code of practice is retained as an element in the standards framework for social care. This is all about standards and the quality of provision. Will this code of practice be hosted by Skills for Care in the interim before any registration of these workers, or will it be lost? I reinforce the point made by the noble Lord, Lord Hunt, about the spurious financial justification for the abolition of the GSCC. I, too, understand that, financially, keeping the GSCC would stand up perfectly well—it could be self-funding on a similar basis to the HPC. I hope that the Minister will be able to explain this.

Very real risks arise from this planned merger. England will move out of line with its neighbouring countries, and we will reduce standards and safeguards in a profession at the front line of child protection. Is it really too late to rethink this high-risk plan?

[Baroness Pitkeathley]

My Lords, I have interests to declare other than being chair of the Council for Healthcare Regulatory Excellence in that I chaired the advisory body that led to the setting up of the General Social Care Council, and I was its first chair.

It is not for me to question the Government’s decision on these matters, but I draw your Lordships’ attention to the fact that neither the decision nor its implementation have been easy for those involved. I pay the warmest possible tribute to colleagues at the General Social Care Council and the HPC for the way in which they have dealt with this difficult situation. In particular, I acknowledge the role of the oversight group, which is chaired by Harry Cayton, the chief executive of the CHRE, and consists of colleagues from both organisations and other interested parties. However difficult those discussions may have been at times, the professionalism and commitment of those involved to the safety and interests of the end users of social workers’ work have been exemplary, as has been the commitment to ensuring that there should be as little disruption as possible to their functions during any transition period. Thanks to that professionalism, these reforms will allow for the greater integration of health and social care regulation through the renamed Health and Care Professions Council. Regulation by the HCPC—I shall have to get used to the new initials—will extend regulation to the competence of social workers, as well as to their conduct, and thus improve public protection.

I have some concerns about the proposals for the governance of the HCPC, as they do not reflect the general direction of travel in recent reforms across professional regulation. These have emphasised and focused the regulator’s governance and operations on the primary duty of public protection, not of professional representation. Historically, allowing reserved places for particular professionals in councils and committee structures was thought to be damaging to public confidence in regulators and in their decisions about standards and fitness to practise. These proposals might therefore represent a step backwards and not demonstrate good governance principles for professional regulation.

The HPC has a strong track record in taking on new registers, and has established quality assurance mechanisms to facilitate appropriate input from professional expertise, where appropriate. I hope that we shall be able to see that this is an important development, and one that protects all those professions, as well as, most importantly, the public, in the integration of social care and health in the way that we have been calling for in so many debates during the course of this Bill.

18:00

[Lord Walton of Detchant]

My Lords, I shall be brief because most of what I would hope to say has already been said by the noble Lord, Lord Hunt, by my noble friend Lady Meacher, and by the noble Baroness, Lady Pitkeathley. This Bill, in Clause 209, will abolish the General Social Care Council and place social worker and social care assistant regulation in the Health Professions Council, which is to be renamed the Health and Care Professions Council. This is highly undesirable for a profession that faces enormous challenges and which has only had its own regulator for just over two years. Is it possible for the Government to turn back from the brink? To take the regulation, education and performance standards of social workers and social care assistants—100,000 of them—into a body such as the Health Professions Council is likely to overload considerably the administrative procedures and activities of that council.

If this change is inevitable, the amendments that have been tabled by the noble Lord, Lord Hunt, and others are worthy of very serious consideration. They would give social care and social workers a very special and identifiable voice in the Health Professions Council. Is it really appropriate that this mass of social workers should be regulated by a body that already regulates art therapists, biomedical scientists, chiropodists, clinical scientists, dieticians, occupational therapists, physiotherapists, and many others—people who all work primarily in the health field? I quoted many of the bodies regulated by the Health Professions Council earlier today. It seems that putting the social care profession under this council is going to make it a very uncomfortable bedfellow.

I wholly appreciate the Government’s wish to have a bonfire of the quangos, and I understand why they wish to reduce the number of regulatory authorities, but there is no doubt that their last mechanism for doing this, when they brought together three major bodies and cumulated them into the Care Quality Commission, has been struggling to fulfil its responsibilities. It is functioning very effectively, but it has had a massive task in taking on all the additional responsibilities that have fallen to the Care Quality Commission since that merger. I fear that the same problems might well emerge in relation to this proposed merger, about which I therefore feel very uncertain and somewhat uncomfortable. I only wish that the Government felt able to think again.

[Lord Newton of Braintree]

My Lords, prompted only by the debate, I ask one simple question of my noble friend on the Front Bench. What assurance can she give me, in the light of the concerns that have been expressed, that this move will not end up with the same problems that we have had with the CQC, which was asked to take on too much, too fast, and proved incapable of doing it effectively?

[Baroness Northover]

These amendments on whether the clauses should stand part relate to the transfer of the regulation of social workers in England from the General Social Care Council to the Health Professions Council, and I thank noble Lords for them. The regulation of social workers in England is a very important issue, and I welcome the opportunity to discuss it.

The noble Lord, Lord Hunt, having played a key role in the establishment of various of these bodies, argues his usual very strong case. We are committed to the development of the social work profession and the transfer of the regulation of social workers in England to the Health Professions Council as part of the ongoing work to reform the profession and to ensure that such regulation is effective and sustainable. Like the noble Baroness, Lady Pitkeathley, I, too, pay tribute to those who have been involved in these changes. I have met a number of them and find impressive their commitment to the profession and to making sure that, whether they supported the changes in the first place or do now, they are doing their very best to make sure that this works as effectively as possible. The noble Baroness’s tribute to them is well deserved.

The purpose of compulsory statutory regulation is to assure the quality and safety of the regulated professions. That, of course, is separate from the development of the profession itself. We are clear that if we separate professional regulation from professional representation, action needs to be taken to ensure that social work has a strong professional voice, and that is why we are supporting the development of the College of Social Work and the appointment of a chief social worker. The proposed transfer of functions to the Health and Care Professions Council will bring a number of further benefits in the form of standards of proficiency, many of which will have been developed by and tailored for the profession, and a fitness to practise process that will look at conduct and competence in the round.

The noble Lord, Lord Hunt, raised some issues about the General Social Care Council and the costs and so on. The council has made progress in developing the organisation since the discovery of a backlog of contact cases in June 2009. However, while the council is improving, there is still a lot of work to be done to bring it into line with the other professional regulators, such as the Health Professions Council. In addition, the council estimated that its costs would significantly rise as a result of these changes, and it would have been challenging for individual social workers to meet those costs.

[Lord Hunt of Kings Heath]

The noble Baroness says that, but my understanding is that the latest estimate given by the GSCC is that as an independent regulator, the cost to registrants would be no different from that to the cost of registrants under the HPC, so I just do not understand the costs issue.

[Baroness Northover]

As the noble Lord will be aware, the figures provided by the General Social Care Council indicated that the costs would rise from £21 million to £25 million per annum, which would indeed cost about £250 per social worker. I realise that the council later revised this downwards, but the noble Lord knows as well as I do that those were the original figures based upon what the council estimated at the time. Even with the revision downwards, it was still not in line with the HPC, as I am sure the noble Lord is well aware.

However, it is extremely important to make sure that the arrangements that are in place regulate the social work profession properly and separate out the professionalisation of social work. The noble Lord will remember that he asked a question on this, and I drew the distinction for the medical profession with which the noble Lord, Lord Walton, will be familiar; the GMC regulates the medical profession, and the royal colleges do a fantastic job in promoting the profession and taking it further. The original arrangements that the noble Lord introduced were an earlier stage for social work, and the task now is to take it to the next level of development.

Regulation by the Health and Care Professions Council will bring social work regulation in England within the scope of the professional standards authority, with the added scrutiny that that will bring. It is our view that it would be wrong to require the Health Professions Council to move away from its tried and tested system of regulation solely for the social work profession.

[Baroness Meacher]

May I ask the Minister whether she agrees that the standards set by the HPC are just lower than standards that social workers are used to and require to do the job properly?

[Baroness Northover]

I am not sure that I would agree with that. If the noble Baroness bears in mind that the HPC will regulate the profession and that other means will be used to drive further forward the training standards and the education of the profession in conjunction with the regulator, it may very well be that those two things have become conflated and it is important that they are separated out.

[Baroness Meacher]

Would the Minister be willing to write to me to explain how these things will work? As I understand it, some standards might be set elsewhere but the standards that will be regulated will be those of the HPC, which will be very low. The HPC is the one with the regulatory powers and therefore it will not regulate the higher standards that might be set, for example, as good examples by the college. It would be helpful if we could have an explanation of how that will work in practice.

[Baroness Northover]

I am more than happy to write to the noble Baroness. In the discussions that I have had with various organisations, including the HPC, that is not the conclusion that I come away with. I hope that she is reassured.

[Lord Walton of Detchant]

I apologise for interrupting and I do not wish to prolong the debate but the noble Baroness was kind enough to refer to my presence at the General Medical Council, which ended in 1989. Things have changed a little since that time. Of course, the GMC was concerned primarily with standards of education and ensuring that those who were properly educated and qualified were fit to practise in the first instance. Secondly, it was concerned with fitness to practise and with individuals in the profession who deviated from proper standards of practice as defined by the standards committee. It was concerned with the ethics of the profession and with ongoing and further education as well as with many other responsibilities. My understanding was that all those matters were within the ambit of the General Social Care Council in relation to its responsibilities. When the General Social Care Council transfers to the Health Professions Council, can we be assured that all those responsibilities that fall to the General Social Care Council, which is very young and only just finding its way, will be taken on board?

[Baroness Northover]

I will write with all the details so that noble Lords can see that there is no falling back in terms of the standards that people need to reach. We would hope that this separation out will drive standards up further. I will write to the noble Lord so that he can see that for himself.

On whether there should be a specific mention of social workers in the HPC and on the other points raised by the noble Lord, Lord Hunt, currently none of the professions regulated by the Health Professions Council has its own committee, director, or representation on the council. Neither is any profession mentioned in the council’s title. Ultimately, it should be for the Health Professions Council to decide how best to regulate social workers and it has already established committees and appointed staff. It is very actively involved with the organisations involved in the transfer to see how best they need to gear things so that they are dealing with social workers appropriately.

The Council for Healthcare Regulatory Excellence has made it clear that in its view it is important that council members are focused on the governance of the organisation rather than on representing particular professional interests. We agree with this. The proposed new name of the council was decided upon with reference to the views of the Social Work Regulation Oversight Group, which includes in its membership Moira Gibb, chair of the Social Work Reform Board. None of the professions that the Health Professions Council currently regulates is specifically mentioned in the name and it would not be right to single out one profession now.

The Health Professions Council does, of course, recognise how vital the expertise and knowledge of social workers will be if it is to regulate them well. Its draft standards of proficiency for social workers have been developed by a professional liaison group which included representatives of social workers, their employers and educators. In addition, it uses members of a profession as partners to support its work. These partners have a role in approving training courses, hearing fitness to practise cases and assessing continuing professional development. They will ensure that decisions made about social workers are informed by an understanding of the complexities and challenges facing the profession.

18:15

The noble Lord, Lord Hunt, and particularly the noble Baroness, Lady Meacher, flagged up the issue of students. We are mindful that there should be no gap in the assurance of the standards of social work students and intend to provide for the transfer of the voluntary register of social work students to the Health and Care Professions Council pending a full consideration of the best approach to assuring the safety and standards of student social workers. We are acutely aware of that concern. The council has committed to undertaking a review of the risk in relation to students and if, indeed, as the noble Baroness, Lady Meacher, indicates, there is a significant risk, that is something that the Health Professions Council will take on board. It is looking at the risk to students of all professions that it regulates, including those of social work students.

The outcome of this process will set out the risks and issues relating to social work students. The Health Professions Council has assured us that it will seek to ensure that the outcome of its review is informed by social work expertise and evidence. If the noble Baroness wishes to send in information, I am sure that the HPC will be pleased to receive it. The Health Professions Council is currently consulting on this issue and we expect it to report on the results of this by spring 2012.

The noble Baroness, Lady Meacher, asked about the situation in relation to Scotland, Wales and Northern Ireland. She is absolutely right: the regulation of social workers is devolved, so each country can develop a system that best fits its delivery of social care. Therefore, there may well be divergences in the systems adopted. However, she is absolutely right that it is important that that divergence should not prevent, for example, the free movement of social workers or the necessary sharing of information between regulatory bodies. The Health Professions Council is working with the care councils of Scotland, Wales and Northern Ireland to establish a memorandum of understanding. That memorandum is expected to address such issues as cross-border fitness to practise, the recognition of programmes of education and training, information sharing and consistency on standards and their development. To support the Health Professions Council to develop those systems, the Bill imposes a duty on the council to co-operate with the care councils. I hope the noble Baroness will find that reassuring.

Following up on one or two other points on students, the General Social Care Council of course enforces its register of student social workers through the criteria of eligibility for an education support grant, which funds the practice placements of student social workers. The Health and Care Professions Council will not have that particular lever, but it will have other means, such as the council’s approval of pre-registration courses, through which the Health and Care Professions Council will be able to encourage student registration if, following consideration, voluntary registration is considered the most appropriate way.

[Baroness Meacher]

I wonder whether the Minister would consider that there should be a compulsory requirement. If the HPC is registering these courses, could it not be made compulsory that the course must register the students?

[Baroness Northover]

As I just said, the HPC is currently consulting. I strongly suggest that the noble Baroness feeds into the consultation her recommendations and the evidence on which they are based so that they can be properly considered.

The question was raised of how social workers might be linked to the wider reform programme. The Health Professions Council is represented on the reform board and will be able to contribute its expertise to the ongoing reform of social work. Moira Gibb, chair of the reform board, is also a member of the Social Work Regulation Oversight Group. Her professional expertise and knowledge is contributing to the transfer process. Many organisations on the HPC’s professional liaison group, which has developed draft standards of proficiency for social workers in England, are also on the Social Work Reform Board, which has ensured that the development of standards has been informed by wider developments in social work in England.

I hope that noble Lords will see that a lot of attention is being focused on trying to ensure that the change will operate as effectively as possible and will be in the interests of those with whom social workers work. It is exceptionally important that we protect the vulnerable people whom social workers look after, and we are acutely aware of that. On the basis of what I have said, I hope that noble Lords will not press the amendments in this group.

[Lord Hunt of Kings Heath]

My Lords, I am very grateful for the noble Baroness’s response. Of course I agree with her last point that the end result will be the impact on people to whom social workers provide a service. However, she did not respond to her noble friend Lord Newton, who asked whether creating this new body would not repeat some of the issues that were faced by the CQC. I am left with puzzlement. I have not heard one point in favour of this happening. It is beyond me to understand why it is being done. No argument with any thought behind it has been put to suggest that this will improve the regulation of social workers.

On the question of costs, whatever the original estimate, the General Social Care Council produced new work. The noble Baroness shakes her head. Is she saying that the General Social Care Council is misleading Parliament on the issue? It stated clearly that it can produce a regulatory system that will cost the Health Professions Council very little.

Thirdly, on the question of student registration, the problem is that I know what the outcome will be of the work that the HPC will do. It will continue with the system that it applies to the health professions. It is clear that the HPC, although it is a good body, is completely inflexible and will not change its approach because a new profession has been added to it. There is no trust out there—I have fallen into the trap set by the noble Lord, Lord Mawhinney. I am talking about the professions. There is no trust because the record of the HPC is simply to embrace profession after profession, which all have to be moulded into the system that the HPC has set. While that will work for health professions, my concern is that social work is a completely different profession. This point was put by the noble Lord, Lord Walton.

I understand why my noble friend Lady Pitkeathley is concerned about an amendment that stresses the importance of having social workers on the council of the HPC. However, because of the very new nature of the body, when one brings in a completely new profession some protection needs to be given. There needs to be some assurance that the HPC will have people at a very senior level who understand social work. I still do not know why a new council is not being appointed. If good faith was being shown by the Government to the social work profession, the current council would have been stood down and a new council appointed. That is why I tabled my amendment.

Finally, I turn to the name. The noble Baroness said that we cannot put “social work” in the name of the organisation because none of the other professions covered by the HPC is in the current HPC name. If that is the case, why does Clause 210 refer to the Health and Social Work Professions Order? The Government have no problem whatever recognising “social work” in an order before Parliament. Surely it is not up to the HPC to depart from that view. Clause 219 refers to the Professional Standards Authority for Health and Social Care. Therefore, if the noble Baroness does not like “social worker” in the title of the organisation, why would she not accept “health and social care professions”? Why is there an attempt to completely remove the concept of social work and social care from the title?

Unfortunately, an existing health body is simply taking over the social work profession without any genuflection whatever to the need to embrace social workers in the new organisation, whether in governance, remit or title. It is very disappointing that the Government are not prepared to reconsider the matter.

Clause 206 agreed.

Clauses 207 to 210 agreed.

Clause 211 : The Health and Care Professions Council

Amendment 338A not moved.

Clause 211 agreed.

Amendments 338B to 338D not moved.

Amendment 338E had been withdrawn from the Marshalled List.

Clause 212 : Function of the Council in relation to social work in England

Amendment 338F not moved.

Clause 212 agreed.

Clauses 213 to 217 agreed.

Amendments 339 to 339ZB not moved.

Clauses 218 to 224 agreed.

18:30

Clause 225 : Establishment of voluntary registers

Amendment 339A

Moved by

[Baroness Masham of Ilton]

339A: Clause 225, page 224, line 46, leave out “voluntary”

[Baroness Masham of Ilton]

My Lords, we now have another bite at a very important cherry. My amendments in this group seek to provide for a mandatory register for healthcare assistants and assistant practitioners by doing away with “voluntary”. The Government are setting out a framework to establish a voluntary register for all unregulated health professionals. In doing so, they are making a mistake and missing an opportunity. Healthcare assistants and assistant practitioners are carrying out more and more of what are seen as nursing procedures. It is not always possible to supervise them on a busy ward or in somebody’s own home. Surely there should be a mandatory register accompanied by a programme of basic standardised training.

This proposal is supported by the Royal College of Nursing and the House of Commons Health Select Committee. The Select Committee’s report expresses concern about the Government’s proposals for a system of voluntary registration:

“The Committee endorses mandatory statutory regulation of healthcare assistants and support workers and we believe that this is the only approach which maximises public protection. The Committee notes that the Government intends to give powers to the relevant regulators to establish voluntary registers for non-regulated professionals and workers, but would urge it to see healthcare assistants, support workers and assistant practitioners as exceptions to this approach who should be subject to mandatory statutory regulation”.

A voluntary register is likely to be too weak and in any event it will be avoided by the very people about whom there is most concern. The recent horrifying scandal at Winterbourne View in Bristol underlines the issues around the registration of healthcare assistants. This view is supported by the Health Select Committee. The main benefit of ensuring that every care worker and healthcare assistant is regulated by a regulatory body is that the code of practice associated with their registration must be followed or they could be subject to disciplinary procedures.

It should also be noted that the rate at which people register with a voluntary system is open to question. A similar situation arose in the UK when seat-belt wearing was voluntary. It was only when wearing seat belts became compulsory in 1983 that the rate went from around 30 per cent to its current 95 per cent. It is highly likely that the same would happen here.

If the existing regulators are too hard-pressed to take this on, I am sure that there are other willing providers who would do this job. My interest in this is the safety and well-being of patients and the morale of those who give the service that should be given with tender loving care.

I cannot accept the Minister’s statement that we have not got the evidence. What about all the recent reports from the Audit Commission, the Patients Association and the CQC, the “Panorama” programme on the appalling situation at Winterbourne View care home, the review of Mid Staffordshire NHS Foundation Trust, the deaths and poisoning with insulin at Stepping Hill Hospital and many other serious incidents in hospitals and the community? I beg to move.

[Lord Ramsbotham]

My Lords, I wish to speak to my two amendments to Clause 225. I must admit that they are probing amendments that ask a question. I am confused by the situation that appears to be being proposed, and I am speaking in the context of two particular groups of people: Armed Forces veterans and prisoners.

As is well known, there is a huge pool of psychiatric morbidity in prisons, which I mentioned this morning. It is also known that a considerable number of veterans suffer from a variety of mental health problems—anxiety, depression and alcoholism—but added to them is the extra spectre of post-traumatic stress disorder. Psychotherapists and counsellors are employed particularly to help with PTSD, anxiety and depression. Unfortunately, as far as veterans are concerned, they are currently denied the choice that is available to citizens in the United Kingdom because Combat Stress, which tends to be the blanket organisation for their treatment, follows rigidly the NICE guidelines in recognising only CBT and EMDR. The care and treatment that Combat Stress provides does not meet all the cases of soldiers, veterans of other services and prisoners, and other organisations, such as the Human Givens Institute, have been having enormous success with them. Those organisations currently function under the auspices of the UKCP and the BACP, which operate voluntary registers—indeed, many organisations working in this area are registered with both.

As I understand Clause 225, the HPC, established by the previous Government, will no longer exist and instead we will have two new organisations: the Professional Standards Authority and the Health and Care Professions Council. Between them, they are going to be responsible for establishing the statutory regulation, the accreditation and, we are led to believe, the voluntary registers. This is where my question comes in. The trouble with that is that it could cause confusion because you cannot have two organisations running parallel voluntary organisations if you are going to give clarity to the people who need their services. I understand that a consultation is taking place, that the outcome is due in April or May next year and that other organisations, such as the Human Givens Institute, have been invited to attend this consultation, which they are very glad of because they have at last been able to put their case on the table.

The case is very interesting because those organisations are able to prove the success of what they have done by measured outcomes, whereas organisations that follow the NICE guidelines cannot prove anything by outcomes as they have not got them. All they can say is that they have conformed to the guidelines. One of the problems in this area is that the guidelines, which I understand were originally meant to be guidelines, are being taken as tablets of stone. That is thoroughly unfortunate in this area, particularly when we are facing the need for the Department of Health to conform to the demands, for example, of the Armed Forces covenant, which will certify that all the things needed by veterans will be available—housing, of course, but also in the health area.

It is very important that this issue is resolved and that there is clarity. People should know who is responsible for setting up which register and who is responsible for accrediting whom, so that there can be no doubt in the minds of the users. Therefore, I should be enormously grateful if the Minister could clarify that. If necessary, perhaps we could meet before Report for clarification on this matter because the organisations concerned are in doubt.

[Lord Walton of Detchant]

My Lords, I shall be brief but, as always, my noble friend Lady Masham was very persuasive. I have always felt, as indeed she does, that there is a powerful case to be made for the statutory regulation of healthcare assistants not only in hospitals but in homes, particularly old people’s homes. As we heard during the debate on the amendment tabled by my noble friend Lady Emerton, the Government are entirely persuaded that at present the regulation of such individuals could not be done by statute. I must say that I feel uncomfortable about that.

Is there any means by which the Government can suggest a mechanism whereby, perhaps in consultation with the Care Quality Commission, the terms of voluntary registration of healthcare assistants could be based on a set of agreed principles which were accepted generally by all the professions concerned? As it exists at the moment, voluntary registration is not adequate or strong enough and needs to be strengthened. Therefore, while I support in principle the ideas put forward by my noble friend Lady Masham, I think that for the present we will have to be satisfied with voluntary registration, which should be strengthened by whatever mechanism can be introduced.

[Baroness Barker]

My Lords, I have a great deal of sympathy with what the noble Lord, Lord Walton, has said. If noble Lords look at A Vision for Adult Social Care, a document published by the Government last year, they will see that the principles underpinning health and social care have been set out perhaps more clearly than they have been for some considerable time. I do not think the problem is that the principles are not there or are not known; it is that the training that brings those principles to life for a practitioner is not there.

I am torn on this issue. I listened to the noble Baroness, Lady Pitkeathley, and I was persuaded by what she said. I know of organisations which use staff who are not registered but who are exceptionally well trained and have very high standards. If the Government are reluctant—I am sure that my noble friend will again say that they are—to go down the path of full registration, I would understand that position if my noble friend would give a commitment to the development of training. That would go a long way to meeting the point to which I think all noble Lords are trying to get; namely, that the training of people involved in the direct care of those who, usually, have long-term conditions is of a high-enough quality. That is the most helpful thing that my noble friend might be able to say.

[Baroness Pitkeathley]

My Lords, in response to the two noble Lords from the Cross Benches who have spoken, the thinking of CHRE, which is to become the Professional Standards Authority, on the accreditation of voluntary registers is quite well developed. We would be very happy to participate in any meeting of the kind suggested.

18:45

[Lord Hunt of Kings Heath]

My Lords, that is a very helpful offer from my noble friend. I welcome the debate and I am grateful to the noble Baroness, Lady Masham, for moving the amendment. It seems to me that there are two issues. First, we have already had a debate about whether certain professions, particularly healthcare assistants, should be statutorily regulated. No doubt, the noble Baroness, Lady Emerton, will bring that back on Report. Secondly, notwithstanding whether one might agree or disagree about which profession should be statutorily regulated, is there some benefit in a voluntary register alongside statutory regulation or is there a halfway house, as the noble Lord, Lord Walton, has suggested, of strengthening what voluntary registration means? I have not sought to amend on the principle of voluntary registration. However, if it is accepted that there is benefit in having a voluntary register—the noble Baroness gave some powerful reasons in relation to healthcare assistants in our debate before the Statement—and if it is taken further and statutory bodies such as the NHS say, “We won’t employ you unless you are on a voluntary register”, there is then the problem that people could move on to other places and work in other care settings. Such people might have been sacked or removed by a trust. There is no guarantee of safeguards for the public. I have a sense that, once you have gone down the pathway of acknowledging that there is benefit in voluntary regulation, you are acknowledging that there should be statutory regulation.

I was very interested in what the noble Lord, Lord Ramsbotham, had to say and he will know that I have a particular interest in prison healthcare. I think that the involvement of the National Health Service in prison healthcare has led to a great improvement but more needs to be done. The points that he raised are very important.

I have put my name to Amendment 339BZA, which is in the name of the noble Lord, Lord Low, who, unfortunately, is unable to be here today. Perhaps I may briefly say that he has some strong arguments in relation to rehabilitation officers for the blind. He has pointed out that such officers work within the same legal framework as occupational therapists and social workers. They case-manage clients, devise and manage packages of care, oversee the work of lower skilled workers and manage risk-intensive situations with already vulnerable people. In Wales, statutory regulation for rehabilitation officers is due to be finalised at the end of this year. The noble Lord, Lord Low, would like some recognition that at least voluntary registration could be considered for this profession under the terms of the Bill. On that basis, I hope that the noble Baroness may be able to give some positive response to the noble Lord’s amendment.

[Baroness Northover]

My Lords, I thank noble Lords for these amendments, which raise important issues about the ways in which we assure the quality and safety of our health and social care workforce. It is another bite of a very important cherry, as the noble Baroness, Lady Masham, put it, which is a wonderfully graphic image. We had a full discussion of this issue earlier. Perhaps I may emphasise again that the Government are committed to embedding quality of care and patient safety at the heart of health and social care provision. These are the key drivers of our policy on workforce assurance.

I fully agree with the noble Baroness, Lady Masham, that we need to drive up quality, which has run through a lot of our debates today. In considering how we achieve this, we need to ensure that any system is proportionate and effective and properly balances the need for local responsibility for providing high-quality, safe services, and the need for consistent and rigorous national standards. I assure noble Lords that we are not ruling out compulsory statutory regulation for any groups of workers. Compulsory statutory regulation will be considered where there is a clear body of evidence that the risks presented by specific groups cannot be mitigated by assured voluntary registration alongside other existing systems of assurance of standards, such as supervision of workers by qualified professionals, enforcement of standards by employers, registration with the Care Quality Commission, and the vetting and barring system.

However, compulsory statutory regulation, as we discussed earlier although we did not all agree, is not a panacea. It is no substitute for good leadership at every level and proper and visible management of health and social care services. The best protection for the public is, of course, well run services focused on the individual and delivered by qualified staff and appropriately trained and supervised care workers. Employers, commissioners and managers must take responsibility for ensuring this and we need to make sure that local service providers and commissioners are held to account for managing problems effectively and promptly.

The Care Quality Commission sets standards of care for all providers of regulated activities and takes action when they are not met. These standards include a requirement that providers use suitable numbers of appropriately trained and qualified workers. In the rare cases where health and social care workers present a risk of harm to service users, the vetting and barring system can be used to ban individuals from working with vulnerable adults and children. In this context, our view is that the standards of unregulated groups of health and social care workers can generally be assured without imposing compulsory statutory regulation. However, we recognise that we need to ensure that commissioners, employers, supervisors and individual users of services have the knowledge needed appropriately to employ, delegate to and supervise health and social care workers. The Government believe, as noble Lords have clearly picked up, that assured voluntary registration enables this to be achieved.

The amendment tabled by the noble Lord, Lord Low, and spoken to by the noble Lord, Lord Hunt, seeks to enable regulatory bodies to establish and maintain voluntary registers of unregulated rehabilitation officers for the blind in England. The assured voluntary registration of this important group of workers would enable standards to be set for entry to and practice of the profession. I hope that I can reassure the noble Lord, Lord Low, through the noble Lord, Lord Hunt, that the amendment is unnecessary as we are confident that the provisions which enable voluntary registers as social care workers in England to be established by the Health and Care Professions Council and accredited by the Professional Standards Authority for Health and Social Care are already wide enough to include such officers.

The noble Lord, Lord Ramsbotham, flagged up key areas with his particular concern about prisoners’ mental health and the mental health of those coming out of the Army. The Health and Care Professions Council will be given the power to set up voluntary registers of workers. Perhaps I may clarify for him the possible confusion over the roles of the various bodies. The council can set up voluntary registers of workers. The Professional Standards Authority for Health and Social Care will not hold registers, but will have the function of accrediting them to ensure that they are robust. However, I am happy to write with further details to clarify the situation for the noble Lord so as to ensure that he is quite happy with the way that things will be organised.

In referring back to our earlier debate, perhaps I may assure my noble friend Lady Barker, who is absolutely right in terms of training, that we place great importance on improving the training of health and social care workers, and especially on further integrating it, something flagged up not only by my noble friend, but also earlier by the noble Baroness, Lady Emerton, and others.

I hope that I have been able to reassure noble Lords of our commitment to assuring the quality and safety of health and social care workers and the contribution assured voluntary registration can make to the existing systems of assurance of the standards of health and social care workers. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.

[Baroness Masham of Ilton]

My Lords, I thank all the supporters of the amendment. In an ideal situation, what the Minister has said might work, but it is not an ideal world. The important point is that of picking up those people who will not come forward for voluntary registration. What does one do with them? Some agencies might not take people on who have not voluntarily registered, but others take on anyone without even taking up references. There must be safeguards, as the noble Lord, Lord Hunt, has said. We live for the Report stage. With that, I beg leave to withdraw the amendment.

Amendment 339A withdrawn.

Amendments 339B to 340A not moved.

Clause 225 agreed.

Clause 226 : Accreditation of voluntary registers

Amendments 340B to 340G not moved.

Amendments 340GA to 340GC had been withdrawn from the Marshalled List.

Amendments 340H to 340V not moved.

Clause 226 agreed.

Clauses 227 and 228 agreed.

Schedule 16 agreed.

Clause 229 agreed.

Schedule 17 : The National Institute for Health and Care Excellence

Amendment 340W

Moved by

[Lord Hunt of Kings Heath]

340W: Schedule 17, page 413, line 15, leave out sub-paragraph (2) and insert—
“( ) The Chair will be appointed by the Secretary of State with the consent of the Health Select Committee of the House of Commons.”

[Lord Hunt of Kings Heath]

My Lords, this amendment brings us to NICE. I start by paying tribute to its work, and I should say that I much appreciated the commendation for the institute made by the noble Earl, Lord Howe, in the Oral Question last week. NICE was established because of the slowness of the NHS to take up proven new treatments and drugs, and although there was concern at the time of its establishment, I do not think there is any doubt that it has done a good job and that it has achieved global recognition for aspects of its work. It is important to build on this in the future and not to put any qualifications or impediments in its way or undermine its independence. That is why Amendment 340W would provide that the consent of the Health Select Committee ought to be required for the appointment of the chairman of NICE. This is a very important appointment, and I would have thought that parliamentary scrutiny will enhance confidence in the independence of NICE’s role.

Amendment 340X would remove the current provision in Schedule 17 to give the Secretary of State a veto over the appointment of the chief executive of NICE. Given the Secretary of State’s desire to take a hands-off approach and given also the enhancement in the status of NICE, I remain somewhat puzzled as to why the Secretary of State wishes to maintain a veto power over the appointment of the chief executive, and I wonder if the noble Earl would consider removing it. Surely it would be appropriate to leave it to the good sense of the chairman and members of the board to appoint the chief executive.

Amendment 344ZA ties in with Amendment 344, to which my noble friend will speak in a moment. It is important that NICE should continue to assess the cost-effectiveness to the health service of new pharmaceutical products, and certainly until this matter is incorporated into a system of quality standards as provided for in Clause 231. I assume that this is also tied to proposals on value-based pricing which we debated a little at Second Reading. Essentially, however, I would like some assurance from the noble Earl that in the current circumstances, appraisals by NICE will be subject to directions so far as implementations are concerned and that clinical commissioning groups will be required to implement such guidance. The point here is this. The other reason NICE was established was to try to remove postcode prescribing as far as possible, so it is important to ensure that this continues under the Government’s new proposals. I beg to move.

18:59

[Lord Warner]

My Lords, Amendment 344 in this group, in my name and that of the noble Lord, Lord Patel, and the noble Baroness, Lady Thornton, has been prompted by the Government’s apparent wish to remove NICE from technology appraisals of new drugs to assess their cost-effectiveness.

I join my noble friend Lord Hunt in paying tribute to the work that NICE has done. These technology appraisals were the original purpose of NICE when it was set up, against the wishes of the pharmaceutical industry. It has done sterling work in this area which has provided it with an international reputation. One of the strange ironies of this is that the pharmaceutical industry has come almost to love NICE, because the commercial value and standing given to some of its new products when companies receive a positive appraisal by NICE has been considerable. When I went to America to make my peace with some in the pharmaceutical industry after cutting their prices, and after they sometimes broke down in tears over the drop in their profits, they would say that if the mean NHS was willing to pay for those drugs, they must be good things in themselves.

Value-based pricing still looks to be some way off and it seems premature to many to remove NICE from the sphere of technology appraisals—here, I should declare my interest, because I have been a Minister with responsibilities for NICE. I want to press the Minister to tell us more about the arguments for removing NICE from this work, particularly given the financial challenges faced by the NHS, and whether the Government will think again about technology appraisals and NICE’s responsibilities there. That is the purpose of the amendment; I look forward to hearing the Government’s views.

[Lord Owen]

My Lords, I wish to extol the merits of NICE after watching it from the other side, which is the pharmaceutical industry. It is certainly true that the United States pharmaceutical industry was appalled initially by the appointment of NICE and there are still a lot of people who dislike it intensely. Nevertheless, it has established a scientific credibility which is rare in regulatory activities and which it would be absurd to forgo.

I am worried about a lot of the language used about NICE in this legislation. I know that “direct” will be discussed in another context, but there is an overall intent effectively to bring the body into the Government and make it answerable to them. The important quality of NICE, which was established particularly when it first arose, is its measure of independence. If that measure of independence is lost, NICE’s authority and credibility will go with it. I see a lot of merit in ensuring that the appointment of the chair carries not just the imprimatur of the Secretary of State but the imprimatur of Parliament. The Select Committee on Health, which has shown itself over many years to take an informed and knowledgeable view of the National Health Service, is a credible check on NICE becoming not just another annexe to the Department of Health.

I am also concerned about the additional responsibilities being given to NICE. NICE’s quality came from the fact that it was highly focused. That focus was on the pharmaceutical industry but it was also on science and scientific appraisal. It is a great help to the department to have this authoritative, independent view. We all know how easy it is for so-called wonder drugs to get sponsored by newspapers, individuals or trends. What NICE did was to give an authoritative viewpoint, as far as possible objectively, and to take its time sometimes when there was great pressure for an early pronouncement. It was able to withstand that pressure and say, “Until we get more evidence, we will not be able to form a judgment”. We all know that it is very difficult for the department, for Ministers and for people who are in the front line to have that measure of detachment, but scientific evaluation requires it, as well authority that has been built up over a substantial period.

I hope that the Government will not only listen to the proposers of the amendments but take this issue away and ask themselves whether they are not scoring an own-goal. NICE is an organisation that has worked; not many of our organisations in this field work quite so successfully and build such a substantial reputation within the profession which was sceptical about it. I agree with the noble Lord, Lord Warner, that even the pharmaceutical industry has come to see its value. A lot of other countries are looking at NICE and want something similar to be established. A lot of the language in this part of the Bill goes against that trend. I will listen carefully to the Minister’s reply, but I hope that the Government will have a fresh look at this matter.

[Lord Patel]

My Lords, I have added my name to Amendment 344 tabled by the noble Lord, Lord Warner. NICE should continue to do technology assessments or appraisals. It is not surprising that I should support the amendment, because I was closer to the establishment of NICE than most people may know, although I said so at Second Reading. It was a paper written when I was chairman of the Academy of Medical Royal Colleges, to establish a national institute of clinical effectiveness, which led to the establishment of NICE as an institute of clinical excellence. At the same time as Mike Rawlins, a good friend for many years, started with NICE, I was involved in a similar exercise with SMC, its sister organisation in Scotland.

The key thing about both organisations is that, despite their appraisals of drugs, neither of them has been taken to court about their advice. That says something about the scientific veracity with which examinations are carried out. Although I have views that are sometimes slightly different from NICE—for example, I think that we will have to adjust in due course the QALY from £30,000 a year because we will find with drugs that are more expensive and effective that that price is too low—I go further and say not only that NICE should not be stopped from doing these appraisals but that its remit should be extended to biochemical tests, which should not be used in the NHS unless they are proven to be useful. As genomic medicine advances, more molecular and genetic tests will come on the market. It is already happening in the United States. Tests are used which are not found to be scientifically appropriate and marketed at a ridiculous price. I give the example of a test that is used to predict whether a person with a myocardial infarction will develop chronic heart failure. We use a much simpler test. They charge £8,000 for a test which must be done twice a year; we use a stethoscope to listen to the chest to see whether there are any bubbles in it. If there are not, the person is not in cardiac failure. It is as easy as that and every medical student is taught it. It will become even more important that an organisation that is as respected as NICE is given the task of assessing biochemical, molecular and genetic tests before they are implemented in the NHS, otherwise their cost will be enormous. Every marketing company will come along and say, “This test should be used”, as is happening in the United States. I would therefore extend NICE’s technology appraisal remit beyond drugs. It offers proven, scientifically driven assessments and I cannot see why we should stop them. Besides, we would see one part of the United Kingdom continuing while another part did not. I know that if NICE says a drug produced by a British pharma, particularly a big pharma, is not effective based on QUAL, it might be difficult for that pharma to market the same drug internationally, but that is an issue that needs to be tackled separately. Value-based pricing of drugs may be an area that we need to look at again, but not the appraisals.

[Earl Howe]

My Lords, I know that NICE is held in very high regard by noble Lords in the Committee. The Government share that view. That is why we are putting NICE on a firmer statutory footing in the Bill, extending its role to cover social care as well as healthcare and public health, and putting NICE quality standards at the heart of quality improvement. NICE will continue to play a key role in helping to ensure that decision-making in the NHS is robust and evidence-based.

The noble Lord, Lord Owen, said that the Bill gave the impression that NICE would turn into a kind of annex of the Department of Health. I can assure him that that is not the intention of the Government. A special health authority, as NICE technically is at the moment, is much closer in technical terms to the Department of Health than the non-departmental public body that we will set up. He also said that he felt that the additional responsibilities we were placing on NICE were inappropriate. When I have spoken to Sir Michael Rawlins, the chair of NICE, he does not take that view. He regards what we are doing as a vote of confidence in NICE, which is what it is intended to be.

There has been some confusion throughout the passage of the Bill about the detail of NICE’s future role. This may underlie some of the discussion we have had in the debate around the incorporation of NICE’s technology appraisals into quality standards. First, I can confirm that NICE will continue to appraise new drugs and technologies at least until we implement our plans for value-based pricing from 2014. The Bill enables us to provide for NICE to continue this important work when it is re-established.

As we develop our plans for value-based pricing of new branded medicines, NICE’s role in appraising drugs will inevitably evolve. However, we have been clear that we expect NICE to have a central role in the value-based pricing system, including in undertaking an assessment of the costs and benefits of different medicines. That is highly analogous to its current role. I very much agree with the noble Lord, Lord Owen, that we do not wish to lose—and certainly not downplay—the skills and scientific and analytical expertise that NICE undoubtedly has. We will make announcements on the precise shape of the value-based pricing model in due course but suffice to say for now that we believe that NICE is very well placed to fulfil the role of performing the pharmacoeconomic evaluation that will underpin the value-based pricing assessment.

Alongside that, NICE may also need to continue to undertake some technology appraisal activity after 2014—for example, to review existing recommendations in the light of new evidence or to assess important new non-drug technologies. It is quite wrong to suggest that we will cease that activity within NICE.

I also take the opportunity to reassure noble Lords that we will use powers in the Bill to replicate the effect of the funding direction which ensures that the NHS in England continues to fund drugs that have been recommended by NICE’s technology appraisal guidance. However, it would not be appropriate to place in the Bill such a requirement on clinical commissioning groups—as Amendment 344ZA would seek to do. That would leave no flexibility to alter the requirement in the event that there were clear practical barriers to implementation within three months of the final guidance. Amendments to the existing funding direction have only been made on a small number of occasions but it is important to retain that flexibility and secondary legislation supports this better than putting a requirement in the Bill.

19:15

In our response to the Future Forum report, we also confirmed our intention to maintain the effect of the funding direction in the new value-based pricing arrangements from 2014 to ensure that the NHS in England consistently funds medicines with a value-based price. This means that NHS patients can be reassured that they will continue to have a right to clinically appropriate, cost-effective drugs and treatments as set out in the NHS constitution and handbook. Quality standards bring clarity to quality and are a resource that supports clinicians and commissioners in driving quality improvement locally. They serve a different purpose from the technology appraisal guidance that NICE provides on drugs and treatments.

There has also been some debate around the promotion of innovation by NICE. It has been a recurring theme in the Committee. A few days ago we published Innovation, Health and Wealth, which recognises the key role that NICE guidance should play in supporting the adoption and diffusion of innovation and sets out a range of measures to support and improve implementation of NICE’s guidance, such as the establishment of a NICE implementation collaborative.

There has also been discussion about whether it is appropriate for NICE to have a training function. I can reassure noble Lords that there is a clear need for this provision. I am looking here at Clause 236. Among its important functions, we intend that NICE will undertake work historically delivered by the National Prescribing Centre, which provides support for high-quality, cost-effective prescribing and medicines management across the NHS through the development of a range of tools and services. NICE, in its current statutory form, absorbed the NPC in April of this year. The Department of Health has previously commissioned from the National Prescribing Centre specific support and tools to support policy delivery, including training. The department or the NHS Commissioning Board may in future direct NICE to provide similar services.

There have also been suggestions that we amend some of the provisions relating to the chair and non-executive directors in Schedule 17. I can understand why the noble Lord, Lord Hunt, suggested that the Health Select Committee should approve the appointment of the chair of NICE but this provision has not been made for the other bodies being established in the Bill and I do not believe it is necessary for NICE. Under the Bill, the Secretary of State will be responsible for appointing the chair of NICE, as is the case for NICE in its current statutory form. To require Health Select Committee authorisation would be to add a further layer to the appointments process for the NICE chair to little obvious benefit.

I can also appreciate why noble Lords have asked me to clarify Schedule 17(3). It may at first glance appear to contain an unusual level of detail for primary legislation but I should point out that this provision is here for a serious purpose: to ensure that in the very serious but, we hope, unlikely eventuality that a non-executive officer of NICE is suspended there can be no argument about whether they have been properly informed of that decision. This provision is consistent across the arm’s-length bodies being established in the Bill.

Finally, I briefly speak to the amendments that I will seek to move. They are all minor and seek to: clarify some of the wording around NICE’s additional functions; ensure that public consultation for quality standards produced now will be recognised as effective consultation following NICE’s re-establishment; and remove an amendment to Welsh legislation in the consequential provisions that is considered unnecessary. I hope that the noble Lord will feel reassured by my explanations of these issues and that he will withdraw his amendments.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the noble Earl. At heart, there are two key issues here. One is the independence of NICE—I am grateful for what the noble Earl said on that. I certainly support the change in status. The reason there is some anxiety about independence is that in two parts of the Bill the NHS Commissioning Board has powers of direction over NICE. We will come on to this in relation to Clause 231 on quality standards—it applies also to Clause 236 but this is where some of the concern comes from. I am very dubious about whether quangos, to put it kindly, should have power over NICE. That is where the concern comes from and why scrutiny by the Health Select Committee of the chair would be important.

The noble Earl has reassured us that the technology appraisals will continue and that, until value-based pricing is introduced, there will be a clear understanding that NHS bodies will implement the technology appraisals. He said that it would not be appropriate for those directions to the health service to be in the Bill, but can he clarify that the current order will be amended so that instead of directions to health authorities, primary care trusts and NHS trusts in England, clinical commissioning groups will appear in the title of the order? It is quite clear that although this will be done by secondary legislation, clinical commissioning groups will be required. I take his point about the need for discretion when it comes to primary legislation, but I would like to ask him about that point.

My third point to the noble Earl is about value-based pricing. One of the joys of talking about value-based pricing is that no one understands it, and, frankly, having read all the reports and the original OXERA report, I confess that I am still rather puzzled by it. It sounds good, but I caution the Government that the PPRS has served us reasonably well. It has allowed the Government to cap the profits of the pharmaceutical industry but has given them complete discretion about the price of individual drugs—the advantage being that prices set in the UK have then been influential throughout the rest of Europe. My concern about value-based pricing is that, combined with issues around the regulation of medical health research, it makes the UK a less attractive place for the industry to invest in R&D.

My noble friend Lord Warner toured the boardrooms of New York and New Jersey, and I followed him to sweep up—

[Lord Warner]

The mess.

[Lord Hunt of Kings Heath]

—not the mess, my Lords, but my noble friend’s vigorous discussions—because of the wish to ensure that those global companies continued to invest in the UK. The problem with the Department of Health is that while it sponsors the industry, its real concern, when it comes down to it, will always be the cost of drugs to the National Health Service—hence my concern that powers of direction by the NHS Commissioning Board will not be used in a way that is conducive both to the independence of NICE and to the continued R&D spend on pharmaceuticals in this country. I do not really want to institute a debate on value-based pricing at this point, but I hope that the Government will look very carefully at its introduction and all the consequences from it. Having said that, unless the noble Earl wishes to answer the point on direction, I certainly beg leave to withdraw.

[Earl Howe]

My Lords, I will drop the noble Lord a letter on the funding direction, but it is our intention to place this in secondary legislation, appropriately amended as he indicated. It is possible that this will be incorporated in the standing rules as a fixture. On value-based pricing, I can tell him only that quite detailed work is currently under way on the model and that, while I agree in many ways with his comments on the PPRS, it has two unsatisfactory features. One is that it does not recognise fully the factors that society values; the other is that it does not incentivise research sufficiently to address areas of unmet need. If we can achieve both those things, it will represent an advance, but the noble Lord is right that there is still some way to go before this model is finalised.

[Lord Hunt of Kings Heath]

My Lords, I am grateful and beg leave to withdraw my amendment.

Amendment 340W withdrawn.

Amendment 340X not moved.

Schedule 17 agreed.

Clause 230 : General Duties

Amendment 341 not moved.

Clause 230 agreed.

Clause 231 : Quality Standards

Amendment 342

Moved by

[Lord Warner]

342: Clause 231, page 232, line 11, leave out “may direct NICE to prepare statements of standards” and insert “shall each year agree with NICE a programme of clinical quality standards to be completed or revised”

[Lord Warner]

My Lords, briefly, Amendment 342 is in my name and that of the noble Lord, Lord Patel, who will speak to Amendment 343, which I also support and to which I have added my name.

Amendment 342 was prompted by the rather slow progress that seems to have been made so far on developing clinical quality standards. I accept that these are very important, so there is nothing between me and the Government on the virtue and value of those standards. However, the rate of progress seems to be about five a year, on the information that I have managed to obtain, and at the present rate of progress it looks to be well over a decade before the exercise is completed—and then, I suspect, the whole process will have to start again because standards are likely to be out of date, and science and clinical practice will have changed. This exercise could become rather like painting the Forth Bridge.

I am all in favour of taking care in the preparation of clinical quality standards and of the need for proper consultation to ensure that a spectrum of expertise and discussion is brought to bear on each clinical quality standard. It is important to get clinical support for those standards, but in this area speed is also important if patient care is not to suffer. I wonder therefore whether the processes for preparing these standards do not need some review. It is possible that the resourcing of the work may need to receive some attention. In addition, I believe much work has been done in other jurisdictions—certainly, a lot has been done in the United States—and I wonder whether the Government and NICE could not draw on this work in an effort to speed things up.

To buck things up a bit, Amendment 342 requires the Secretary of State to “agree with NICE” an annual,

“programme of clinical quality standards to be completed or revised”,

in that year. This should ensure that the process and resourcing are kept under review and that faster progress is made. These clinical quality standards are critical to delivering improved quality and efficiency in the NHS at a time of great financial challenge and rapid clinical and scientific advance. We need to press on with their preparation and to ensure that the Secretary of State and NICE give proper priority to this issue. I hope the Minister can agree that an amendment of this kind will help to achieve this. I beg to move.

[Lord Patel]

My Lords, briefly, I support this amendment and Amendment 343, which has been tabled in my name. Although the amendments refer to “clinical quality standards”, I am well aware that the Bill itself refers to them as “quality standards”. It was I and the noble Lord, Lord Warner, who suggested in previous amendments that “clinical” should be introduced, but I recognise of course that these quality standards will concern not only clinical but social care, and there should therefore be a reference to clinical and social care.

I have also made the point before that these standards ought to cover the patient’s journey of care, which goes from diagnosis through primary, secondary and tertiary care and on to social care.

I believe that I know something about clinical quality standards, and while the noble Lord, Lord Warner, referred to standards written in the United States, closer to home there have also been hundreds of standards written over the past eight years. I bet your Lordships now that the methodology that will be used by NICE will be exactly identical, but that is an argument which I will have with the chairman or chief executive of NICE—no doubt over a dinner some time.

What is important about these standards is that they are evidence-based so that it is possible to defend them, just as technological appraisals are evidence based and therefore possible to defend. The evidence that we are looking for is that which will deliver the best outcome for the patient, in terms of safety of treatment, diagnosis, patient experience and outcomes in terms of diseases.

It is also important that they should stand the test of time—that they are written and based on evidence that is tested over time, so that they do not have to change every three months and have people complaining that treatment has moved on. Experience has taught us that it is possible to write those kinds of quality standards, which stand the test of time but, as the noble Lord, Lord Warner, said, they are time consuming to create and therefore they have to be resourced. If you are creating standards for over a patient’s journey of care, it will require several months and expertise to do so. If you intend to have more than five or six standards a year, you require to resource them fully.

Another important issue is that standards have to be tested before they are finalised so that, just as with the technological appraisal of drugs, you do not get complaints from clinicians or anyone else. I can tell noble Lords that doctors are very good at complaining afterwards if they are not consulted. There have to be consultations with both clinicians and the public so that they will feel happier that the standards are evidence-based and will deliver the outcomes that we expect.

A third important aspect is that the standards should be easily understood. I was clear when I did the job that every one of the standards written should get a crystal mark, so that they were written in a language that people could understand. If we are going to evolve and develop information standards, a further value is that each of the quality standards is an opportunity to inform the patient about what they should know about their disease and its treatment. There can be simply written questions that the patients or relatives can use to ask about the problem in question. That gives us an opportunity to use the standards not only to manage the care of the patient but to inform the public and the patients about their disease. That way, you make the public better informed and able to demand the kind of quality care that they should get, so the systems will be operating in a way that delivers care.

My Amendment 343 says that standards should also cover long-term conditions. To me, that deals with the problem of complex long-term diseases, which need to be managed in both the acute sector and the primary or community sector. The standards should therefore be written as a patient journey of care over a longer period of time. Those are the quality standards that we should be embarking on and the numbers that we should provide for.

[Lord Owen]

I thank the Minister for his explanation earlier. I found much of it convincing, particularly his statement that Professor Mike Rawlins thought that this was a vote of confidence in his organisation. I have long had respect for Professor Rawlins—he was an adviser to the SDP many years ago, so I can hardly disavow his advice at this stage. I urge the Minister to consider for one moment that Amendment 342 would go a long way towards reassuring a lot of us. It would take out the word “direct” and put in the concept of agreeing, which would be much more beneficial if he wants to establish the relationship in reality.

[Lord Hunt of Kings Heath]

My Lords, I follow on from the noble Lord, Lord Owen. Clause 231 says:

“The relevant commissioner may direct NICE to prepare statements of standards in relation to the provision of … NHS services”.

In relation to a quality standard regarding the provision of NHS services, the relevant commissioner means the Commissioning Board.

I come back to the point about independence: surely it should be the Secretary of State who should direct NICE to prepare statements of standards in relation to the provision of NHS services. Surely, under this architecture, the concern of the Commissioning Board will be money. It is going to have to ensure that the NHS delivers what the Secretary of State requires in the mandate, which is growing ever longer as we debate the Bill, and that will mean quite a lot of pressure on it. I am worried that because it can direct NICE to prepare statements of standards, it is bound to be governed by finance; in fact, it is bound to relate the number of standards that it directs to the resource issue.

Of course one has to take account of resources, and the very fact that NICE’s technology appraisals are concerned with cost effectiveness is a recognition that we have to make judgments about the use of resources, but I would have thought that there was benefit in there being a distance between that direct concern of the Commissioning Board and the overriding leadership of the service that the Secretary of State must provide.

I wonder if the Minister would be prepared to give this further consideration. In this part of the Bill and in Clause 236, where the board can give directions to NICE, one simply has anxieties that, at least visibly, the independence of NICE might be compromised.

[Earl Howe]

My Lords, NICE’s independence is the foundation of its reputation as an authoritative source of evidence-based advice. To guarantee that independence, to pick up the point made by the noble Lord, Lord Hunt, the Bill contains no direction-giving power to enable NICE to be directed as to the substance of a quality standard, and explicitly prohibits regulations from enabling the Secretary of State or the NHS Commissioning Board to direct NICE on the substance of its advice, guidance or recommendations. I reassure noble Lords that the independence of NICE’s advice is assured by the very mechanism by which it formulates it—through public consultation and collaboration with respected authorities such as medical royal colleges.

I shall explain in a moment how we propose that the NICE quality standards should be commissioned, because there are different arrangements for different types of quality standard. However, the amendments begin to chip away at what we want to see—that is, a clinically led process—by specifying what really does not need to be specified, as the evidence of the quality standards published to date shows. I appreciate that many people have an interest in this programme, and that is why subsection (7) not only requires NICE to establish a process for its quality standards programme but requires a consultation on that process. That gives ample opportunity to patients, clinicians and other interested parties to have a say in how the programme is delivered.

NICE is expected to develop a broad library of between 150 and 175 quality standards, spanning the domains of the NHS outcomes framework and commissioned by the NHS Commissioning Board. The Secretary of State will have responsibility for commissioning quality standards for social care and public health. For integrated pathways of care covering NHS treatment together with public health and/or social care interventions, the Secretary of State and the Commissioning Board will be able to commission quality standards jointly. So, NICE will prepare quality standards when commissioned to do so by the board for NHS healthcare services, by the Secretary of State for the public health service and social care and jointly by the Secretary of State and the board for integrated pathways.

The noble Lord, Lord Warner, expressed his disappointment at the rate of progress of the rollout of NICE quality standards. Actually, there has been a steady start to this: we have some two dozen quality standards at the moment and, as I mentioned, we will have between 150 and 175 of them over a five-year programme. We agree with the noble Lord that it is crucial to maintain momentum with this important work, and NICE has told us that it believes that the programme is realistic. It is unnecessary to undertake to agree a programme of quality standards each year. The current programme that is being overseen by the National Quality Board is ideally placed to deliver that steady steam of quality standards over the agreed timescales.

The noble Lord, Lord Patel, asked how we will ensure that standards will stand the test of time. NICE regularly reviews its products, including guidelines and standards. This is an established part of NICE’s working procedure that has helped it to attain its high standing with patients, clinicians and, indeed, the industry. NICE is keen to take into account any new evidence and to be responsive to changes in circumstances.

As I said earlier, NICE quality standards bring clarity to quality, providing definitive and authoritative statements of high quality care and based, as the noble Lord, Lord Patel, rightly said, on the evidence of what works best. As we move towards a system that will focus on improving the outcomes that matter most to patients, it is vital that quality standards reflect these.

Amendment 343, which places a particular emphasis on long-term conditions, is understandably motivated but it may have the unintended consequence of excluding other conditions. While I sympathise with the sentiment, it is probably undesirable to specify that in the Bill. That is why the National Quality Board is overseeing the development of a process for selecting topics for the rest of the library that will integrate and build on the current process for selecting the NICE clinical guidelines. This process recognises the importance of ensuring that smaller specialties are taken into consideration. I have a long list here of topics in the proposed programme that address long-term conditions. I am happy to let noble Lords have that. This reflects the fact that these quality standards are needed to help the NHS improve outcomes in this area, as we envisaged in the NHS outcomes framework.

NICE recently completed an engagement exercise on the proposed library of quality standards. The responses were overwhelmingly positive about the programme and the role of quality standards in the new system. This feedback is reassuring, and I hope it reassures the noble Lords sufficiently to enable them not to press their amendments.

[Baroness Emerton]

My Lords, could I just interrupt to ask a question about the evidence-based quality standards? Where do we fit in the culture change that is so important when we look at quality standards? It is very difficult to measure a culture. We talk about trying to integrate health and social care in all the standards in primary, secondary and tertiary care. An evidence base is essential for NICE, but we have not mentioned culture at all today in this context. It is absolutely fundamental, particularly with the long-term conditions, to talk about or to include some measurement of culture.

[Earl Howe]

The noble Baroness is quite right and no legislation can provide for that culture change, as she will appreciate. At the same time, we can put in some important building blocks to encourage a change of culture. One is to have maximum clinical input into how the quality standards are framed and formed and, indeed, input from patient representative groups. It is very important to see things from their perspective. We can create duties, as we have in the Bill.

The work that my department has done on accelerating the uptake of innovation is relevant here. The NICE implementation collaborative—the NIC—that was part of our announcement about the growth agenda some days ago is designed to bring together the relevant stakeholder groups to see how the uptake of innovation can be accelerated and how people can be made to look at working practices in rather a different way so that cultures shift. However, it is easy for me to stand here and say that; it is less easy to drive this forward. I would not pretend that the Government are necessarily in the best place to do that, although we are clear that this shift in approach, which largely underlines the QIPP agenda as well, has to take place. However, it will take a little time.

[Lord Warner]

My Lords, the total purpose of my Amendment 342 was to inject some momentum into the process of delivering these quality standards. I am much reassured by what the noble Earl has said. I think my noble friend’s point about directions for the national Commissioning Board is important. It can be misleading. I hope that the revelations of the noble Lord, Lord Owen, about the chairman of NICE’s past associations will do no damage to his reputation. I beg leave to withdraw the amendment.

Amendment 342 withdrawn.

19:45

Amendments 343 and 343A not moved.

Amendment 343B had been withdrawn from the Marshalled List.

Clause 231 agreed.

Clauses 232 and 233 agreed.

Clause 234 : Advice, guidance, information and recommendations

Amendment 344 not moved.

Clause 234 agreed.

Amendment 344ZA not moved.

Clauses 235 to 239 agreed.

Clause 240 : Additional functions

Amendment 344A

Moved by

[Earl Howe]

344A: Clause 240, page 237, line 23, leave out “its functions” and insert “any function it has under or by virtue of any other provision of this Part”

Amendment 344A agreed.

Debate on whether Clause 240 should stand part of the Bill.

[Lord Naseby]

My Lords, the Deputy Speaker called the amendment and it was agreed, but I did not specifically hear that Clause 240 should stand part. If I may, I will intervene briefly on whether the clause should stand part, particularly the additional functions under subsection (1)(a). It states:

“NICE may do any of the following … acquire, produce, manufacture and supply goods”.

I have a query for my noble friend on the Front Bench. We are well aware that in the past some hospitals have manufactured certain generic medicines and marketed them, which has caused the normal market for medicine and pharmaceuticals to be disrupted. Secondly, we are aware, particularly recently, of certain hospitals that have been selling medicines in another market, which has caused disruption to that market and particular difficulties for parts of the country where there has been a shortage of medicines.

I may be wrong but, as I read it, this clause means that NICE will be in a position to manufacture directly, maybe even under a licence. I see that under paragraph (f) NICE will be able to,

“exploit ideas and exploit intellectual property”.

Can we be quite clear? Is my noble friend really saying that NICE, the adjudicator of value for money and all the other dimensions in the Bill to do with pharmaceuticals, medicines et cetera, will manufacture certain medicines on the side? That does not seem to be part of the role of the regulator. It seems, frankly, to be virtually direct labour within the context of NICE. I would be most grateful if my noble friend would respond. If he is not able to respond today, perhaps he will respond on Report or write to me.

[Earl Howe]

My Lords, I hope I can assist my noble friend. Clause 240 enables NICE to undertake additional functions, such as supplying new services and exploiting intellectual property. These functions must be related to the provision of health and social care. They seek to reproduce the income-generation powers that NICE currently enjoys as a special health authority and do not therefore represent an expansion of its powers. NICE may do this for any number or type of organisations, including the private sector and overseas Governments. This clause allows NICE to charge for carrying out these additional functions on an appropriate commercial basis.

In the White Paper Liberating the NHS: Report of the Arm’s-Length Bodies Review, the Government stated that,

“where appropriate, arm’s-length bodies will be expected to exploit commercial opportunities and maximise commercial discipline across the sector”.

NICE may carry out these additional functions provided that they do not have an impact on its ability to carry out its functions. We do not envisage, and nor does NICE, that the performance of any of these functions will interfere with its normal work programme. I hope that that is helpful to my noble friend. It is certainly not the case that NICE will be manufacturing medicines, as I think he feared.

[Lord Hunt of Kings Heath]

Is not the point that NICE enjoys a global reputation for the excellence of its work, as we discussed earlier? I do not know how many hits it has on its website every day but I understand that it is a considerable number. Is this not a huge advantage for the UK and that all the Government are seeking to do is to ensure that NICE can exploit that so that its work in the UK can be developed elsewhere?

[Earl Howe]

The noble Lord is exactly right. He will know from his time as a Minister with responsibility in this area that NICE has steadily grown its reputation overseas, and that with that have come opportunities to sell its services in a number of quarters. We simply want to see that continue.

[Lord Naseby]

I understand that and I understand the point made by the noble Lord, Lord Hunt. Nevertheless, to the best of my knowledge, NICE has never manufactured, and presumably from what my noble friend has said is not going to manufacture, in which case perhaps “manufacture” can be deleted from the Bill when it returns on Report.

[Earl Howe]

I will take advice on why “manufacture” is in the Bill and come back to my noble friend.

Clause 240, as amended, agreed.

Clauses 241 to 245 agreed.

Clause 246 : Consequential and transitional provision

Amendment 344B

Moved by

[Earl Howe]

344B: Clause 246, page 239, line 16, after “Consultation” insert “with any person”

Amendment 344B agreed.

Clause 246, as amended, agreed.

Schedule 18 : Part 8: consequential amendments

Amendment 344C

Moved by

[Earl Howe]

344C: Schedule 18, page 420, leave out lines 22 to 26

Amendment 344C agreed.

Schedule 18, as amended, agreed.

[Baroness Rawlings]

My Lords, I beg to move that the House do now resume. We are most grateful to noble Lords for their brevity. As a result, we have reached our target for today so noble Lords do not need to return after the dinner break this evening for further debate on the Health and Social Care Bill.

House resumed.

EUC Report: Money Laundering

Monday 19th December 2011 Lords Chamber

Question for Short Debate

19:53

Asked By

[Lord Hannay of Chiswick]

To ask Her Majesty’s Government what is their response to the Report of the European Union Committee on Money Laundering: Data Protection for Suspicious Activity Reports (6th Report, HL Paper 82).

[Lord Hannay of Chiswick]

My Lords, dinner hour debates in your Lordships' House are often a welcome interlude between two lengthy sessions devoted to the House’s primary function of rigorously scrutinising and, where necessary, amending the contents of the Government’s legislative programme, an interlude during which we can look at wider horizons and examine issues falling outside the purely legislative framework. I know that that is not the situation tonight but that is by happenstance rather than by design. However, this dinner hour debate is not one of those occasions. It is rather, as I will seek to show in a minute or two, the combination of a long process during which the European Union Select Committee has pressed the Government, eventually with some success, to modify the way in which they implement a particular legislative framework, in this case one based on an EU obligation to clamp down on money laundering. It is therefore in a way an example of that post-legislative scrutiny for which so many calls are made and of which there are few practical examples. It also involves an issue that concerns the balance to be achieved between the unquestionable need to take tough action against a form of criminal activity which has grown exponentially in recent years—namely, money laundering, with the liberalisation of capital movements on a global basis driving it—and the need to respect the protection of the individual against disproportionate action by the state and against the use of information for purposes other than those originally intended. It is therefore very much a piece, albeit a small piece, of that agenda for restoring freedom which the coalition Government have set as one of their principal objectives.

If these introductory remarks may seem a trifle self-congratulatory, I should point out that the whole process was initiated by my predecessor as the chair of the EU Select Committee’s sub-committee on home affairs, the noble Lord, Lord Jopling, and brought to fruition, with rather more delay than we would have wished, only under my own chairmanship. The purpose of this short debate is not simply to ask a question but to receive a detailed answer setting out the changes in the implementation of the rules against money laundering which the Government are now introducing. With that in mind, I look forward with anticipation to the reply of the noble Lord, Lord Henley.

Many of the matters the sub-committee looks at are concerned with the use of personal data in the fight against terrorism and other serious organised crime. The use of personal data is essential for these purposes, and the committee has always said as much. We have been quite clear on that point, but we have also been concerned that personal data should be properly used and not in any circumstances abused. The balance between the interests of national security and data protection is not an easy one to strike. It is something we have considered a number of times, among others in the context of the Schengen Information System and of the proposed EU legislation on passenger name record data, which is currently under consideration in Brussels. Tonight we are considering how that balance is best achieved in the fight against money laundering.

The committee’s involvement arose in the context of our inquiry in 2009 into money laundering and the financing of terrorism. Under the Money Laundering Regulations 2007, which implement the third money laundering directive, banks, other financial institutions, lawyers, accountants, auditors, insurers and many others are required to report to the Serious Organised Crime Agency (SOCA) any transaction or activity which seems to involve funds which are the proceeds of criminal activity. Knowledge is unnecessary. It is a suspicion based regime, and the reports are known as suspicious activity reports, or SARs. As the bankers told us in the evidence we took, “If you smell a rat, you must report it”. We did not then, and I do not now, question the utility of this; it is central to the fight against money laundering. However, we did, and still do, have concerns about the handling of the data. SARs are entered by SOCA onto a database known as ELMER, which is in effect a database of suspects, and, given the number of reports, a very large database indeed. At the time of our 2009 report, there were 1.5 million entries, and the number increases by 200,000 every year. Access to the ELMER database is available, as one might expect, to police forces and others responsible for prosecuting serious crime. However, we discovered that the data were much more widely available; for example, to trading standards authorities, and to Nottinghamshire County Council to investigate housing benefit fraud. This seemed to us to be an unwarranted use of information collected for a quite different purpose.

The committee recommended that the Information Commissioner should review and report on the operation and use of the ELMER database. I pay tribute to the noble Lord, Lord Marlesford, who was then a member of the committee, and who is unfortunately unable to be present tonight, for the persistence with which he pursued this with the Government. Eventually they agreed and the matter was referred to the Information Commissioner. The Information Commissioner conducted a full investigation and prepared a report which he sent to the chairman of the European Union Committee on 29 November 2010—slightly more than a year ago. We published it in January 2011 as an appendix to the report which we are now debating.

The Information Commissioner made four detailed recommendations as to how SOCA might improve the data protection regime of ELMER. Over the past year, we have been monitoring how those recommendations have been implemented. We have had letters from SOCA and from James Brokenshire MP, the Home Office Minister, and in October we held a very useful oral evidence session with the Information Commissioner and the Director of SOCA. Since then, we have received further information from SOCA.

Our first concern was the period for which the data are retained on the database. This used to be 10 years. The Information Commissioner suggested that five years might be more appropriate, but agreed on six years. In his latest letter, the director of SOCA has told us that as of 31 October this year SOCA had deleted some 119,000 records and intended to delete a further 600,000 by the end of this year. This would leave some 1.3 million records on the database—still a very large number. It compares unfavourably with the number on the database at the end of September 2007, which was 932,324. I hope the Minister can tell me when he expects that all records over six years old that are not being used for investigations will have been deleted, how many records he estimates will then remain on the database, and whether the number is likely then still to be increasing every year.

Our other main concern was the range of persons and bodies with access to the database, and the purposes for which the SARs data could be used. I am relieved to hear that all the arrangements for local authorities to have direct access to the database have been terminated. I note that local authorities can still have indirect access to SARs by requesting SOCA to search the database. I should be happier if the Minister could assure the House that local authorities will never have access in any other way, even if they meet the new and more stringent requirements for direct access.

In all the detailed criteria for direct access to suspicious activity reports, I could not find any limitation on the purposes for which the data can be used once they have been accessed. Could they still be used to investigate housing benefit fraud? This is not something that most people would class as serious organised crime. These are still matters about which I and the committee have some reservations, but overall the position has greatly improved over the past year. The hundreds of thousands of people who do not know that their financial transactions are listed on this database have reason to be grateful to the Information Commissioner for his review and his proposals, to SOCA for its implementation of them, although it is still incomplete, and, dare I say it, perhaps even to this committee and to this House for having set the ball rolling. We hope to receive from SOCA over the coming months further details of its implementation of the Information Commissioner’s proposals.

There is one other matter arising out of the committee’s report on money laundering, which has been the subject of correspondence with a number of government departments—the assembling of ransoms for ships and crews seized by Somali pirates. The committee recognises that this activity is not, in the present state of British law, in any way illegal. However, we can see no justification at all for the view that appears to be taken by the Government that those assembling such ransoms do not need to file a suspicious activity report. After all, the money involved is quite certainly set to become the proceeds of crime. The people to whom that money is being paid are certainly criminals and the chances that the money will subsequently be laundered must be very high, even if there is not also at least a risk that it will end up financing terrorist activities. In those circumstances, it seems to me and to my committee odd, to put it mildly, that the Government do not make it clear that an SAR should be filed, particularly since that would in no way constitute an admission of wrongdoing by those assembling the ransoms.

I am afraid that our attempts to address this point through correspondence have been met by evasion and obfuscation. I hope that the Minister can give the House a clearer and more convincing response when he replies to my Question.

20:04

[Lord Dykes]

My Lords, I am sure that the whole House will very much appreciate the sensible comments of the noble Lord, Lord Hannay of Chiswick. It has been some time between the publication of the report in January and this debate. Perhaps there is an important point there about the need for greater speed on a matter of enormous interest to large numbers of people. I commend the report in every way and, on these Benches, we give full support to the main points to which the noble Lord, Lord Hannay, referred and to the other details in the report.

I must declare an interest as a member of the full European Union Committee, which by implication and by asserting itself in the background has given its support to this report. Sub-committees’ reports are always published as reports of the whole committee. I hope that the Minister will respond positively to some of the important points made by the noble Lord, Lord Hannay. I add my support to his comments at the end of his speech about the problem of ship ransoms, which needs to be dealt with.

The need to find a balance in these matters is always difficult, as the noble Lord declared. I agree, and the balance will be a question of continued supervision and surveillance as time goes on, and is not an easy matter. However, we live in a world where not only technology but international capital transactions and flows have improved. As has been said, there has been the removal of national and collective exchange controls of one kind or another—particularly in this country many years ago. There have also been other developments on a rapid scale in the use of the internet and communications systems. People with crime as their intention and activity, rather than just ordinary citizens in different countries, use the same systems and technologies as others to pursue their very evil objectives in the field of terrorism and the organisation of serious crime, which is in many ways a worldwide phenomenon on a gigantic scale. The statistics are very chilling indeed when one begins to examine those matters in depth.

Therefore, that balance and government rules on access to details on any database that is growing exponentially have, as has been said, produced a great deal of anxiety among the highly educated citizens of advanced countries and others in the world who are wondering how this balance will be maintained in the future. It is very difficult.

It is not right for us automatically to begin to criticise the authorities and the Government for how they deal with this because, for them, it is a difficult balance. They must support the agencies of protection for us—the secret services as well as the police authorities, our other security agencies and the military—in how they defend this country by their resistance to the ominous developing activities in serious organised crime and worldwide terrorism. But they must protect the sacred freedom of the individual citizen from the ever-more intrusive snooping that public authorities can easily slide into if they do not have the necessary legislative and administrative controls and fierce determination by Ministers to ensure that that control is exercised practically to help the citizens of this country dealing in innocent transactions which are wrongly put onto a database for reasons that need to be explained.

I was very impressed with some of the suggestions made in the latest report which, as the noble Lord, Lord Hannay, said, followed the original report under the noble Lord, Lord Jopling, from the same Sub-Committee on Home Affairs. In the recommendation for future action on page 19, paragraph 6.1 states:

“The Commissioner makes a number of recommendations to help ensure that the processing of personal data on the ELMER database complies with the requirements of the Data Protection Act and on the legislative approach to the reporting of suspicious financial activity”.

There is a mention below in the subsequent parts of paragraph 6. In paragraph 6.1.5, the sub-committee suggests:

“That the Government considers whether, in the light of experience, the current arrangements for reporting of SARs continue to be justified, whether they are both effective and proportionate and whether they could be improved. Consideration should be given to whether there is a pressing social need to justify the requirement to report any transaction which is based on a very low threshold of suspicion that handling criminal property or money laundering is taking place”.

In relation to the accumulation of names and information on the database at a very rapid rate, the exclusions announced by the Information Commissioner have been very modest. I should have thought that the number could be greater and I look forward to the Minister’s response on how he thinks that process is developing.

In the original July 2009 report on money-laundering and the finance of terrorism, the wider subject, rather than the more narrow one on money-laundering and data protection for suspicious activity, the definitional base of what is money-laundering was set out very clearly. That, too, needs more attention to detail as experience has developed of the phenomenology of money laundering, the detail of how it is done. The knowledge of public authorities about that is not perfect; they need to investigate more and share information with other Governments and collective bodies such as the European Union. We need to consider future EU legislation to strengthen the European basis for the control system without, as I said, denting significantly the precious freedom of the individual citizen, which I hope is dear to everyone in this House.

We strongly support the contents of the report and the suggestions made by the noble Lord, Lord Hannay, tonight, particularly his final remarks on ships’ ransom construction, and hope that they will be met with agreement in all parts of the House, subject to what my noble friend can say to us to guide us on how the Government will deal with those matters with the Information Commissioner.

20:12

[Lord Judd]

My Lords, this is an opportunity for me to share with the House what a joy it is to serve on this committee under the chairmanship of the noble Lord, Lord Hannay. He is a tough chairman, a firm chairman, never short of his own ideas; but it is really stimulating to work with him. For me, this is not a new experience because more than 30 years ago, when I was a Minister of State in the Foreign Office, he was one of the young, immensely able, talented civil servants with whom it was good to be able to work. I am therefore having another exposure to what he brings to public affairs, which is altogether good. I say thank you.

On the report itself, with which the noble Lord has dealt as well as anyone possibly could, I have just two general points to make which struck me during our deliberations. The first is how dealing with this kind of crime and others which we considered has become immensely more challenging and complex because of the impossibility of seeing a clear dividing line between legitimate and illegitimate business. This must be a huge challenge to all those who try to police what goes on in international operations. Therefore, I think that a tribute to those who are involved in that work is timely.

The second thing that strikes me equally is the vast amount of personal information which is now available to those involved in government at a national and local level. It is a matter of not just the amount of information and how it is kept secure for the purposes for which it has been gathered but the very large number of people who are involved in the operation. I am always brought back to the old adage that “confidential” means telling other people one at a time. I find it very difficult to imagine that we can have a really watertight situation in which all this information is preserved simply for the purposes for which it was gathered. That is not to call into question the good faith of the people concerned, but inevitably, with the number of people involved and the number of conversations that take place, then again at times the dividing line between the specialists working for a particular purpose and those with whom they talk must be very difficult to keep clear. There are very big issues here that we all have to watch like hawks if we are to preserve the context of freedom and human dignity, let alone human rights, as we have come to understand them in this country.

The main point that I want to make is that, if I may say so, the noble Lord, Lord Hannay, has put the findings, feelings and discussions of the Select Committee extremely well tonight, and the whole House should be grateful to him for the work on which he leads so well.

20:16

[Lord Rosser]

My Lords, I, too, thank the noble Lord, Lord Hannay of Chiswick, and his committee for this report. It is clear from what he said that there has been some helpful progress over the past few months, and I hope that the Minister will be able to provide an update on exactly where we are now in relation to the Information Commissioner’s recommendations and the committee’s recommendations. As has already been said, the number of suspicious activity reports is considerable and appears to be growing by more than 500 a day, with nearly 2 million entries on the database.

As the noble Lord, Lord Hannay, said, this is the second recent report on money laundering. The first, in 2009, contained a recommendation that,

“The Information Commissioner should review and report on the operation and use of the … database, and should consider in particular whether the rules for the retention of data are compatible with the jurisprudence of the European Court of Human Rights”.

The second report, which we are considering tonight, includes the report from the Information Commissioner and the reiterated recommendation from the committee’s first report that,

“consideration should be given to amending the Proceeds of Crime Act 2002 to include a de minimis exclusion”,

which arises from the committee’s concerns about the requirement to report suspicions about the commission of trivial criminal offences and now the commissioner’s doubts about the justification of reporting transactions where there is a very low level of suspicion.

In their two letters of response in May and June this year—I do not know whether there have been further letters—the Government, as did the previous Government, rejected the introduction of a de minimis requirement,

“primarily due to the opportunities for criminals to exploit the threshold of any de minimis approach based on either the value or the seriousness of the crime”.

The Government state in their response that:

“Reports on the laundering of small amounts can and do help in identifying and tackling serious crime”.

That may well be the case but, when he responds, can the Minister provide some evidence to back up the statements in his department’s response of 17 May this year about the de minimis threshold?

The committee says that it is of the belief that,

“the Information Commissioner’s report justifies our view that the … database is not fully compliant with the Data Protection Act and the Human Rights Act”.

A considerable amount of information has to be provided, ideally in a suspicious activity report—namely, the subject’s full name, date of birth and addresses, as well as subject details, such as national insurance number, vehicle registration, driving licence, passport and phone numbers, website addresses, details of occupation and employer, details of any associates of the subject, and company details, including full legal name, designation, country of incorporation and contact details. The list does not end there.

Each suspicious activity report was assigned a deletion date of 10 years after receipt and was automatically deleted unless it had been amended or updated, in which case the deletion date was reset to six years following that event. There is also a procedure for earlier deletion of individual SARs where all necessary activity relating to an SAR has been undertaken, but it does appear that only a relatively small number of SARs compared with the total number have been permanently deleted from the database, although I understand from what the noble Lord, Lord Hannay, has said that some further progress appears to have been made in this regard.

The Information Commissioner queried whether there was any evidence of the value of data over time, such as SARs, being accessed which had been on the system for, say, longer than five years. Evidence was provided of the number of times that SARs received in 2004 or earlier were accessed by end-users during each month in 2009. What the figures showed was that the number of checks dropped substantially when records were over seven years old, and in addition it is possible that some of the older hits could have occurred when searching on similar names and not because of concerns about unlawful activity by that person. The Information Commissioner was not satisfied that there was currently sufficient evidence to support the long-term retention of SARs of no concern, and it raised concerns about compliance with the Data Protection Act.

Indeed, the committee was apparently also concerned that SARs were routinely retained for 10 years on a database to which there was wide access, especially in those cases where it could be shown that the initial suspicion was unfounded. The committee referred particularly to,

“the ruling of the European Court of Human Rights that the retention on the DNA database of the DNA of persons not convicted of a criminal offence could amount to a breach of their right to respect for private life under Article 8 of the European Convention on Human Rights”.

While, as I understand it, the Serious Organised Crime Agency has been considering this point with the Information Commissioner, does the Minister feel that there is any conflict between the Government’s intended change in policy on retention of DNA and the current revised policy, as I understand it, on retention of SARs as mentioned by the noble Lord, Lord Hannay of Chiswick—particularly bearing in mind the extent of information retained about an individual and their associates?

In his letter of 24 June of this year responding to the committee’s report, Mr James Brokenshire, the Parliamentary Under-Secretary for Crime and Security, said that he would provide an update on progress being made by the SARs committee towards the end of this year. Can the Minister say what progress has been made by this committee in seeking to improve the effectiveness of the regime, including considering whether legislative changes are necessary?

Apart from the committee’s own inquiry there has been very little in the way of post-legislative scrutiny of the relevant legislation that introduced the requirement to report suspicions over financial transactions to the Serious Organised Crime Agency. The law focuses on reporting, but there are no additional safeguards on the face of the legislation to prevent a disproportionate retention or to prevent reporting of cases likely to be of little, or indeed of no, interest. It seems that the Information Commissioner’s view is that any legislation which engages significant privacy concerns should include on the face of it a requirement on the Government to report to Parliament on how the measures have been deployed, including evidence of the extent to which the expected benefits and possible risks have been realised in practice, and the continued need for the measures in question. I simply ask the Minister: what is the Government’s view on that point?

The committee’s report also states that it is estimated—and I think I have got the figures right—that between 125,000 and 175,000 businesses could be subject to the SARs reporting requirements, but that apparently only approximately 5,000 actually report. No doubt there may be good reasons for that, but could the Minister say what interpretation the Government put on this piece of information and whether any checks are done to ensure that those who are subject to the reporting requirement are actually carrying out their responsibilities if they have suspicions of potentially questionable financial transactions?

The committee concludes its report by repeating its view that the Information Commissioner’s report justifies the view that the database is not fully compliant with the Data Protection Act and the Human Rights Act. It goes on to say that it looks forward to hearing from the Minister what steps the Government and SOCA will take to comply with the commissioner’s recommendations and the committee’s recommendations. As I said at the beginning, clearly some progress has been made on these issues over the past few months, but I hope that tonight the Minister will provide an updated response to the committee.

00:00

[The Minister of State, Home Office (Lord Henley)]

My Lords, as always, I am grateful to the noble Lord, Lord Hannay, and to other noble Lords who have spoken, particularly the noble Lord, Lord Judd, and my noble friend Lord Dykes who are members of the committee. I am grateful that we have had an opportunity to debate this report of the EU committee as well as, to some extent, the 2009 report and the Information Commissioner’s report which dealt with a number of these matters. I am also grateful to the noble Lord, Lord Hannay, for outlining the very important work that the House does in relation to its post-legislative scrutiny of these matters. I hope that I can give a reasonably detailed response to the various points that have been made.

The first important point is the Information Commissioner’s report. I am grateful to the noble Lord, Lord Rosser, for emphasising that. That made a number of findings, notably referring to the Elmer database. As someone rather new to this, I was fascinated to discover that the Elmer referred to in that name is not an acronym but the first name of the original head of the United States Department of the Treasury intelligence unit, back in the 1920s or 1930s, who was responsible for nailing or achieving the conviction of Al Capone on the famous occasion when they got him for tax evasion rather than for other matters. We must be grateful to that Elmer—I imagine in the United States they are even more grateful—for so doing.

The first point of call with the Information Commissioner’s report is access to the Elmer database. Secondly, the Information Commissioner referred to the retention of records, which are of no concern and which may not comply with data protection principles. Thirdly, the report also refers to how SOCA develops retention policies which are data protection and human rights compliant. I hope that I can deal with all those matters as I know that the noble Lord, Lord Hannay, as chairman of the committee, will have been particularly concerned about how SOCA had been actively working on these recommendations.

I start with access to Elmer. As recommended in the report, SOCA has continued to maintain its robust policies and procedures in respect of access. It must be remembered that Elmer is a very important intelligence tool, not just in respect of financial crime but in respect of all levels of all crime. The use of financial intelligence is not an addition but an essential part of the wider armoury of techniques to investigate criminality. That said, obviously access to Elmer has to be limited and those wanting direct access have to go through a user agreement which sets very strict criteria and which is kept under review. It is also of importance that these are individual financial investigators rather than bodies themselves. SOCA provides guidance to users and all users are required to undertake training which is generally delivered by the National Policing Improvement Agency or some other similarly approved agency before accessing the database.

Having said that, I cannot give any assurance about who may have access to Elmer in the future but, of course, concerns of this House will be considered very carefully as we develop these items.

I move on to the question of record retention and deletion policy. SOCA has introduced a new retention regime that will delete suspicious activity reports that are more than six years old. It expects to complete this task very soon. I will add one further remark. I need not even say “very soon” because the task was completed today. I can assure the noble Lord that as of today there are 1,384,477 entries on the Elmer database, and that 584,351 entries were deleted in a recent exercise. All entries that were more than six months old were deleted today, so we achieved the aim of deleting them by the end of the year.

My third point on the Data Protection Act is that SOCA will implement a Data Protection Act and Human Rights Act-compliant retention policy in three months. It is important to note that the Elmer database does not focus specifically on collecting information relating to individuals. It is essentially an assembly of reports submitted in the light of the Proceeds of Crime Act, the Terrorism Act and associated regulations. SOCA has introduced processes that will provide for the immediate deletion of SARs that are confirmed as being not linked to criminality, and for the deletion of others after six years. That is why I was pleased to make the remark about what we achieved today.

The report also asked if there was a justification for the current arrangements for reporting SARs. We feel that setting a suspicion threshold would send the wrong signal to reporters, who may reduce their scrutiny. Experience shows that criminals will attempt to find ways to circumvent controls in order to avoid arousing suspicion—for example, by breaking down large deposits. Reports that may look minor may take on a much larger significance to law enforcement when matched with intelligence both within Elmer and beyond. A threshold might have the unintended and unwanted effect of causing us to miss vital intelligence opportunities.

I will deal with a couple of further questions. The first, which was raised by the noble Lord, Lord Hannay, referred to Somali piracy. We recognise the committee's concerns regarding possible links between the payment of ransoms and terrorist finance in Somalia. There is currently no evidence of any formal organisational relationship between pirates and terrorist organisations operating in Somalia. However, we are keeping this assessment under review. My honourable friend Mr James Brokenshire, who was referred to by the noble Lord, Lord Rosser, is in receipt of the letter on this matter from the noble Lord, Lord Roper, and will provide an appropriate reply in due course. I cannot take that further and say precisely when it might appear.

The second point I will deal with, which concerns money-laundering and the Financial Action Task Force, was raised by my noble friend Lord Dykes.

[Lord Hannay of Chiswick]

The noble Lord is moving on from the question of Somali piracy, so I must draw his attention to the fact that he has not answered the main point that I made. One can have two views about whether it is meaningful to say that there is no direct evidence of ransom moneys reaching terrorists. However, I am not pressing the point and did not press it in my introductory question. The question that I pressed, to which he did not reply, was why the Government do not consider that the assembling of such ransoms should give rise to the filing of suspicious activity reports, because the ransoms concerned will undoubtedly be the proceeds of crime and will undoubtedly end up in the hands of criminals? In all our correspondence it has been impossible to get an answer on this point. That is why I used the somewhat unparliamentary term, “obfuscation”. Why are the Government not simply telling people who put together these ransoms that if they have reason to believe that these will end up in the hands of criminals—and I cannot believe that they do not have that—then they should file an SAR? That does not mean that the person who files the SAR is committing or admitting any wrongdoing at all. However, I find it hard to believe that since the British Government are, I assume, trying to prevent the laundering of the proceeds of ransoms around the world, are working with many other countries to do that, and have, I believe, an intelligence operation based in the Seychelles to compare evidence and to try to find out where this money goes to—

[Baroness Anelay of St Johns]

My Lords, I think that I ought to point out, without wishing to interrupt the noble Lord, Lord Hannay, although I do, that the Minister is still restricted to a 12-minute response time.

[Lord Hannay of Chiswick]

I am sorry; I am just coming to the end. I just was saying that I still find it very odd—it would be helpful if the Minister would reply on this point—that the Government do not consider that an SAR should be filed in such circumstances.

[Lord Henley]

My Lords, the noble Lord would never expect any obfuscation from me. He is a very distinguished former civil servant from the Foreign Office, a department which also has never obfuscated in any way whatever. I would prefer it if he would wait for a response from my honourable friend Mr James Brokenshire, which I am sure will be provided in due course. I think that that is as far as I can go on these matters, and I hope that the noble Lord will accept that. I am also mindful of the intervention of my noble friend the Chief Whip that I must move on.

I was briefly touching on the question of the Financial Action Task Force, and briefly making it clear to my noble friend Lord Dykes that it is reviewing global standards on countering money-laundering and terrorist financing. In February 2012 the FATF member countries will approve changes to the standards following this review. I hope that my noble friend will be prepared to wait for that review.

I hope that I have given a number of assurances that will satisfy noble Lords, even the noble Lord, Lord Hannay. I hope that he will be prepared to await the response from my honourable friend Mr Brokenshire. Again, I am grateful to all noble Lords for their interventions in this debate. I feel that we have had a useful discussion on these matters.

House adjourned at 8.37 pm.