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Mary Macleod (Brentford and Isleworth) (Con)
1. What his policy is on the use of volunteers in hospitals.
The Minister of State, Department of Health (Paul Burstow)
The coalition Government recognise the tremendous contribution that volunteers play in enhancing quality and experience in health and social care, including within hospitals. We are working with partners, including the National Association of Voluntary Service Managers, to strengthen this role during service reform.
Mary Macleod
Mr Speaker, may I wish you and the House a very happy and healthy new year?
I thank the Minister for his response. I recently attended the local volunteering awards in the West Middlesex hospital in my constituency. Almost 400 volunteers do great work for patients and the hospital. What financial assistance is available to hospitals to support these volunteering projects?
Paul Burstow
I very much agree with the hon. Lady about the need for NHS trusts to consider their stance on volunteering. Indeed, I suspect Members of all parties have visited hospitals and worked with friends organisations over the Christmas period and have seen the good work that volunteers do in our hospitals. Our aim is to make sure that NHS trusts and commissioners of health and social care have the tools and information they need to make good judgments about investing in volunteering. That was the purpose of the volunteering strategy that we published last year.
Graeme Morrice (Livingston) (Lab)
We all recognise the huge contribution that volunteers make to the NHS, so will the Minister take this opportunity to recognise the contribution of Clive Peedell, the co-chair of the NHS Consultants Association, who is taking part in Bevan’s run today, highlighting concerns among the medical profession about the impact of the dreadful Health and Social Care Bill?
Paul Burstow
I would certainly wish that gentleman well with his run. I am sure that the contribution he makes through that charitable act is one that will stand us all in good stead in due course.
Sir Bob Russell (Colchester) (LD)
Is there a conflict between the big society, volunteers and localism if major retail stores are brought into hospitals to the detriment of friends organisations?
Paul Burstow
My hon. Friend raises an important point. I am aware that it is a matter of concern that over a number of years some hospitals have chosen not to use the WRVS or friends organisations’ services. These decisions have to be made by local NHS trust boards, but the purpose of the strategy we published last year is very much to make sure that when the boards make these decisions they are focused on the benefits—the benefits of volunteering for the volunteer, the organisation and the patients.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
What is the Minister’s assessment of the number of unpaid interns working in the NHS?
Paul Burstow
As far as I am aware, no assessment has been made to analyse the number of unpaid interns. What is very clear, however, is that when NHS organisations are using people to provide services as volunteers, that is clearly separate from what would be regarded as paid employment. That is clear in the strategy we set out last year and clear in the advice and guidance provided by the Cabinet Office as well.
Graham Evans (Weaver Vale) (Con)
2. What recent representations he has received on access by NHS patients to drugs invented and developed in UK laboratories; and if he will make a statement.
The Secretary of State for Health (Mr Andrew Lansley)
Representations received have strongly supported the Government’s “Strategy for UK Life Sciences”, which was published on 5 September. Speeding up clinical trials approval, enabling the unique NHS clinical databanks to support research, the early adoption of new medicines and other initiatives will bring NHS patients the fullest benefit from innovation and will promote growth in UK biosciences.
Graham Evans
What steps are being taken towards closer collaboration between the NHS, industry and our world-class universities to drive improvement and innovation in the NHS for the benefit of current and future NHS patients?
Mr Lansley
I am grateful to my hon. Friend. He rightly highlights an area where we are clear that innovation can be considerably supported, and not only by the academic health science centres, which were established under the last Government. As the life sciences strategy set out in early September made clear, we want to create academic health science networks across the NHS so that higher education, industry and the NHS can work together to bring about the greatest possible innovation to the benefit of patients.
Mr Kevin Barron (Rother Valley) (Lab)
The current pharmaceutical price regulation scheme is able to recognise the fact that pharmaceutical companies based here and developing drugs here should be paid a little bit more for their drugs by the NHS on the basis of their worth for the general economy. Will the Secretary of State tell us whether his proposals for value-based prices will affect that?
Mr Lansley
The right hon. Gentleman will be aware that the existing PPRS does not in any sense directly fund innovation in the United Kingdom. Although it takes account of expenditure on innovation, it cannot identify that expenditure in the United Kingdom as a beneficiary through pharmaceutical pricing. As the right hon. Gentleman knows, we are continuing to discuss with the industry the shape of value-based pricing from January 2014, the purpose being to ensure that we fund the value associated with new medicines: the therapeutic value to patients, the innovative value—which will highlight the UK as a base for research and development—and the societal value.
Jason McCartney (Colne Valley) (Con)
3. If he will take steps to ensure that the safe and sustainable review of paediatric cardiac services is fully inclusive.
The Minister of State, Department of Health (Mr Simon Burns)
The review of children’s congenital heart services is a clinically led NHS review, independent of Government. In conducting it, the Joint Committee of Primary Care Trusts has aimed to be as inclusive as possible in relation to all issues.
Jason McCartney
The Minister will be aware that the review has been called into question because the consultation has not encompassed other medical conditions such as respiratory problems. Will he intervene so that a consensus approach can now be taken?
Mr Burns
As I have said, the review is clinically led and independent of Government, and I am afraid that it would not be appropriate for me, or my colleagues, to intervene. Moreover, the review is the subject of legal proceedings. It will be for the Joint Committee of Primary Care Trusts, on behalf of local commissioners, to decide the future pattern of children’s heart services on the basis of the best available evidence.
Greg Mulholland (Leeds North West) (LD)
It seems nonsensical to deal with the provision of surgical services for adult and child congenital cardiac patients in separate reviews. Given the delay in the review of children’s services, does the Minister not agree that it is time to consider including them in the forthcoming review of adult services?
Mr Burns
I am grateful to the hon. Gentleman for his suggestion, but I am afraid that I do not share his view. As he knows, there will be a review of adult services, but it has always been considered most appropriate to deal with paediatric cardiac services before adult care, and that is what we will continue to do.
Dr Julian Lewis (New Forest East) (Con)
Although the paediatric heart unit at Southampton general hospital is rated the best in the country outside London, it was included in only one of four options under the review. In the past, the Minister has helpfully hinted he might not be confined to considering only those four options. Can he expand on that?
Mr Burns
I can expand on it by saying that it will not be me who considers the options. As I have told my hon. Friend before, this is an independent review. However, as he suggests, the JCPCT may decide on four, six or seven possible sites. It all depends on what the consultation produces, and the clinical decision on what is the most appropriate number of sites, which will happen eventually.
I congratulate my hon. Friend on his championing of Southampton general hospital as the local Member of Parliament.
Mr David Evennett (Bexleyheath and Crayford) (Con)
4. What recent representations he has received on access to the cancer drugs fund; and if he will make a statement.
The Secretary of State for Health (Mr Andrew Lansley)
We have received a number of supportive representations regarding the cancer drugs fund. Indeed, the Rarer Cancers Foundation recently praised the fund for making additional cancer drugs available to almost 10,000 patients in England since October 2010. It contrasted that access to medicines in England with the lack of such access in Wales.
Mr Evennett
My right hon. Friend has cited the view of the Rarer Cancers Foundation. Does he agree that this policy has put patients and doctors back at the heart of decision making, and has transformed the ability of cancer patients to obtain clinically effective treatment so that they can gain precious extra time with their families?
Mr Lansley
My hon. Friend is absolutely right. In the summer of 2010, we learnt from Sir Mike Richards’s review that patients in this country were less likely to have access to the latest cancer medicines within five years of their introduction than those in many other European countries. I am proud that so far the coalition Government have been able, through the cancer drugs fund, to help 10,000 patients to gain access to the latest cancer medicines.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that response. Last year, Cancer Research UK revealed that cancer deaths were down 20% since 1985 and survival rates have doubled in the last 40 years. Does the Minister agree that we must continue to research proactively and thereby continue to reduce deaths and ensure continuity of life?
Mr Lansley
I am grateful to the hon. Gentleman, and he is absolutely right about that, of course. He will also be aware that Cancer Research UK highlighted not only the progress that had been made, but the variation in progress on different cancers. Harking back to the earlier point about innovation, we must focus on how some of these innovations will enable us to deliver improved survival rates for specific cancers, and I announced last month that we would be funding additional scanner facilities in this country—proton beam therapy scanning interventions—in order to enable some of the most difficult cancers, such as brain cancers in children, to be treated in this country effectively.
Duncan Hames (Chippenham) (LD)
A cancer patient in my constituency faces an avoidable further round of chemotherapy having waited for the strategic health authority to make an individual funding request decision on the drug Plerixafor, which is not included in the cancer drugs fund. Will the Minister consider broadening the scope of the cancer drugs fund to include such drugs that are critical in cancer patients’ care, in addition to their other uses?
Mr Lansley
I should be grateful if my hon. Friend would write to me about that. The cancer drugs fund is focused on an identified lack of access to cancer medicines, but if a drug is of particular benefit to a cancer patient, such as in the instance he describes, it should be possible for SHA panels to include it within the scope of the fund.
Valerie Vaz (Walsall South) (Lab)
Will the Secretary of State confirm whether those receiving treatment under the cancer drugs fund will also be guaranteed treatment under the new scheme?
Mr Lansley
The intention is that from January 2014 as new medicines are introduced through the value-based pricing system, the reimbursement price in the NHS will reflect their value and therefore, by extension, they will all be available through the NHS.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
5. What steps he is taking to ensure drugs approved by the National Institute for Health and Clinical Excellence are made available to all patients in the NHS.
The Secretary of State for Health (Mr Andrew Lansley)
The NHS is required to fund drugs and technologies recommended in NICE technology appraisals, in line with the NHS constitution. The NHS chief executive’s report “Innovation, Health and Wealth” sets out plans for the introduction of a compliance regime to ensure rapid and consistent implementation of NICE technology appraisal recommendations throughout the NHS.
Stephen Metcalfe
I greatly welcome the Government’s recent announcement on swift and proper implementation of NICE guidance that allows patients access to innovative treatments. In order for cost-effective treatments to secure NICE guidance approval, in the first instance will the Secretary of State ensure that NICE’s methodology review reinforces the importance of appraisal appropriately reflecting clinical practice when assessing new treatments?
Mr Lansley
I am grateful to my hon. Friend, who clearly understands that NICE is responsible for the methods it uses in the development of its guidance and that it is undertaking a review of its appraisal methods. I expect that that will be published for consultation this year. NICE should issue final guidance only after careful consideration of the evidence and public consultation with stakeholders, including patient and professional groups.
John Healey (Wentworth and Dearne) (Lab)
It is sometimes hard to follow the Secretary of State as he can get lost in his own jargon. Just to be clear: if NICE says that a drug should be available to patients on the NHS wherever they live and whatever their clinical commissioning group, will they get it? Can he give that guarantee today?
Mr Lansley
The right hon. Gentleman knows perfectly well that that did not happen under the last Government. The NHS chief executive’s innovation report of early December made it clear that we will make certain that when NICE gives a positive appraisal for a medicine, it is automatically included in formularies, and also that we will establish an effective compliance regime in respect of NICE appraisals and establish a new NICE implementation collaborative to make it happen. As the right hon. Gentleman knows perfectly well, the legislation is clear: when NICE gives a positive appraisal, a medicine should be available across the NHS. That was not achieved under his Government. We will achieve that, and the NHS chief executive is setting out to show how that will happen in the future.
Mr Marcus Jones (Nuneaton) (Con)
Under the current regime of primary care trust commissioning, my constituents in Warwickshire often complain to me that drugs approved by NICE are not always available locally but are available in neighbouring commissioning areas. What steps are being taken to ensure that new NHS commissioning boards and local commissioning groups promote the NHS constitution and the right of patients to access NICE-approved drugs?
Mr Lansley
My hon. Friend makes exactly the right point, in that what the last Government said happened did not happen: such medicines were not available, and there was a postcode lottery in accessing many of them. That, among other reasons, is why the chief executive of the NHS published his report, which will introduce the NICE compliance strategy. We will require all NICE technology appraisals to be incorporated automatically in the local drug formularies, and the NICE implementation collaboration will support the prompt implementation of NICE guidance.
Fiona Mactaggart (Slough) (Lab)
Last week in my constituency, a community pharmacist refused to issue a blind patient with dosage packs unless they paid an additional fee. What redress will such patients have in the newly reorganised NHS regarding actions such as this by community pharmacists, which in my view are against the Disability Discrimination Act?
Mr Lansley
I should be grateful if the hon. Lady wrote to me about that case and gave me the opportunity to look at it, which I would be pleased to do. From my point of view, we do not countenance such requirements, through charging, denying patients access to any NHS treatment.
David Tredinnick (Bosworth) (Con)
In addition to approving drugs, NICE has also approved acupuncture for lower back pain. Should this not be widely available on the health service now?
Mr Lansley
Of course, my hon. Friend will know very well that choice of treatment is a shared decision between patients and their clinicians. NICE appraisals are about whether treatments are available in the NHS and giving information to clinicians about their relative clinical and cost-effectiveness, not prescribing that treatments should be available in specific circumstances.
Nick Smith (Blaenau Gwent) (Lab)
6. What discussions he has had with ministerial colleagues on the effects of fuel poverty on health.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I and my officials have worked closely with the Department of Energy and Climate Change on the development and implementation of the cold weather plan for England, which aims to reduce the health impacts of cold weather on vulnerable people. We have also put £30 million into the warm homes healthy people fund to fund local authority projects to reduce the impact of cold weather.
Nick Smith
The Marmot report confirmed that cold homes are bad for our health. My local newspaper has highlighted the case of a low-income working family who have to choose between food and heat every day, with no help from their energy provider. Will the Minister ensure that energy companies do more to tackle fuel poverty, so that the NHS does not have to foot the bill for their profit?
Anne Milton
As I said, my colleagues in DECC are working closely with the energy companies. I point out to the hon. Gentleman that this coalition Government are the first to put in place the cold weather plan to reduce those 27,000 excess winter deaths. Perhaps his local paper would like to contact the Welsh Assembly Government to see what they are doing.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
Fuel poverty clearly shows the link between housing, health care and well-being. Last week, the Prime Minister called for a merger of health and social care. Does the Minister agree with me that if we are to have a true merger of health and social care, housing—through health and wellbeing boards and other mechanisms—has to be a key ingredient of that?
Anne Milton
Of course, my hon. Friend is absolutely right that the integration of health and social care is critical, particularly for issues such as this. The changes we are making to public health and the movement of public health into local authorities will only ensure better integration, so that we can reduce those 27,000 excess deaths.
Mrs Madeleine Moon (Bridgend) (Lab)
7. What research his Department has undertaken on the prevention of suicide.
The Minister of State, Department of Health (Paul Burstow)
The Department of Health funds the national confidential inquiry into suicide and homicide by people with mental illness. The Department is funding an investigation of self-harm, and the National Institute for Health Research is funding a range of further research relevant to suicide prevention.
Mrs Moon
The Minister will be aware that core funding for research into the causes, effects and geographical spread of suicide and its frequent precursor, self-harm, is essential. More than 200,000 people present at accident and emergency with self-harm. I am very concerned to hear that the ongoing funding for the multi-centre study of self-harm is potentially at risk. Will he agree to meet me and the research project leads to discuss this and ensure that that research continues?
Paul Burstow
The hon. Lady chairs the all-party group on suicide and self-harm prevention. She does a lot of important work in this House in that regard, and I would be only too happy to talk to her about research priorities in this area. The Government are examining the research priorities to support the new strategy, which we plan to publish in the near future.
Mr James Gray (North Wiltshire) (Con)
I pay tribute to the hon. Member for Bridgend (Mrs Moon), who has done fantastic work on the prevention of suicide. It is not the Department of Health’s job to regulate the worldwide web, but what work has the Department done on examining the link between the watching of violent websites—and, indeed, looking at websites that promote or facilitate suicide—and the actual carrying out of suicide?
Paul Burstow
My hon. Friend makes a very important point, which has been raised by a number of charities, including Papyrus, during the consultation on the draft strategy. It is important to stress that the internet industry has been willing to engage in positive initiatives, not the least of which is Facebook and Google’s work with the Samaritans to make sure that whenever anyone types in “suicide” a link to the Samaritans always appears first. However, more needs to be done and we need the industry to tackle those darker sides of the internet to make sure that they do not prey on vulnerable people and do not peddle suicide.
Robert Flello (Stoke-on-Trent South) (Lab)
Given the crucial role that the chief coroner was to have had in monitoring and advising the Department of Health on the incidence of suicide across the nation, will the Minister liaise with the Lord Chancellor to ensure that a chief coroner is appointed speedily and that powers are put in place quickly to make sure that this work can be done?
Fiona Bruce (Congleton) (Con)
8. When he expects residents in Congleton constituency to benefit from investment in telehealth and telecare services by the NHS.
The Secretary of State for Health (Mr Andrew Lansley)
I am pleased to say that patients in Congleton who have health conditions such as heart failure or chronic respiratory disease can already benefit from these technologies. I am committed to supporting the use of telehealth and telecare services by working with industry to improve the lives of 3 million people across the country who are living at home with long-term conditions.
Fiona Bruce
I thank the Secretary of State for that reply, and indeed innovative schemes in my constituency and across the Cheshire East council area, such as DemenShare, are already using this technology. But what other schemes and advances will the Government introduce for an area that has the highest level of elderly people per population head in the north-west of England and where the number of over-65s will grow by 50% and the number of over-85s is set to more than double by 2025?
Mr Lansley
I am grateful to my hon. Friend for her question. She rightly talks about this increasing number of older people in the community and rightly says that we want to support them to be independent and to improve their quality of life.
The whole system demonstrator programme was the largest trial of telehealth systems anywhere in the world. In the three pilot areas of Kent, Cornwall and Newham, it demonstrated a reduction in mortality among older people of 45%; a 21% reduction in emergency admissions; a 24% reduction in planned admissions to hospital; and a 15% reduction in emergency department visits. Those are dramatic benefits, which is why we are so determined to ensure, over the next five years, that we reach out to older people who are living at home with long-term conditions and improve their quality of life in this way.
Mr Philip Hollobone (Kettering) (Con)
9. If he will consider proposals to introduce a national screening programme to detect group B streptococcus in pregnant women.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The UK National Screening Committee is reviewing the evidence for screening for group B streptococcus carriage in pregnant women, and I am sure that my hon. Friend will be pleased to hear about that. The committee will review the international literature, and a public consultation on the results will open in spring 2012.
Mr Hollobone
Group B streptococcus is the UK’s most common cause of life-threatening infection for newborn babies. Will my hon. Friend agree to meet me and Group B Strep Support, the excellent campaign group, to see how calls for a national screening programme might best be advanced?
Anne Milton
I am certainly happy to meet my hon. Friend. I should point out that the Royal College of Obstetricians and Gynaecologists is updating its guidelines and that NICE is also developing guidance. The issue is complex, however, and even testing is not 100% effective. Women who produce a positive result during pregnancy might be negative during labour and, more importantly, those who are negative during pregnancy might be positive during labour. It is important that we get the most up-to-date evidence and ensure that we reduce the tragic consequences of this infection.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
I welcome the Minister’s statement, but may I urge her to consider carefully the kind of testing, as the false negatives and positives to which she refers come with the current testing and there are better tests? About 340 babies are affected every year of which one in 10 dies and one in five is permanently disabled. This is a very serious matter and I hope she will do all she can to deal with it.
Anne Milton
I will certainly do all I can to deal with it. As the right hon. Lady says, the consequences are tragic but this is a complex area that has changed quite rapidly. I think the US is now at a similar level of infection to us, but what remains a challenge is ensuring that we have an effective test that does not produce false positive or, more seriously, false negative results and that we have effective treatment that works in 100% of cases.
Steve McCabe (Birmingham, Selly Oak) (Lab)
10. What recent estimate he has made of the cost to the public purse of NHS reorganisation.
The Minister of State, Department of Health (Mr Simon Burns)
The cost of the NHS modernisation is estimated to be between £1.2 billion and £1.3 billion. That will save £4.5 billion over this Parliament, and £1.5 billion per year thereafter. We will reinvest every penny saved in front-line services.
Steve McCabe
I am grateful for that answer. The Minister will be aware that the figure he has given is about half what the primary care trusts believe they are required to keep back to fund the reorganisation: they put it at £3.4 billion. Given his answer today, will he write to South Birmingham primary care trust to tell it that it no longer has to hold back £25 million for that purpose and that it can use that money to cut the 18-week waiting list, which has risen by 36% since he assumed office?
Mr Burns
May I say, in the nicest possible way, that I think the hon. Gentleman is a tiny bit confused? I think he is confusing the one-off costs of the modernisation with the 2% hold-back figures used by the PCTs, which put aside money—a process instigated by the right hon. Member for Leigh (Andy Burnham), which we carried on—that can be used if a PCT gets into financial problems. If it does not get into financial problems, it can then use the money to invest in front-line services.
Mr Peter Bone (Wellingborough) (Con)
The Conservative-led coalition should be congratulated on introducing a measure that will get rid of red tape and bureaucracy by getting rid of strategic health authorities and primary care trusts. Do the Labour Opposition not look like dinosaurs when they try to defend those bodies?
Mr Burns
I am very grateful to my hon. Friend and I am always reassured when he congratulates the coalition Government, as it suggests to me that we are getting something right. My hon. Friend is absolutely right. As everyone who understands health policy in this country recognises, the NHS must evolve to meet changing needs and we are improving effectiveness and efficiency and saving money by cutting out administration and bureaucracy so that we can reinvest in front-line services to look after the health interests of all our constituents.
Andrew Gwynne (Denton and Reddish) (Lab)
Figures revealed to the Opposition under freedom of information procedures show that GPs will receive up to £115 an hour for commissioning health care services on top of their existing salary. It makes no sense at all to take GPs away from patient care to become part-time accountants. When the NHS needs every penny it can get, patients will be astounded to hear that the Government plan to pay GPs twice. This comes at a time when 48,000 nursing posts are being axed and £3.5 billion is being set aside for the Minister’s bureaucratic upheaval. Will he now accept that the NHS can ill afford for money to be wasted on a top-down reorganisation that few want? Is it not now time for him to scrap the Bill?
Mr Burns
It is nice that the hon. Gentleman got the mantra in at the end—I have been expecting it all through this Question Time. He is wrong; what is important and what this modernisation has at its heart is the need for GPs to commission care for patients, because GPs are best equipped to know the needs of their patients. That is the way forward. Also, we are cutting bureaucracy and administration by 45% so that we can reinvest that money in front-line services. We want to spend money on health care and on improving outcomes, not on managers and bureaucracy.
John Pugh (Southport) (LD)
May I congratulate the Secretary of State and the Prime Minister on the productive ward initiative? The NHS document “Top Tips for spreading The Productive Ward” says:
“Set a realistic time scale. Take your time and do not rush. Take small steps and complete them before moving on to the next.”
Is this advice generally applicable to NHS reform?
Mr Burns
As the hon. Gentleman recognised at the beginning of his question, this is important and excellent advice for nurses and other health care professionals to give care, consideration and attention to all patients so that they can be looked after in an appropriate and caring way. That is the way forward to making the health service more responsive to the needs of patients and to the improvement of health outcomes.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
What assessment has the Minister made of the impact of the NHS reorganisation on waiting times?
Mr Burns
The hon. Lady raises an extremely important point. The whole purpose of the modernisation of the NHS is to enable it to meet the challenges of an ageing population, an increased drugs bill and new medical procedures, so that we can ensure that patients get their treatments, within the responsibilities of the NHS constitution, and do not have to wait undue lengths of time for treatment.
Chris Ruane (Vale of Clwyd) (Lab)
11. What recent representations he has received on the Health and Social Care Bill.
The Minister of State, Department of Health (Mr Simon Burns)
The Government have listened to representations throughout the passage of the Health and Social Care Bill. In addition to the consultation on the White Paper, the NHS Future Forum has undertaken two engagement exercises. The first involved 6,700 people directly and received more than 28,000 comments and e-mails, and the second involved more than 12,000 people at more than 300 events. Ministers have also continued to meet and to receive representations from a range of interested parties on a regular basis, and we will continue to do so.
Chris Ruane
I thank the Minister for that response. May I ask what specific representations he has had on children’s well-being? Is he aware that the Children’s Society will this Thursday publish its 2012 “Good Childhood” report, which will include a specific report on how central and local government could improve and promote positive well-being among children? Will the Minister and the Secretary of State meet the Children’s Society to discuss that important report?
Mr Burns
Throughout the consultation process there have been comments and responses to proposals across the whole of the health area, including on children’s health and well-being. Obviously, I cannot comment on a report that will not be published until later this week, but I or one of my ministerial colleagues would be more than happy to meet the Children’s Society once the report has been published if the society thinks that a meeting to discuss the report’s contents would be worth while.
Mr Stephen Dorrell (Charnwood) (Con)
Against the background of the recommendation of the NHS Future Forum that a key priority for the future is greater integration between health care and social care—a priority that was explicitly endorsed last week by the Prime Minister—does my right hon. Friend agree that the key opportunity in the Bill, through the health and wellbeing boards, is to drive that agenda, which has been much talked about for many, many years now, and actually to start to deliver on that rhetoric?
Mr Burns
My right hon. Friend is absolutely right; of course, when he was Secretary of State he did a considerable amount of work to lay the ground rules for the move towards greater integration, because that is the way forward. My right hon. Friend makes a very valid point: it is the way forward and we fully recognise that. We are deeply committed to achieving that aim, and that is why my right hon. Friend the Secretary of State has added an extra £150 million to the existing £300 million, to facilitate progress towards it.
Andy Burnham (Leigh) (Lab)
May I tell the Secretary of State and the Minister that he will receive more representations on his Bill later this week from two hospital doctors who, early this morning, began a 160 mile run to protest against his Bill, from Bevan’s statue in Cardiff to his Department? [Interruption.] The Secretary of State should listen. Let me remind him why people are so angry. Nobody voted for the Bill. It was ruled out by the coalition agreement, and it is now the unelected House deciding the future of the NHS, passing amendments that he was too scared to table in this House.
Will the Minister today have the courage to admit that it is now the Government’s intention to allow NHS hospitals to make 49% of their income, effectively devoting half of their beds, from the treatment of private patients?
Mr Burns
May I say a happy new year to the right hon. Gentleman as well? I believe that his analysis of the support for the Bill is flawed, because there are a number of areas where a number of organisations warmly welcome its contents. For example, the BMA voted in favour of GP commissioning at its special general meeting last year.
On the question of 49%, the shadow Secretary of State has been uncharacteristically forgetful, because of course he will appreciate that the cap applies only to foundation trusts, not to non-foundation trusts, and that is no different today from what it will be after the modernisation—and it was a policy that his Government brought in.
Andy Burnham
No, it was not. That policy would never, ever have come forward under a Labour Government—and I know that the right hon. Gentleman has not denied it. We, the Opposition, will now make it our business to tell every single patient in England about his plans for the NHS. People can finally see the Bill for what it is: a privatisation plan for the NHS. England’s hospitals will never be the same again if the Bill gets through: an explosion of private work; longer waits for NHS patients; profits before patient care. Will not the only choice on offer for patients be the old Tory choice in the NHS: wait longer or pay to go private?
Mr Burns
I am afraid that the shadow Secretary of State is just totally wrong. This Government have no intention to and will not privatise the national health service. We want to improve patient outcomes and the patient experience. The right hon. Gentleman should look again at the 49% that he talks about, because we are not changing the situation, particularly because it does not apply to trusts at the moment; it is only for foundation trusts.
Guy Opperman (Hexham) (Con)
12. What steps he has taken to implement a flexiscope bowel cancer screening test.
The Minister of State, Department of Health (Paul Burstow)
The IT system to support the pilots of flexible sigmoidoscopy screening is under development and local bowel screening programmes will be invited to become pilot sites shortly. We remain determined to deliver our cancer outcomes strategy commitment of 60% coverage across England by March 2015.
Guy Opperman
The Government rightly chose two out of the three pathfinder sites to be in the north-east, at South of Tyne and Tees. When will the date be given for local screening centres to be invited to bid to become pilot sites and have patients as a future part of that bowel cancer screening programme?
Paul Burstow
We debated these issues before Christmas. I can confirm that advice to local bowel screening programmes on bidding to become pilot sites will be published shortly and the process of recruiting pilots will start this month.
Mr Frank Field (Birkenhead) (Lab)
13. What estimate he has made of the cost to the public purse of NHS reorganisation in (a) Birkenhead constituency and (b) England.
The Minister of State, Department of Health (Mr Simon Burns)
The cost of the NHS modernisation is estimated to be between £1.2 billion and £1.3 billion. That will save £4.5 billion over this Parliament, and a further £1.5 billion each year thereafter. [Hon. Members: “It is a different question.”] It is the same question. We do not have a local breakdown of these figures, as that will depend on local decisions.
Mr Field
Perhaps the right hon. Gentleman will ask the House of Commons Library for the answer so that he can give it to me next time, and also look at the increase in the number of managers in Wirral over the past five years. The number has gone up by more than a quarter. With that size increase, why are those staff not being used to pilot his reorganisation?
Patrick Mercer (Newark) (Con)
The Minister is well aware of the reforms to the NHS in my English constituency, but many of my constituents question whether they are getting value for money in view of the expansion of population in Newark over the next couple of years. Will he look again, please, at the Newark health care review?
John Mann (Bassetlaw) (Lab)
14. How many (a) accident and emergency departments and (b) maternity units he expects will be (i) downgraded and (ii) closed between May 2010 and May 2015.
The Minister of State, Department of Health (Mr Simon Burns)
The reconfiguration of local health services, including A and E and maternity services, is and will remain a fundamentally local process. What matters is that decisions about service changes are clinically driven, and that patients and the public are involved in those changes to ensure that they get the highest quality care.
John Mann
I refer to the answer that the Minister just gave to the hon. Member for Newark (Patrick Mercer). The buck stops with the Minister. Would he like to congratulate the SOS Save Our Services group in Bassetlaw, which in the past two months has overturned the proposals to downgrade A and E and maternity services at Bassetlaw hospital? Is that not a good example of the real big society?
Mr Burns
As the hon. Gentleman knows, on 20 May 2010 my right hon. Friend the Secretary of State brought in the four conditions that had to be met for reconfiguration, which included paying attention to the views of local stakeholders and the medical profession. So, as the hon. Gentleman rightly says, the decision has been taken not to proceed with the changes at Bassetlaw hospital. No doubt he also welcomes the £900,000 that is being invested to expand and improve Bassetlaw hospital’s A and E facility.
Mr Jamie Reed (Copeland) (Lab)
The whole House will note that the moratorium on hospital and ward closures has clearly ended, but as my hon. Friend the Member for Bassetlaw (John Mann) rightly said, the NHS risk registers held by regional and local health boards around the country clearly showed the risks associated with closures and the downgrading of hospital wards. The Government’s Health and Social Care Bill poses risks to the safety and quality of services, yet the Secretary of State has appealed against the Information Commissioner’s ruling that the NHS national risk register should be published. Members of both Houses may be denied the opportunity to scrutinise the real risks that the Bill poses to the NHS before they are asked to vote on it for a final time. Will the Minister give a binding commitment that the risk register produced by his Department will be published in full before the Bill returns from the Lords?
Mr Burns
The right hon. Member for Leigh (Andy Burnham) did not publish a risk register during his tenure. His predecessor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), did not publish the risk register on two occasions during his tenure. The bits relevant to the Health and Social Care Bill have been made public, but we will not be publishing the risk register because, as the hon. Gentleman knows, my right hon. Friend the Secretary of State is appealing, as he is entitled to do, against the Information Commissioner’s decision—[Interruption.] We have a right of appeal, which we are exercising, and we will have to wait until a decision has been reached on appeal. Until then, no we will not be publishing the risk register, because it is not necessary or appropriate.
Mr Graham Allen (Nottingham North) (Lab)
15. What steps his Department is taking to prevent ill health and its associated costs through early intervention.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The public health reforms have at their very heart the prevention of ill health and its associated costs, and the hon. Gentleman in his question clearly recognises the critical impact that intervening early can have. The health visitor work force are an important part of early intervention. We picked up a very demoralised and depleted health visitor work force, so I am pleased to report that training commissions for health visitors are up 200%, and we plan to double the number of family nurse partnerships available by 2015. We are also developing a vision for school nursing.
Mr Allen
The introduction of the family nurse partnership and the enhancement of the amount of money available to it is a great credit to the previous Labour Government and the current coalition Government. It enables single teen mums to get one-to-one help from a health visitor. Given the economic circumstances, does the Minister accept that we need to be a bit more inventive to ensure that that very good scheme goes even further? Will she discuss with the city of Nottingham and its health service a payment-by-results system to extend the family nurse partnerships further?
Anne Milton
Yes, we are supporting the development of social investment and outcome-based funding models, and I am pleased that the hon. Gentleman has raised the issue of being innovative about how we do that, because it is important. We had a rather static situation previously, so I welcome his interest in developing and testing a payment-by-results scheme in Nottingham, and we will be interested to see his detailed proposals and how that develops locally soon. What matters are the results that we get from the schemes.
Mr Graham Stuart (Beverley and Holderness) (Con)
I pay tribute to the hon. Member for Nottingham North (Mr Allen) for his work on early intervention and applaud the efforts made by the Minister to recruit more health visitors, but when will the Government be able to deliver the additional health visitors on the ground, trained and in service, in order to reverse the cuts in the health visitor service under the previous Government?
Anne Milton
My hon. Friend is right; we picked up a very depleted and demoralised health visitor work force. We have 26 health visitor early-implement sites and, as I said, a 200% increase in planned training commissions for health visitors. Turning this round takes a long time. I am sorry that we could not get started on it earlier, but this will have the critical impact: 4,200 health visitors by the end of this Parliament will give us the results that we need in turning round the fortunes of some of the most vulnerable families in this country.
Liz Kendall (Leicester West) (Lab)
Early intervention can transform health for children and young people and prevent bigger and more expensive problems down the line, yet the Government have cut funding for early intervention programmes, including Sure Start, teenage pregnancy and mental health in schools, by 11% this year and 7.5% next year. Is not the reality that it is this Government who are depleting and demoralising the health visitor work force, and that their short-sighted, short-term policies will make it harder to prevent poor health and cost us all more in the long run?
Anne Milton
The reality is that the Government are picking up a very depleted health visitor work force. School nurses, health visitors and the family nurse partnership are all critical. We picked up a very sorry state of affairs. The hon. Lady is right; early intervention matters, which is why we are doing it. I am just sorry that the previous Government did not take the action that was needed.
Margot James (Stourbridge) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Health (Mr Andrew Lansley)
My responsibility is to lead the NHS in delivering improved health outcomes in England, to lead a public health service that improves the health of the nation and reduces health inequalities, and to lead the reform of adult social care, which supports and protects vulnerable people.
Margot James
My right hon. Friend will be aware that a significant number of private clinics that fitted women with Poly Implant Prothese breast implants are no longer in business. Will he advise the House on how he plans to strengthen not just the regulation of clinics offering cosmetic surgery, but the products that they use?
Mr Lansley
I am grateful to my hon. Friend. I not only laid before the House a written statement this morning, but will, with permission, make a statement on the subject tomorrow. We have been very clear about the support the NHS will give to women who have had implants through the NHS, and we expect private companies to do the same. Not all will do so, and to that extent I make it clear that the NHS is there to support women in their clinical needs, whatever their circumstances.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The Secretary of State will be aware that thousands of women are worried and frightened about this issue. The statements he has made are welcome, but what practical help can he offer women whose private providers have not yet committed to offering free replacements?
Mr Lansley
This is important, as the hon. Lady says. All the way through we have wanted to be absolutely clear that any woman who is worried should be able to go to her general practitioner. The NHS is there to support any women in their clinical needs, whatever their circumstances. I have made it clear that I expect private providers to match the NHS support through information and access to specialist advice, imaging and investigation, as necessary, and through the removal of implants if it is decided that that is necessary. If private providers will not do that, let me be clear, as I will explain further tomorrow, that the NHS remains available to support women in their clinical needs.
Karl MᶜCartney (Lincoln) (Con)
T5. Does my hon. Friend the Minister believe that the Government’s aim of stopping people smoking is in any way helped by the chairman of the all-party group on smoking and health, the hon. Member for Bristol West (Stephen Williams), using a private letter that I sent to him, and copied to the Minister, to castigate me and make untrue allegations in my local newspaper last Thursday?
Mr Speaker
Order. I was doing my best to listen attentively—it is very difficult to hear clearly when there is so much noise. If there is to be a reference to another right hon. or hon. Member, advance notice of it should be provided. These courtesies must be observed. They are there for a good reason.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I remind my hon. Friend that smoking kills over 80,000 people a year in the UK. We have published our tobacco control plan, are implementing the display ban and hope to consult soon on the future of plain packaging. The important thing to remember about improving public health is that it is not a party political issue. I cannot comment on the specifics of the case he mentions, but this is a matter that interests everyone across the House.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T2. The people of Newcastle are more likely to die early from cancer, health disease and stroke. On average, a child born in Newcastle today is expected to die five years before a child born in the Secretary of State’s constituency, so why is he changing the health funding formula so that in Newcastle we will lose 2.5% of our funding, whereas his constituency will see a rise of 2.1%?
Mr Lansley
Let me remind the hon. Lady—she might not have noticed this—that before the Christmas recess I announced funding for the next financial year for all primary care trusts in England, and the increase for all primary care trusts is 2.8%. In contrast to the previous Government, we are setting out to reduce health inequalities, not least by focusing resources on public health on the basis of an objective measurement of disparities in health outcomes.
Robert Halfon (Harlow) (Con)
A BBC Essex investigation into Rushcliffe’s Partridge care home in my constituency has uncovered shocking allegations of abuse and neglect. Will the Minister urge the Care Quality Commission to step in now with an inquiry and take whatever legal action is necessary to protect the elderly residents? Will he meet me and my constituent Lesley Minchin who has a relative who has suffered as a result of what has been going on in the care home?
The Minister of State, Department of Health (Paul Burstow)
I certainly share my hon. Friend’s concerns. BBC Essex’s reports of abuse and degrading treatment in that care home are cause for concern. The CQC is due to publish a report shortly and I am certainly happy to meet my hon. Friend to discuss the matter further. The Government are determined to shine a light on abuse wherever it is found and to root it out of the system to ensure that people are treated with dignity and respect and get the care they need.
Alex Cunningham (Stockton North) (Lab)
T3. Does the Health Secretary agree with the Prime Minister that our nurses need greater supervision by patients’ groups on the ward to ensure that they are doing their jobs correctly, or does he recognise the tremendous job that they and their professional clinical managers are doing despite the huge cuts that the Health Secretary has forced on their numbers?
Mr Lansley
I do indeed agree with the Prime Minister, but I would not characterise what he said in the way that the hon. Gentleman does. I was very interested to see a number of letters in The Times just this morning that highlighted that in the past, under patient and public involvement forums and community health councils, there was a direct public interest in seeing what happened in hospitals and in inspection. Through the Health and Social Care Bill and the establishment of HealthWatch, we will enable the public—representatives of patients—to be involved directly in assessing the quality of the environment in which patients are looked after. They will not supervise nurses. Nurses will be responsible for the experience and care of patients, but the public have a right to be participants in inspection—
Andrew George (St Ives) (LD)
When the Government introduced the Health and Social Care Bill a year ago, they did so with the claim that the NHS fails in comparison with its European counterparts with regard to patient outcomes. Now we know that that is not the case, will the Government withdraw the Bill?
Mr Lansley
I do not agree with that characterisation of why we instituted the Health and Social Care Bill or of the current situation. For example, the OECD published in October its latest assessment of health in a number of countries. In too many respects—for example, in relation to serious respiratory disease—we have very poor outcomes relative to other countries. What we are setting out to do in any case is to deliver continuously improving outcomes and to get among the best in the world. In too many respects we are not yet among the best in the world.
Karl Turner (Kingston upon Hull East) (Lab)
T4. If the Prime Minister really wants to help nurses to focus on patient care, should the Secretary of State not listen to those nurses and drop this barmy, unnecessary Health and Social Care Bill?
Mr Lansley
It is precisely because the Prime Minister and I listen to nurses that we met them and made it clear that we will support best practice. The hon. Gentleman and his colleagues should support nurse leadership on the wards. Nurses can see—through best practice, if they talk to patients about their experience every hour—that they can deliver better care. We will support nurses to deliver better care; he should support us in doing so.
Dr Sarah Wollaston (Totnes) (Con)
I know the Secretary of State cares deeply about outcomes in health. Will he add his support to the campaign for a minimum price for alcohol in England and Wales?
Mr Lansley
The Government will shortly publish our alcohol strategy, which will set out how we hope to deliver continuing success in the reduction of alcohol consumption and abuse.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
T6. In a written answer on 12 December, the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), who has responsibility for care services, told me that the Government felt that:“Local community hospitals provide a vital community resource to support patients in need of rehabilitation, recuperation and respite care”—[Official Report, 12 December 2011; Vol. 537, c. 560W.]What steps will the Government take to prevent the closure of the Chaloner Ward at Guisborough hospital and financially secure that hospital’s vital future?
Mr Lansley
I am grateful for that question. I will certainly be happy to write to the hon. Gentleman on Guisborough hospital—I will not delay the House with the detail. I have those details, and will be happy to correspond with him.
Andrew Bridgen (North West Leicestershire) (Con)
The Prime Minister speaks of the “health and safety monster”; does the Minister believe it is right that advertising for personal injury lawyers should be displayed in hospital A and E departments, which many might think would feed the monster and make it bigger?
The Minister of State, Department of Health (Mr Simon Burns)
I am very grateful to my hon. Friend for raising that, because it is an important issue. As he might be aware, there are rules and regulations: it is not acceptable for that sort of advertising in NHS hospitals. I would hope that any trusts behaving in that way immediately review their procedures.
Jim McGovern (Dundee West) (Lab)
T8. Yesterday, I had a meeting with Patricia Osborne, the chief executive of the Brittle Bone Society, a UK-wide organisation that is headquartered in my constituency. It was made clear to me that given the current funding squeeze across the voluntary sector, the society is concerned about its ability to provide the vital services that it currently provides. Also troubling the society is the lack of support for adult sufferers of osteogenesis imperfecta. What can the Secretary of State tell me about the Government continuing to support that important society, and what more can they do to support adults with that condition?
Mr Lansley
The hon. Gentleman will know that the Department of Health continues to support the voluntary sector considerably through section 64 funding and related support. If he wishes to write to me about the specific circumstances of the Brittle Bone Society, I will be glad to reply to him.
Chris Skidmore (Kingswood) (Con)
I recently made a freedom of information request to all 170 acute trusts asking for the estimated total cost of missed out-patient and surgery appointments. So far, 61 have come back to me, and the cost is already over £1 billion. Will the Secretary of State seriously consider what we can do to tackle the enormous cost of missed appointments in the NHS?
Mr Lansley
Yes. My hon. Friend makes an important point, and it is something the NHS must focus on. There are considerable opportunities through new technologies substantially to reduce the extent of missed appointments, including through things such as text messaging. What is frustrating is that, sometimes, appointments are missed because patients have not been adequately contacted by hospitals. As for people who abuse the NHS, I hope we will give them no excuses for not meeting their obligation to attend appointments.
Mike Gapes (Ilford South) (Lab/Co-op)
Can the Secretary of State intervene with those involved with the health for outer north-east London programme to get them to allow the Barking, Havering and Redbridge University Hospitals NHS Trust to use the births and maternity capacity at King George hospital to take pressure off Queen’s?
Mr Lansley
As the hon. Gentleman knows, following the independent reconfiguration panel report, which I accepted in full, the Barking, Havering and Redbridge Trust is looking to manage safely its maternity services, while improving the quality at Queen’s. It is doing that in close co-operation with NHS London and, indeed, with the advice of the Care Quality Commission, following the commission’s inspections. I will continue to be closely involved in that, and we will continue to support the Barking, Havering and Redbridge Trust in improving services for the hon. Gentleman’s constituents and others.
Mr Philip Hollobone (Kettering) (Con)
In north Northamptonshire in 2010-11, there were 6,164 alcohol-related hospital admissions. That is four times the number just eight years before. What more can be done to tackle this horrendous increase in booze drinking?
Mr Lansley
Time does not permit me to mention all the things that could be achieved, but let me just say that we are clear about the need, for example, to tackle below-cost selling of alcohol, and we are doing that; to stimulate more community alcohol partnerships, and we are doing that; and to accelerate public understanding of the consequences of alcohol abuse, and we are doing that, not least through Change4Life, additionally, during this year. There is more, but we will say much more in our alcohol strategy soon.
Hazel Blears (Salford and Eccles) (Lab)
When the Secretary of State, together with the Prime Minister, visited Salford Royal hospital last week to praise the nurse leadership, was he aware that the hospital has cut 200 posts this year and is about to cut a further 200 posts over the next two years as a result of having to take 15% out of its budget? Does he not agree that nurse leadership is important, but that we also need the nurses on the wards to be able to deliver effective patient care?
Mr Lansley
Of course I had an opportunity to talk to the chief executive, the nursing director and others at Salford Royal, and I was tremendously impressed, as was the Prime Minister, by the quality and leadership of the nursing, which demonstrated what he was saying about nursing—that there is best practice inside the NHS, and we need to spread it. The right hon. Lady is confusing a cost-improvement programme with a cut. I think Members on both sides of the House understand that the NHS is having to make efficiency savings, which involves shifting some resources from the acute sector and hospitals into the community. Right across the NHS, we have an increase of over £3 billion this year; next year, we have a 2.5% or 2.8% increase everywhere.
High-speed Rail
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Justine Greening)
This morning, I made a written statement to the House announcing my decision to give the go-ahead to High Speed 2—a national high-speed rail network. With the exception of High Speed 1—a 68-mile stretch of line—it will be the first major national railway line to be built in Britain since the Grand Central line opened to passengers in 1899. I would like to provide Members with further detail of the substance of, and rationale for, my decisions.
I weighed up the evidence after one of the largest public consultations in our history. We wrote to more than 172,000 people living or working near the proposed line from London to the west midlands, visited communities along the 140-mile route and held 41 days of roadshows attended by almost 30,000 people over the five-month consultation period. Almost 55,000 responses were received from individuals, businesses and organisations across the country representing a wide spectrum of views. Many of those views were expressed strongly both in favour of and against high-speed rail, and I have considered them carefully in making my decisions.
Since becoming Secretary of State for Transport, I have examined all the available evidence, including the work undertaken by my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) and by the previous Labour Administration in developing the consultation proposals, the evidence submitted during the consultation, and the further work undertaken by my Department and HS2 Ltd. My decision had to consider not only the full environmental impact of HS2 but its benefits to our economy, jobs and our competitiveness not just today but decades into the future.
I also had to be clear about the implications of not investing in high-speed rail—about how it would affect our leading cities, and how that would affect the road network and aviation. Generating growth, helping people back to work and supporting Britain’s companies and wealth creators so that they can compete and win in the global marketplace are at the top of the Government’s priority list, and, from day one in office, the coalition has had a laser focus on investing in and modernising our country’s transport infrastructure with unprecedented levels of investment.
When it came to HS2, I could have made the easy choice: I could have gone for the short-term option, relying on a patch-and-mend approach and leaving our rail networks overstretched, overburdened and less resilient. But let us be clear: the price for that would have been paid in lost business, lower growth, fewer jobs and more misery for passengers on a network without the capacity to cope. We would have failed future generations depending on us to create the prosperous country that they will want to live in.
Good government is about acting in the long-term national interest and about taking decisions, however difficult, to improve people’s quality of life and the country’s economic prospects not just for the next four or five years but for the next four or five decades. Our Victorian predecessors would have been immensely proud to see their railways providing massive benefit today —more than 100 years later—but as a result of today’s announcement the railway revolution that they started is happening again. We are ready for a new chapter in Britain’s transport history—one designed to boost our economy and our country just as the first coming of the railways or the motorways did for previous generations.
That is why I have given the green light to HS2. In spite of the challenges of rising demand, our railways have been a huge success since privatisation. Passenger demand is growing year on year, particularly in the inter-city market. I recognise, however, that further rounds of upgrades to our major north-south lines, even if they offer apparently good value for money, can only provide a short-term fix—one that is incapable of meeting the long-term challenge. In truth, they could add only limited further capacity; they could not offer the step change in performance that passengers wish and need to see.
What is more, upgrades would consign rail passengers and the vitally important rail freight industry to years, if not decades, of future engineering disruption, delay and unreliability—something that users of the west coast main line will remember only too well. The question, therefore, is not, “Do we build new lines?” but, “What type of line should we build?” And when we weigh up the economic and social rewards, there is only one answer: high-speed rail. A high-speed line will deliver £6.2 billion more in benefits to the country than a line running at conventional speeds, at an extra cost of only £1.4 billion. Therefore, by slashing journey times, as well as providing the step change in rail capacity that we need to keep the country moving, a high-speed line will give a return on the additional investment of more than four to one. A modern, reliable and fast service between our major cities and international gateways, as befitting the 21st century, will transform the way we travel, and promote Britain’s economic and social prosperity.
HS2 will be built in two phases, to ensure delivery of its benefits at the earliest possible opportunity. Phase 1 will link London to the west midlands, as well as delivering a direct connection to the continent through the channel tunnel via High Speed 1. Even in the first phase, cities and towns off the HS2 network—such as Stockport, Warrington, Liverpool, Preston and Glasgow—will be served by trains able to use both HS2 and inter-city lines, saving over half an hour on journeys to London. Phase 2 will provide onward legs to Manchester and Leeds, with intermediate stations in the east midlands and South Yorkshire, plus a direct connection to our international hub, Heathrow airport. HS2 will also mean substantial time savings between Britain’s cities, reducing Birmingham-to-Leeds journeys from two hours to just 57 minutes, and Manchester-to-London journeys from two hours eight minutes to only one hour eight minutes. Edinburgh and Glasgow will benefit from a three-and-a-half hour journey time from London, encouraging modal shift from short-haul flights to high-speed rail.
In delivering HS2, I look forward to working with the Scottish Government and others to identify and evaluate options for developing the high-speed network and further reducing journey times. However, I want to emphasise to the House that in making my decisions, I have been particularly mindful of our responsibility to safeguard the countryside and its wildlife, and to protect local communities as far as possible. I have worked hard to look at more tunnelling, to lower the route into cutting to reduce visibility, and to move the route away from homes wherever viable. I have looked hard at how we can better protect our landscape, our wildlife and our heritage. For that reason, my engineers have carefully re-examined the route in the light of all the evidence. I can therefore announce a package of alterations that I believe will significantly reduce the railway’s impact.
Those improvements include a longer, continuous tunnel under the Chilterns from Little Missenden to the M25, and a new 2.75-mile bored tunnel along the Northolt corridor to avoid major works to the Chiltern line and impacts on local communities in the Ruislip area. Of the 13 miles through the Chilterns area of outstanding natural beauty, less than 2 miles will be at or above the surface. The rest will be in deep cutting or tunnel. There will also be a longer green tunnel past Chipping Warden and Aston le Walls, and another longer green tunnel to reduce impacts around Wendover, as well as an extension to the green tunnel at South Heath. There will also be a green tunnel past Greatworth. Those are just a few examples from the suite of improvements detailed in full in the Command Paper that I presented to the House this morning.
The changes will bring significant benefits to communities and the environment. Compared with the consultation route, there will be a more than 50% increase in tunnel or green tunnel, now totalling around 22.5 miles. In addition, around 56.5 miles will be partially or totally hidden in cutting, as a key way of helping to reduce noise in neighbouring communities, and 10 miles less track along viaduct or embankment. In all, that means that around 79 miles—more than half the route—will be mitigated by tunnel or cutting. The revised tunnel alignment through the Chilterns will avoid an important water aquifier—[Hon. Members: “Aquifer.”]—aquifer—significantly reducing impacts on water. You see, Mr Speaker, I am always happy to listen to people when they see a better way of doing things.
There will also be a reduction in the impacts on ancient woodlands and heritage sites. Communities affected will benefit from the changes, with a near 50 % reduction in the number of dwellings at risk of land take, and the number of households experiencing noticeably increased noise levels reducing by a third, to just over 3,000 properties.
I have always been clear in my mind, however, that, whatever the mitigation measures, there can be little comfort to someone in knowing that the country will benefit enormously from HS2 when it is their house, or their business, that has to be knocked down to make way for it. The meeting that I had with MPs earlier last year allowed many of those representing communities along the proposed route to communicate the views of their constituents to me directly.
So, to help people, we will bring in a package of compensation measures over and above those that affected homeowners are already entitled to under law. These include: a streamlined purchase scheme to simplify the statutory blight process for property owners; a sale and rent back scheme to give homeowners within the safeguarded area more flexibility; a streamlined small claims scheme for any construction damage; and a package of measures to reinforce confidence in properties above tunnels.
Homeowners will be offered before and after surveys, a thorough assessment of the impact of similar tunnels, an explanation of the measures that will be taken to prevent perceptible vibration impacts, financial compensation for the compulsory purchase of subsoil, and a legally binding promise that HS2 will be permanently responsible for resolving any related settlement or subsidence issues. There will be also be a refreshed hardship-based property purchase scheme, and, finally, we will work constructively, and in a structured way, with local authorities along the line of route to minimise the negative consequences of HS2 and maximise the benefits.
Having made the decision to press on with HS2, my intention is to drive it forward as fast as is practicable, so that we can gain from its benefits as early as possible and end the unwelcome uncertainty for those affected. A key part of this will be to engage fully and actively with organisations, communities and individuals along the whole route of the Y network. People presented legitimate concerns in the consultation and, even though we have made significant improvements, I am keen to work hard with local communities so that as many concerns as possible are properly addressed.
I have instructed HS2 Ltd to undertake a range of activities to prepare for and deliver both phases of the network. It is my intention to introduce a hybrid Bill in the House by the end of 2013, including a detailed environmental impact assessment to provide the necessary powers to construct and operate the line from London to Birmingham. I have instructed HS2 Ltd to deliver this project at pace, but within milestones that will stand the test of time and with regular reporting to me on progress. The Major Projects Authority, which this Government launched last March to improve the performance of major Government projects in delivering on time and in budget, will provide critical support and oversight.
This spring, we will consult on the draft directions for safeguarding the proposed route from London to the west midlands, as well as separately consulting on detailed compensation proposals. I aim to bring final safeguarding directions and an agreed compensation policy into effect later in the year. In March this year, HS2 Ltd will advise me on the route and station options to Manchester and Leeds, and in autumn 2012, we will start an engagement programme on a preferred route to discuss local views.
I warmly welcome the political consensus on HS2, on the basis that it will help to ensure that the planning and construction of this transformational scheme are carried through to completion. HS2 matters to the long-term success and prosperity of the whole of Britain. It will help to create jobs, support growth and regenerate our regions. It will better connect communities and improve people’s opportunities, and, with its potential to attract people and freight on to trains and away from long-distance road journeys and short-haul flying, combined with the increasing decarbonisation of the grid, HS2 will be an important part of transport’s low-carbon future.
Britain has faced such challenges before. The Victorian railway pioneers had the vision to build a rail network that has promoted growth and created jobs for more than a century. Those innovators transformed this country’s fortunes. Our industries flourished, our exports multiplied, and our economy grew wealthy. Half a century later, another generation had the vision to start building the motorway network. Post-war planners developed the motorway network, connecting major cities and transforming the capacity of our road network. Half a century on again, we now need to do for our Victorian railway what previous generations did for our road network. The time has come again to seize the moment, to be ambitious and to show the world that this is a can-do country. The lesson from history—and the lessons from our global competitors—is that no matter how hard times are, we cannot stop planning for the future or investing in our infrastructure if we want Britain to flourish. HS2 will be the backbone of a new transport system for the 21st century, offering the vital capacity that we need to compete and grow as a country. It will transform the economic shape and balance of our country, linking our major cities to a level previous generations could only dream of. By backing HS2, this Government are backing Britain, and I commend this statement to the House.
Mr Speaker
Order. I thank the Secretary of State for her statement, which was nevertheless significantly in excess of the allotted time for ministerial statements. An allowance for that will be made in the response from the shadow Secretary of State. The House can rest assured, as it can always rest assured, that I have the interests of Back Benchers at heart. They need not worry; if they want to get in, they will be heard.
Maria Eagle (Garston and Halewood) (Lab)
May I begin by thanking the Secretary of State for advance sight of her statement? I welcome her decision today. As the right hon. Lady was generous enough to say, it was the previous Labour Government who started us on the journey that has now reached this important milestone. I pay tribute to the former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), for having the boldness to set out a vision for a new high-speed rail line to address the capacity issues on our existing mainlines while cutting journey times across Britain. This is a vital project for the country, and I welcome the decision to give the green light to this investment in the face of considerable opposition—not least from many of the Secretary of State’s own colleagues, including from inside the Cabinet.
Labour Members believe that it is vital that the new high-speed line is built—not just between London and Birmingham, but on to Manchester and Leeds. So while I welcome the commitment given today to the whole HS2 scheme, there will be disappointment that the Government’s announcement has stopped short of committing to legislating for the entire route to Manchester and Leeds in this Parliament. That was always Labour’s intention, as confirmed by the former Transport Secretary Lord Adonis in his evidence to the Transport Select Committee—a position the Select Committee said had merit.
Of course it is right that a single Bill would need to await completion of preparatory work for the second phase of the route. However, by introducing it later in this Parliament and carrying it over to the next, as we did with the legislation for Crossrail, we would secure Parliament’s approval for the whole route at an earlier date than under the Government’s plans. That would, of course, open up the possibility, if it proved feasible, of beginning construction in the north as well as the south—something that the Transport Select Committee urged the Government to consider. The Secretary of State should do so and the Government should think again on the issue of using a single piece of legislation to make HS2 possible all the way to the top of the Y route. At the very least, will the Secretary of State agree, as a minimum, to follow the Transport Select Committee’s recommendation to include a “purpose clause” in the hybrid Bill that she plans, providing statutory force to the commitment to continue the scheme to Manchester and Leeds?
Turning to other issues in the statement, the Secretary of State says that there will be “direct links to Heathrow airport and the continent via the HS1 line”. There will be disappointment that the Government have not accepted the case—not least in her own team—to build a transport hub at Heathrow, enabling a direct connection between the airport, HS2, Crossrail and the Great Western mainline at one site. The Minister of State, Department for Transport, the right hon. Member for Chipping Barnet (Mrs Villiers) is on record as saying that
“failing to take high speed rail through Heathrow…would be a big mistake”.
This is a failure to learn the lessons of successful high-speed rail schemes across the world. When the Government claim this route would cost more, they fail to include the cost of building the spur; and when the Government claim it would increase journey times, they fail to make clear that this hub would be instead of Old Oak Common and would allow for non-stopping services.
Can the Secretary of State confirm the cost of building the separate spur to Heathrow? Can she confirm that the Government’s intention is to enable at least the possibility of direct services between Heathrow and the continent at the end of phase 2? Can the right hon. Lady tell the House what discussions she has had with the European Commission over the potential for EU funding towards the costs of HS2? Is it correct that the decision not to take the route via Heathrow and the concerns over the planned link to HSl mean that such support is less likely to be forthcoming?
In respect of Scotland, the Secretary of State has said that HS2
“will form a foundation for a potentially wider high speed network in years to come.”
Can she confirm that the Government still intend to begin discussions with the Scottish Government on the future development of the network to Scotland during the next Parliament? When do they expect to start work on the business case for further extensions beyond the Y?
As for what the Secretary of State said about mitigation and costs, I welcome the steps that she has taken to address some of the concerns that led the Labour party to propose its alternative route, although none of these measures addresses the impact on the Chilterns as effectively as would a route via Heathrow. It is the Government’s own stubbornness that has forced them to commit themselves to significant additional spending to prevent a Cabinet resignation.
Will the Secretary of State tell us what the extra cost of each of the new mitigation proposals that she has announced today will be, and whether those costs will be met within the existing cost envelope for HS2? What assessment of value for money has she made in respect of the costs of these measures, compared with those of offering greater protection to the Chilterns through a different alignment? I welcome the mitigation measures proposed for London, although there remains a significant impact on the area around Euston station. Will the Secretary of State assure the local community in Camden that she will listen to their concerns, and will take appropriate steps to mitigate the impact of the redevelopment of Euston station? What discussions has she had with Transport for London on how best to address the concerns that have been raised about the impact of the very large increase in the numbers arriving at Euston on HS2?
There has been considerable debate about the affordability of building the line, but not about the affordability of using it once it opens. I note that the Secretary of State had nothing to say about that in her statement. Does she agree with us that now is the time to move the debate from whether we should build to discussing the type of high-speed rail network that we want to see in this country? Her predecessor as Secretary of State—I am pleased to see that he is present—told the Transport Committee:
“If you are working in a factory in Manchester you might never get on HS2, but you will certainly be benefiting from it if the salesman and sales director of your company is routinely hopping on it to go and meet customers, to jet around the world from Heathrow in a way that brings in orders that keep you employed.”
Is that not precisely the wrong approach to high-speed rail? Does the Secretary of State agree that we need a high-speed rail network that is affordable for the many and not the few—a network that is not a “rich man’s toy” or simply a business class service?
Today we have reached an important stage in the development of high-speed rail in this country, a process begun by Labour. I hope that the Secretary of State will consider the issues that we have raised. This is a major scheme which deserves proper scrutiny. We have raised questions with the clear intention of ensuring that we have the best possible high-speed rail network, one that the country needs and deserves. We strongly support the building of HS2. [Hon. Members: “Hurray!”] I said that in the first sentence of my reply. I look forward to working on a cross-party basis with the Secretary of State and her colleagues to ensure that parliamentary approval is secured, and that this vital project can move ahead and become a reality.
Justine Greening
I am delighted to hear that the Labour party supports our high-speed rail proposals. As I think even Labour Members would have to admit, the original proposal did indeed come from my party. I must point out that high-speed rail did not feature in the Labour Government’s 2007 White Paper setting out the 30-year vision for the railways. However, we are pleased that Labour has belatedly seen the real potential of a high-speed rail network in Britain.
The hon. Member for Garston and Halewood (Maria Eagle) asked about legislation for the full Y network. I am considering whether it is possible for us to build that into the hybrid Bill, but I can give a categorical assurance that I have decided that we should go ahead with the full Y network. I have also announced today the final decision on the route of phase 1 of that network.
The hon. Lady asked about Heathrow, which has clearly been an important aspect of the issue. HS2 will go directly to Heathrow. That will happen as part of phase 2. People will be able to get on a high-speed train in Birmingham that goes direct to Heathrow. The hon. Lady raised the question of whether HS2 should go directly via Heathrow. The last Labour Transport Secretary of State, Lord Adonis, looked at that, and he concluded— as did I and my predecessor, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) —that that is not the most cost-effective or line-effective route for the line to take. It would be a longer line, and it would be more expensive.
The hon. Lady asked whether we will seek EU funding. The business case we have presented to the House today is based on a working assumption that the £32 billion cost of this railway will come from the rail budget—that it will be taxpayer-funded. The business case would improve if we were able to get private sector and EU funding. We believe that this is a high-value project and we will look to see whether we can secure such contributions, especially from the private sector, and they would make that business case even stronger than it already is.
I am keen to talk with the Scottish Government about their aspirations for high-speed rail further north. Their desire to see this project go ahead underlines its strategic value to the entire UK, not just the London-to-Birmingham part of our country.
On mitigation, the hon. Lady raised the important question of how we tackled the issue of the line going through an area of outstanding natural beauty in the Chilterns. I want to emphasise that I looked very hard along the entire line. I understood the specific concerns people had in respect of this AONB, and I took them very seriously, but I looked at the whole line to see how we could mitigate its impact on local communities wherever possible, because that is important and the right thing to do. The changes in the Chilterns that we have made will result in that stretch of the line costing in the region of £250 million to £300 million less, because the engineering solutions we have found will involve less use of deep cutting. That will mean that we have less spoil, and the removal of spoil is often what causes huge expense. I hope that provides some reassurance to the hon. Lady. For some parts of this route, improving the line is good not only for local communities but for the business case for the line.
The hon. Lady also raised the question of the redevelopment of Euston station that will happen as part of HS2’s phase 1 proposal. We believe the line coming into Euston can be part and parcel of the regeneration of the Euston area. We must ensure that Euston makes the most of the investment that will go into Euston station. I fully understand that two-thirds of the homes that will be demolished will be next to Euston station, and we will work very closely with Camden council. A number of statutory processes are already in place to provide safeguards for tenants who will be affected, but I can assure the House that I will work very closely with Camden council in considering how we can minimise the impact of the redevelopment of Euston station on current residents. I will, of course, also be delighted to work with the Mayor in considering traffic flows on the tube and how high-speed rail will interact with our tube network.
The hon. Lady asked about affordability and pricing, and I agree that that is very important. The business case we have done assumes a pricing level that is the same as the standard pricing on the current network. That has been the presumption. As we get closer to the finalisation of the route and its development, I am sure we will look at the pricing, but I can assure the hon. Lady that the success of this high-speed railway network will be based on its being used by many people, not a few. I have no doubt that the pricing of the tickets will be set in order to achieve that.
Mr Speaker
Order. Given the intense interest, I appeal for brevity, led by one of its exemplars, Mr John Redwood.
Mr John Redwood (Wokingham) (Con)
Will the Secretary of State tell us how much the Government propose to spend on the project during this Parliament, and will she confirm that no construction contracts will be let during this Parliament?
Justine Greening
No construction contracts will be let during this Parliament, and my understanding is that the spend over the course of this Parliament will be in the region of a couple of hundred million pounds.
Mr Bob Ainsworth (Coventry North East) (Lab)
As the city closest to the first non-London station, the potential investment benefits to Coventry are considerable. Is the Secretary of State prepared to meet a delegation to discuss the links between the city and that first station, so that Coventry maximises the benefits from HS2?
Dr Julian Huppert (Cambridge) (LD)
The Liberal Democrats were the first party to push for high-speed rail, back in 2004—[Interruption.] I realise that the Opposition may not appreciate the fact. I am delighted that the coalition is going ahead with this, and I congratulate the Transport Secretary on that decision. Phases 1 and 2 will bring great benefits, and the news about phase 2 going to Manchester and Leeds is very welcome. Can she say something about her future aspirations for the connection through to Scotland?
Justine Greening
As I said, we are very keen to ensure that we progress phases 1 and 2 as quickly as possible, and I will be in discussions with the Scottish Government about the future development of the line that they have aspirations for, as well.
Frank Dobson (Holborn and St Pancras) (Lab)
I am sorry, Mr Speaker, if I break into this aura of unanimity. I represent people living around Euston, 350 of whom will lose their homes, and up to now they have received no guarantees whatever from Ministers, the Department or the HS2 project team. The area has already seen the abandonment of the intended rebuilding of a Roman Catholic convent school, part of the site of which will be taken, and a large number of small businesses will be put out of business as a result of this. Also, Euston will be even more overcrowded when the new line comes in, and there are no proposals whatever to improve the connections, by tube or bus, to Euston station to take the extra traffic.
Justine Greening
The right hon. Gentleman raises the wider point that we will need a broad-based strategy if HS2 is to come into Euston—the broader regeneration of Euston that I believe can take place alongside HS2 and the redevelopment of Euston station. I am absolutely committed to doing whatever I can: to work with Camden council, and to meet the right hon. Gentleman separately to talk about what we can do to minimise the disruption to local residents while HS2 is being built and in the years beforehand. There are statutory processes that I am very happy to talk through with him in detail, and I look forward to doing that.
Andrea Leadsom (South Northamptonshire) (Con)
My right hon. Friend has been very patient in hearing from me many times about the concerns of my constituents, many of whose communities will be blighted by this high-speed rail line. She is also well aware of my concerns about the economics of the project. How sure is she that the actual costs in their entirety will be kept to the amounts we have been talking about, and how realistic is it for Britain to afford this project at this very difficult time economically?
Justine Greening
I would argue that we cannot afford not to do this. The cost to the taxpayer will start once Crossrail has finished. On the overall costs, High Speed 1 was brought in on time and to budget, and our costing includes a substantial allowance for so-called optimism bias, because we know that such projects tend to grow in cost. If anything, I would aim to bring it in under the amount we have budgeted for, but we have allowed for some optimism bias, as we do for these projects.
Glenda Jackson (Hampstead and Kilburn) (Lab)
While thanking the right hon. Lady for switching on the green light, I note that she referred in her statement to “a package of measures to reinforce confidence in properties above tunnels”. That issue affects many of my constituents. When and to whom should my constituents make representations to have their concerns calmed?
Justine Greening
I will be writing today to all the people affected directly by HS2, and that will include making sure that people in areas that will have tunnels underneath them will receive all the details they need to understand how this process will work.
Kwasi Kwarteng (Spelthorne) (Con)
Will my right hon. Friend say a few words about the massive capacity that is going to be added to freight lines, so that we can encourage greater use of the railway in transporting freight around the country?
Justine Greening
One of the things we have seen in recent years is freight switching from road to rail. HS2 will have the advantage of freeing up the capacity on the conventional railway network, which will see that renaissance continue. We hope that it will have even more force behind it than it has had already.
Richard Burden (Birmingham, Northfield) (Lab)
Today’s announcement is very good news for Birmingham. May I say to the right hon. Lady that two things are just as important as our connectivity to London? The first is connectivity to the north, so I ask her to act on the optimistic noises she has made about possibly changing the hybrid Bill to include the second phase. The second is to ensure, as my right hon. Friend the Member for Coventry North East (Mr Ainsworth) said, that HS2 unlocks potential in the local transport network in and around Birmingham and the wider west midlands. Will she take that on board? Those are the things that will really maximise the benefits of HS2 to the midlands.
Justine Greening
I will take both those things on board, and indeed I will be in Birmingham tomorrow. When we look at high-speed rail in other countries, we see that the countries that have had the most success with it are those that have looked at projects more broadly, so we must ensure that HS2 provides broader connectivity than just to the areas it drops in at.
Mark Field (Cities of London and Westminster) (Con)
It is fair to recognise that the right hon. Member for Holborn and St Pancras (Frank Dobson) makes a valid point about Euston station and the rail capacity of that particular area. Has the Secretary of State given any particular thought to the idea that there should be a nodal link at Old Oak Common, which would link up Crossrail and HS2, thereby ensuring that a large amount of the traffic that would otherwise get caught up in Euston is enabled to go through central London via a different route?
Justine Greening
I think that is such a good idea, which is precisely why it is part of the plan.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is essential that the UK has a high-speed rail network, and I welcome today’s statement as it helps to achieve that. The Secretary of State said that she was considering how to include in the hybrid Bill a commitment to the whole of the Y network. Will she tell us more about that? Will she assure us that the money that goes to funding the very important high-speed rail network will not be at the expense of essential investment in the existing classic line to develop both passenger and freight services?
Justine Greening
I am actively examining how we can provide more legal assurance in relation to the full Y network. However, we ultimately have to recognise that if this high-speed rail line is going to happen, it will need political will above all else. What I am saying is that the Government have the political will to go ahead with this Y network and that is the thing that matters most. I can assure the hon. Lady that I intend to make sure that we continue to see that level of investment that our current railways so badly need.
Steve Baker (Wycombe) (Con)
I was delighted to hear that additional protections for the Chilterns will reduce costs. Will the Secretary of State consider tunnelling the entire width of the Chilterns?
Justine Greening
Yes, I did that. That approach would have cost £1.2 billion and I believe it is unaffordable.
John McDonnell (Hayes and Harlington) (Lab)
Because the Heathrow link will be in phase 2 of the project, my constituents will not know their futures until late 2014. Will the Secretary of State ensure that HS2 Ltd opens up its books and shares the information about the range of options it is considering for the link at the earliest stage?
Justine Greening
One of the things that we have always tried to balance is getting assurance about what our lead proposals are so as not to cause unnecessary blight and trying to share information with residents as soon as possible. I believe that we will be able to start informally consulting local groups later this year and in 2013. We will do the formal consultation—the sort that the hon. Gentleman has seen on the first phase of this route—in 2014.
Stephen Hammond (Wimbledon) (Con)
I commend my right hon. Friend on her statement. Will she assure me that she was aware that the chief executive of Manchester city council said last week that this was a most significant decision for the north of England’s economy? Will she confirm that she still expects the monetised value of the scheme overall to be in the order of £50 billion?
Justine Greening
I can confirm that when we look at the key people pushing for this scheme, we notice that the key economies and great cities in the north will see the benefits. The monetised total value is upwards of £40 billion, even £50 billion. Ultimately, however, we must recognise that that calculation takes place over a 60-year time frame. Anybody building the railways back in Victorian times would never have counted the benefit we get from them today, which is very real, and the potential benefit of HS2 is significant.
Mr Dave Watts (St Helens North) (Lab)
Does the Secretary of State really think that people will believe the costings she has set out, given the past history of building railways and Government schemes? Will she give an assurance that the route will be extended to the north-west as, frankly, most people believe that they have more chance of travelling in the Tardis than on HS2?
Justine Greening
In terms of costs, there is safety in two things. High Speed 1 was delivered on time and on budget by the last Conservative Government. I aim to have a much better performance than we saw from the Labour Government on the west coast main line, where a £2 billion planned upgrade mushroomed to £9 billion. Finally, I can assure the hon. Gentleman that his constituents will see the benefit of phase 1 from day one. In many cases, the HS2 trains will be through-running trains that, having saved that time on the high-speed network, will continue their journey further north on conventional lines. I think that will benefit far more cities than just London and Birmingham.
Mark Pawsey (Rugby) (Con)
May I advise the Secretary of State that today’s announcement will be heard with concern in Rugby? We currently have an excellent service to London on the recently upgraded west coast main line, but we will be completely bypassed by High Speed 2. What steps will be taken to ensure that cities and towns on the legacy line will retain the speed and frequency of their existing rail links?
Justine Greening
High Speed 2 is critical for places such as Rugby, which have been so constrained by capacity on the conventional line. One of the benefits of HS2 is that it will free up capacity for better connectivity to places on existing lines, just like Rugby.
Alison Seabeck (Plymouth, Moor View) (Lab)
Warrington gets its journey cut by half an hour—lucky Warrington. Plymouth is a bigger city than Warrington and we have no high-speed link to the south-west. As regards the concern raised by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Chair of the Transport Committee, will the Secretary of State confirm that top-slicing will not happen to other budgets and that the south-west main line down to Penzance will still get further investment?
Justine Greening
We are about to continue the process on the high-level output specification, or HLOS2, and that will consider future investment in lines such as the great western line, which will be connected to HS2 via the Old Oak Common interchange. That will benefit the hon. Lady’s part of the country as well as everybody else’s.
Jo Swinson (East Dunbartonshire) (LD)
I welcome the Transport Secretary’s commitment to high-speed rail and the fact that she is keen to have discussions with the Scottish Government about extending the route to Glasgow and Edinburgh, which would bring additional economic benefits of some £25 billion and carbon reductions from more modal shift from air to rail. What does she see as the main barriers to making high-speed rail to and from Scotland a reality and how can we best overcome them?
Justine Greening
There are always barriers and challenges in dealing with such significant infrastructure problems, not least money and ensuring that finance is in place. As we have seen with phase 1, we must be incredibly careful that the route minimises the impact on local communities while maximising the economic impact that communities can get out of it. There is a long process to go through as regards talking with the Scottish Government, but I am keen to engage with them on it.
Graham Stringer (Blackley and Broughton) (Lab)
The Secretary of State’s statement will be welcomed throughout the whole of the north of England, as the chief executive of Manchester city council said, but there will be a worry in the back of some people’s minds that we were promised trains through to Paris when the channel tunnel legislation was agreed but we did not get them and that the same thing will happen again. It is not just a matter of political will. People in the north would be reassured if the Secretary of State gave a commitment to align stations and resources to build the routes to Manchester and Leeds as soon as possible.
Justine Greening
I can give the hon. Gentleman that commitment. I certainly am not going to take any longer than we need to take to progress the full Y network. One aspect of the first phase that I have not mentioned yet is that it will connect HS2 through to HS1, so there will be that link directly to the channel tunnel and the European high-speed rail network, which will be hugely beneficial.
Mrs Anne Main (St Albans) (Con)
I have serious concerns about this planned project, particularly regarding the business case. Will the Secretary of State comment on the comparisons that can be drawn with the high-speed rail links in Spain and France? In France, it was the major hub city of Paris that grew, rather than Lyon, and in Spain it was Seville that was caused expense as a price of the growth of Madrid city. There is concern in this country that the north might not get the projected benefit and that instead it might be London that grows and benefits.
Justine Greening
I have huge respect for my hon. Friend and I normally agree with her on most things, but I have looked at this case incredibly carefully. Let me say two things. First, cities such as Lyon and Lille have massively benefited from high-speed rail in France. Secondly, let us see what the north thinks. Manchester thinks this project is vital, Birmingham thinks this project is vital, Leeds thinks this project is vital and Sheffield thinks this project is vital. It is time to make it happen.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
The Secretary of State will get a very warm welcome in Birmingham tomorrow, but that welcome might be even warmer if she gave a clear commitment to a purpose clause in the hybrid Bill and if she could bring that Bill forward to 2012 rather than 2013.
Justine Greening
I do not think I can add anything further to my comments about my commitment to the Y network. In terms of the time it will take us to develop the hybrid Bill, we are doing it as fast as we can. I want to make sure that the Bill comes to the House in a proper and robust state, and that means doing a proper environmental impact statement and working with local communities, which will take some time. This is a big project and we are going to get on with it, but I will make sure that it has the time that all that will take. At the moment, it looks as though the Bill will come to the House in late 2013.
David Mowat (Warrington South) (Con)
With a benefit-cost ratio of over 2.5, HS2 is a much better business case than Crossrail, which has just been accelerated. Will the Secretary of State consider accelerating phase 2 of this scheme so that it can reach the north before 2032?
Justine Greening
I am looking at all the ways in which I can progress this project as fast as possible. At the moment, it looks as though the 2032-33 time frame is the fastest by which we can bring it to fruition. I hope that the House has seen today my desire to get on with this project and I will continually look at ways in which we can deliver it faster.
Mr Jim Cunningham (Coventry South) (Lab)
Can the Secretary of State say what impact the proposal will have on the frequency of services from Birmingham to Euston?
Justine Greening
I think we will see a huge improvement. Not only will more capacity be released on the conventional lines, but the high-speed line will serve those stations.
Dr Julian Lewis (New Forest East) (Con)
The previous Secretary of State for Transport is now running Defence, where we are implementing major cuts in each of the armed services. Does this Secretary of State understand why those of us who are concerned about other areas of Government wonder whether these priorities are not rather perverse in the present economic situation?
Justine Greening
I absolutely want to see the investment in our armed forces that we need for our country, but we also have to make sure that we look to the future for our transport system and the role that it plays in helping our economy to prosper, grow and create jobs. That is what today’s announcement is all about.
Hugh Bayley (York Central) (Lab)
The map that the Secretary of State published today shows the network continuing north of Leeds to join the east coast main line. Is she considering joining that at York, and is she aware that there is a major development site right next to York station? If that is her intention, she needs to state it early to make sure that the land is available.
Justine Greening
I am very grateful to the hon. Gentleman for flagging up that opportunity. I have no doubt that over the coming weeks and months he will want to set out some of those ideas in more detail. Over the course of this Parliament, we will be putting significant effort into developing High Speed 2—I think we will spend something like £750 million in total—and I am sure the hon. Gentleman will want to ensure that he puts his views forward.
Rehman Chishti (Gillingham and Rainham) (Con)
Can the Minister clarify and confirm that real concern was expressed prior to the introduction of High Speed 1 in Kent, but since then there has been real economic regeneration and growth in the south-east and Kent?
Justine Greening
I absolutely agree with my hon. Friend, and I think it shows that we are right to get on with this project today, but we are also right to work with local communities, and they can see huge benefits from high-speed rail when it comes to their communities.
Katy Clark (North Ayrshire and Arran) (Lab)
I welcome the Minister’s statement. Elsewhere in Europe, high-speed rail has been kept affordable by keeping it in the public sector. Will she make a commitment that this will be kept in the public sector in this country?
Justine Greening
I cannot make that commitment. We are just at the business of assessing what the line route is—I made my decision on that today, and will continue to develop the phase 2 route. I think decisions about how the train service will be operated are ones for further in the future, but of course we will look to do what we think is best value for the taxpayer and the travelling passenger.
Iain Stewart (Milton Keynes South) (Con)
The long-term benefits that High Speed 2 will bring to my Milton Keynes constituents will be welcome, by freeing up capacity on the existing line. However, there is overcrowding now, which will get worse before High Speed 2 opens. Will my right hon. Friend assure me that the Government will continue their impressive record of investment in the classic network, to meet demand in the period before HS2 starts?
Justine Greening
I can tell my hon. Friend that there will be 106 extra carriages serving his stretch of line, and I think that shows that this Government are committed to making sure that we get investment in our railways in the short and medium term as well as the long term.
Chris Bryant (Rhondda) (Lab)
I am as keen on the Secretary of State for Wales as anybody else is, and I am delighted that the Secretary of State for Transport has done so much to keep her in her job, but can she be precise about the amount of money that is being spent on tunnelling in the constituency of the Secretary of State for Wales, because the total amount being spent in Wales on the railways this year is just £500 million?
Justine Greening
I would have thought the hon. Gentleman would be pleased, because the route that I announced today will see us spend less money in my right hon. Friend’s part of the country. The way in which he has turned what I took to be the incredibly serious issue of this line impacting local communities in an area of outstanding natural beauty into a pure political point is a disgrace. The Secretary of State for Wales, alongside other MPs, has done a damn good job in representing her constituents, and I think she has probably been a lot more effective than he has been in the past.
Martin Vickers (Cleethorpes) (Con)
I welcome the Secretary of State’s announcement. Many of my constituents work at Tata Steel in Scunthorpe, where rail production is one of their most profitable lines. Can she give me a categorical assurance that everything possible will be done to ensure that the procurement procedures favour British-based companies?
Justine Greening
My hon. Friend will know that one of the things I am committed to doing in my role is to bring about a more strategic relationship, in terms of our procurement, with suppliers in the UK, and non-UK suppliers. I think that puts companies in production in the UK in a good position. There is unprecedented investment going into the railways at the moment. I have just announced the biggest railway infrastructure project that this country has seen in over a century. I think that is good news for Britain, but also good news for jobs and good news, hopefully, for companies like Tata.
Mr Andy Slaughter (Hammersmith) (Lab)
The Secretary of State dismisses in one sentence the Select Committee’s recommendation that the London terminus should be at Old Oak rather than at Euston. Will she look at that again, or at least publish the evidence on which she bases that view, and will she assure us that the mitigation will apply at least as much to Labour seats in west London as Tory seats in the Chilterns?
Justine Greening
We looked very carefully at where the HS2 line should terminate when it got to London. Our decision was that it was far better to terminate it in London than, as it were, at Old Oak Common, which would have seen people then have to transfer again. [Interruption.] The hon. Gentleman says Crossrail, but of course they would have to transfer on to Crossrail. That is an added advantage that they will have, but we believe it is far better for HS2 to come in to Euston.
I can assure the hon. Gentleman that I worked as hard looking at mitigation elsewhere on the line as I did looking at it in the AONB in the Chilterns, and I am committed to making sure that I continue to do that throughout this entire process.
Dan Byles (North Warwickshire) (Con)
The Transport Committee’s detailed report raised a number of serious questions about the business case and the technical assumptions behind HS2. It also made the clear recommendation that the Secretary of State should not make a decision on HS2 until she had addressed those questions. Can she explain why she has chosen to ignore that clear recommendation?
Justine Greening
I think my hon. Friend would be the first person to agree that the Transport Committee’s overall comment on HS2 was that it was a good value-for-money project. The engineers have looked in detail at every aspect of HS2. I encourage my hon. Friend to look at the plethora of reports that we have put out today, many of them giving technical detail. I hope that will provide him with the confidence that he needs.
Mr Speaker
I appeal to the Secretary of State to look at the House so that we can all hear her answers.
Mr Mike Weir (Angus) (SNP)
We welcome the commitment to HS2 and note what the Secretary of State said about the impact on Scotland, but will she now widen the remit of HS2 to allow immediate planning for extension further north and link-up with development in Scotland, rather than waiting the several years that it will take the hybrid Bills to go through this place?
Justine Greening
It is fair to say that our focus must be on making sure that the Y network and, in particular at this point, phase 1 of that network happens. I am happy to discuss with the Scottish Government their proposals and ideas for how we broaden that network further in the future.
Angie Bray (Ealing Central and Acton) (Con)
I very much welcome the statement, particularly confirmation that the station at Heathrow will go through in phase 2. Does the Secretary of State agree that when phase 2 is completed and there is a direct link from the north to Heathrow, that should make a significant contribution to reducing the pressure of domestic flights at Heathrow?
Justine Greening
I agree with that. We have estimated that around 4.5 million air flights a year will transfer on to high-speed rail as a result of this.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I welcome the right hon. Lady’s brave decision today. Like others, I am a little worried that if the legislative timetable is too long, the project may lose impetus and she may be a victim of election trimming. Will she reflect on those risks?
Nadhim Zahawi (Stratford-on-Avon) (Con)
Today’s announcement has been welcomed by the business community in my constituency, including the chairman of the Coventry and Warwickshire local enterprise partnership, but many people are rightly concerned about the countryside. Does my right hon. Friend agree that it is vital to safeguard the countryside and its wildlife as far as possible for all the people who are living there today, as well as for those who will be living there tomorrow?
Justine Greening
I thoroughly agree. I have had a clear priority to look at how we can minimise the impact of this project on people, but in addition to that I have been careful to look at how we can minimise the impact more broadly on both the environment and of course wildlife, and I will continue to do that. The environmental impact statement process that we can now begin will enable us to do that in a far more detailed way. That is very welcome.
Stephen Timms (East Ham) (Lab)
I welcome the statement. Greengauge 21 has pointed out that if some commuter services that currently run into Euston could be diverted on to Crossrail when High Speed 2 opens, that would create new through-services, which would be very welcome, could significantly reduce the demand for extra platform capacity at Euston, addressing one of the problems that has been raised in this exchange, and would also open up the possibility of a much better interconnection between High Speed 1 and High Speed 2 than the single-track proposal that is on the table at present. Is the Secretary of State looking at that idea for improving the position?
Justine Greening
We have reached a conclusion on phase 1, which I have announced, and we have looked at such proposals. Network Rail is now able to look at the possibilities arising from the released capacity on conventional lines. That has the potential to address some of the points that the right hon. Gentleman raised.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I welcome today’s announcement on an important piece of our national infrastructure. As such, will my right hon. Friend consider all of us who represent constituencies west of Heathrow and make sure that the connectivity from the west into the new network is as good as possible?
Justine Greening
Yes, I will. We are always looking at ways to improve that, and I welcome the chance to talk to my hon. Friend about it.
Barry Gardiner (Brent North) (Lab)
The Secretary of State has rightly spoken of the need to offset biodiversity loss and mitigate environmental impacts on wildlife, but will she go one stage further and take this unique opportunity to look at developing migratory corridors that will give species that need to migrate northwards as a result of climate change the connectivity in the landscape to enable them to do so?
Justine Greening
The hon. Gentleman raises an important point, and I will be keen to look at the environmental opportunities presented by the project as well as the environmental challenges.
Nigel Mills (Amber Valley) (Con)
This will be even more popular in Derbyshire if the trains are built at Bombardier. When will we know the detail of the location of the station for the east midlands and the route for the track, which is of some concern to my constituents?
Justine Greening
My hon. Friend will have been pleased, over Christmas, to see that Bombardier won the contract to produce train carriages for Southern Rail. We will be getting some initial views on the route later this year, and that is when we would like to see regions, areas and communities trying to reach some consensus on where those interim stations should be.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I welcome the statement and the accompanying Command Paper in relation to talk about the foundation for subsequent phases and extensions arising from the Y route. In her discussions with the Scottish Government, will she look specifically at the business case, and start to do so now, so that the vital impetus to ensure that HS2 benefits Scotland is not lost?
Justine Greening
We are getting on with our discussions. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), will be going to Scotland tomorrow, and I have no doubt that those conversations will start right now.
Chris White (Warwick and Leamington) (Con)
Does my right hon. Friend work on trains when she is travelling around the country, and if she does, along with hundreds of thousands of others, does she not believe that that factor undermines a major plank of the business case for HS2?
Justine Greening
No, I do not. The fact the people rightly complain when they get delayed on a train and stuck in traffic shows intuitively that people place a huge value on their time, and rightly so. We use robust methods to value time in the business case, and they are absolutely correct.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Timetables are important to railways. When does the Secretary of State expect to see the first high-speed train into Glasgow Central station running on high-speed rails?
Justine Greening
In theory it should be in 2026, when the high-speed line from London to Birmingham is complete and trains will continue up the west coast main line, and no doubt arrive in Glasgow. I know that the hon. Gentleman’s underlying question was when the high-speed network will make it up to Scotland, and as I said on a number of occasions during the statement, I am very happy, indeed keen, to talk to the Scottish Government about their proposals for that in the future. In the meantime, the good news today is that we are getting on with phases 1 and 2. That has to happen in order for his desire to be fulfilled as well.
Jeremy Lefroy (Stafford) (Con)
I thank the Secretary of State for her statement. The plans published today do not include any stops on the Y between Birmingham and Manchester, whereas there are two between Birmingham and Leeds. Businesses in north Staffordshire believe that a stop is essential to the development of the regional economy. Can she confirm that it is still under serious consideration?
Justine Greening
I will be very happy to talk to my hon. Friend about his desire for high-speed rail in his area, and then we can discuss those precise issues.
Susan Elan Jones (Clwyd South) (Lab)
I congratulate the Secretary of State and thank her for her commitment to HS2 today. She will, of course, be aware that there has been a great deal of support from members of the public and from businesses in Wales on this. Can she confirm whether the Secretary of State for Wales, in her capacity as Secretary of State for Wales, made representations in favour of this, thus reflecting widespread opinion in Wales?
Justine Greening
The Secretary of State for Wales did her job both as a Welsh Secretary and as a constituency MP in talking to me about the benefits of the project, and I thoroughly agree with her that we have ended up with the right line, with the right mitigation.
Damian Collins (Folkestone and Hythe) (Con)
My constituents in east Kent, who already benefit from High Speed 1, will be pleased to hear that there will be direct through services on High Speed 2 to the north and the midlands. Has the Secretary of State considered the economic benefit to Kent, East Sussex and east London of better connectivity with the major centres of the north and the midlands?
Justine Greening
Part of our business case for phases 1 and 2 is looking at the wider economic impacts. It is always difficult to monetise those properly, but I believe that they will include some of those positive impacts, and that over time we will see the benefit of a larger high-speed network nationally, bringing benefits not only to constituencies like my hon. Friend’s, where the network already exists, but to other cities across the country.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I would be intrigued to learn how it is cheaper to develop a railway by digging a tunnel. How can the UK Government justify that decision, which it is reported will cost £500 million, made to keep the Secretary of State for Wales in post, while refusing even to electrify the main line to Swansea?
Justine Greening
May I just correct the hon. Gentleman’s facts? Tunnelling under the Chilterns will save between £250 million and £300 million, rather than costing £500 million. I hope that that provides him with some reassurance that this will in fact be less expensive than it would otherwise be.
Greg Mulholland (Leeds North West) (LD)
All of us involved in the cross-party, cross-sector and cross-riding campaign for a high-speed rail line to Yorkshire are absolutely delighted by the announcement. Because it is so important that it gets to the northern cities, can the Secretary of State assure us that in the legislation she will ensure not only that the line will be guaranteed to go to Sheffield, Manchester and Leeds, but that the two Ys will be built no more than six years after phase 1, as currently planned?
Justine Greening
My hon. Friend is right to urge me to push on with that, which is precisely what I will do. I do not think that I can add anything to my earlier comments on my desire to provide a concrete assurance that the Y will happen, but I reiterated on many occasions in my statement my intention to see the full Y network built.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I commend the Secretary of State for her decision. Many of the arguments for High Speed 2 cited reduced journey times, which are obviously important, but I have always thought that the arguments about capacity are equally compelling, particularly as investing in classic rail services would provide only two thirds of the capacity that we will get with high-speed rail. How great a factor was that in her decision?
Justine Greening
One of the most important parts of the decision was looking at the alternatives to see whether they could answer the critical capacity question that, as the hon. Gentleman points out, we face. High Speed 2 is the best answer to that question. I urge other Members who have asked themselves that question, but who have perhaps not done quite as much research as he has, to look at the Network Rail report published over the weekend, because it gives a compelling and robust assessment of some of the alternatives and sets out precisely why they would not have delivered the capacity that we so badly need.
Mark Menzies (Fylde) (Con)
Businesses across Lancashire will welcome today’s announcement on High Speed 2. When will the Secretary of State be in a position to lay before the House details of the region-by-region economic gain that HS2 will bring to the north?
Justine Greening
We have already looked at the wider economic impact, but I will see whether it is possible to break it down by region. There is no doubt that the broad overall economic impact of HS2 will be substantial.
Kelvin Hopkins (Luton North) (Lab)
HS2 will not resolve the urgent need for additional rail freight capacity. To achieve significant modal shift for freight traffic we need a new route, built to UIC gauge C, enabling continental rail wagons and lorries on trains to be transported up and down Great Britain and to and from the continent. Will the Secretary of State look at the case for a dedicated rail freight route from the channel tunnel to Glasgow, for which a carefully designed scheme is already available?
Justine Greening
The hon. Gentleman is right to raise the critical issue of freight. I visited Felixstowe port earlier last year and talked to people there about the sorts of challenges they face and the investment that they feel is needed in the network, and I will continue to look at those opportunities. He emphasises the continued need for investment in the current conventional line while we get on with our proposals on high-speed rail.
Gavin Barwell (Croydon Central) (Con)
I warmly welcome my right hon. Friend’s announcement on what will be a significant improvement in national infrastructure. May I ask her about Old Oak Common in relation to the connectivity to Crossrail and the Great Western line? Would she also look at the possibility of connecting the high-speed line to the West London line so that people living in south London and the south-east can access HS2 without having to use the London underground?
Justine Greening
My hon. Friend raises the right point, which is that the plans for HS2 that we have announced and confirmed today will in future present broader opportunities to us and our transport system. I will be happy to discuss those with him in the coming weeks and years.
Mr Clive Betts (Sheffield South East) (Lab)
The Secretary of State’s announcement will be warmly welcomed in the Sheffield city region, particularly the fact that consultation on the route north of Birmingham will begin this autumn. However, at that time blight will begin for households and businesses. Will she therefore give an assurance that the decision on the route will be made as quickly as possible afterwards? When will compensation arrangements be in place for those affected?
Justine Greening
What will happen later this year is the start of an informal discussion with stakeholders in that region on where the route might go. The formal consultation is scheduled for 2014, precisely so that we can, I hope, minimise blight. As I think I have said very clearly to the House today, we will consult on a final package of property and blight compensation and mitigation later in the spring, which will help to provide some assurance to the hon. Gentleman’s constituents that there is a structure in place to ensure that there is a package of support for people who are directly affected by High Speed 2 as it goes into phase 2.
John Howell (Henley) (Con)
I welcome my right hon. Friend’s decision and the measures that she has announced, which will benefit the Chilterns as a whole, but will she say a little more about the commitment that she has made about giving the public more opportunities to get involved as the project proceeds?
Justine Greening
Broadly, two things will happen. First, as I have said, we will consult on the compensation and blight package in spring. Secondly, we will set up structured working with local authorities and community groups on the environmental, planning and community challenges, to ensure that we can make the most of HS2 and take advantage of some of the opportunities for the environment as well as mitigating some of the downsides of going ahead with the project.
Stephen Pound (Ealing North) (Lab)
Further to the question from my hon. Friend the Member for Sheffield South East (Mr Betts), commencement is a long way down the line, but the contemporary concern in my constituency is blight and the fear of blight. The right hon. Lady has said that discussions on the details of mitigation will take place possibly this year and possibly next year. With respect, that is not good enough for Northolt, Greenford and Perivale. Will she tell me something today so that I can explain to those people that they will have their voices heard, particularly and specifically on mitigation?
Justine Greening
Yes, I can. The hon. Gentleman will obviously be aware of the bored tunnel under Ruislip, which will significantly help his area. I would also direct him to look at the document that we have issued today setting out our review of property issues. It talks in very clear terms about the next steps, and what will happen when.
Karen Lumley (Redditch) (Con)
Will the Secretary of State reassure the residents of Redditch that High Speed 2 will come in on budget, and that it will bring massive economic benefits to constituencies in the west midlands?
Justine Greening
I hope that I can provide reassurance. We have certainly developed the calculations on costs in line with Treasury guidance, which is very conservative. Of course I will be aiming, if at all possible, to have the project come in under budget, although I suspect that there will also be others who will have to manage the costs over the coming years.
Phil Wilson (Sedgefield) (Lab)
I commend the Secretary of State’s statement this afternoon. Is she aware that the High Speed 2 announcement could bring benefits to the north-east of England almost straight away? Hitachi Rail Europe, which wants to build its train factory in Newton Aycliffe in my constituency, has announced that it will bid for the rolling stock to be made there when the time comes, which could bring jobs to Durham, the Tees valley and the north-east of England.
Justine Greening
The hon. Gentleman points out the very welcome investment from Hitachi in his area. Combined with the unprecedented investment that the Government are making in our railways today and in future, which I have announced today, that bodes well for creating more jobs building rolling stock in the UK.
Stephen Mosley (City of Chester) (Con)
I warmly welcome my right hon. Friend’s statement today, which will deliver massive long-term benefits for the north of England. However, during the construction phase of High Speed 2, it is likely that there will be significant disturbance to the existing west coast main line, in particular because of work at Euston station. Has she considered how to ensure that existing services are protected during construction?
Justine Greening
We will work in a very detailed fashion to make sure any disruption is minimised. The disruption will be significantly less than the disruption that there would have been if we had had a strategy of upgrades to lines, including the west coast main line.
Angela Smith (Penistone and Stocksbridge) (Lab)
The Secretary of State gave a helpful hint earlier, when she said that she was considering covering the whole Y-shaped network in forthcoming hybrid legislation. Will she agree to meet a delegation of MPs from northern cities so that we may press the argument for its inclusion, which is amazingly and incredibly important to the whole north of England?
Justine Greening
I shall be happy to meet the hon. Lady. On that agenda, I would also like us to discuss some of the benefits that HS2 can bring to communities such as hers—one that I, of course, know very well.
Stuart Andrew (Pudsey) (Con)
Coming from Yorkshire, may I enthusiastically welcome the Secretary of State’s announcement? Does she agree that if we are to rebalance the economy from the south-east to the midlands and the north, constituencies such as mine, and the wider city of Leeds, need to become more attractive for business to invest in? Fundamental to that is ensuring that we deal with the overcrowding problems on our existing rail services. HS2 is the solution, and it is good for Britain.
Justine Greening
It certainly is, whether in terms of providing more seats for passengers in the future or relieving the huge pressures on the existing rail network. HS2 is a direct line for growth in our country, and I am absolutely delighted that we have been able to announce today that it is going ahead.
Julie Hilling (Bolton West) (Lab)
I very much welcome the Secretary of State’s announcement, as well as her commitment to the Y network and the ongoing improvement of the classic network. However, the northern hub is essential if we are to ensure connectivity so that local services are not disadvantaged by HS2. Will the Secretary of State commit to the full funding of the full northern hub project?
Justine Greening
We have already announced the electrification of the trans-Pennine railway line, which is a key part of how we can start to deliver some of the northern hub agenda. I am very happy about that, and we are indeed looking at what it means for the rest of the northern hub proposal as part of the HLOS2 review process, which is happening right now.
Mr Marcus Jones (Nuneaton) (Con)
Fast services on the west coast main line to Nuneaton were drastically reduced under the previous Government in 2008, much to the displeasure of many of my constituents. Will my right hon. Friend explain whether HS2 will make the provision of fast services for my constituents better or worse?
Justine Greening
I certainly hope that it will give us the potential to make them better, and Network Rail is looking at precisely what the opportunities for the conventional rail network will be if we have capacity elsewhere via high-speed rail and High Speed 2. The problem we have at the moment is that the more constrained capacity is on the network, the more we have to prioritise where to connect to on the network to maximise passenger benefit, and that has, of course, caused pressure to reduce the network’s connectivity. One of the best things about HS2 is that it starts to open up some real opportunities on the existing network to connect people better with the railway.
Jonathan Ashworth (Leicester South) (Lab)
I welcome the Secretary of State’s statement on high-speed rail. She will presumably agree—certainly with regard to phase 1—that commuters travelling from Leicester train station in my constituency will see no direct advantage, although I appreciate that phase 2 may be different. She will be aware that many of those commuters have been hoping for the electrification of the midland main line. Given her remark that she is ruling out short-term fixes, is she now saying there is no possibility whatever of electrification of the midland main line in the foreseeable future?
Justine Greening
No, I am not. We have the HLOS2 process, by which we can consider all such things. Again, I would encourage the hon. Gentleman to look at the Network Rail report, which is very clear-cut about some of the pressures there will be on the midland main line if we do not go ahead with High-Speed 2.
Graham Evans (Weaver Vale) (Con)
I am delighted to welcome the Secretary of State’s statement. This is the right decision for the whole country and will tackle the capacity challenge, create jobs in the midlands and the north and equip our economy for the 21st century. Will my right hon. Friend confirm that High Speed 2 will reduce carbon emissions, as well as switching people from road to rail?
Justine Greening
We hope that it can. It will result, on average, in about 4.5 million short-haul flights a year and about 9 million road journeys a year transferring to high-speed rail. Both those things will be good for the environment.
Sheila Gilmore (Edinburgh East) (Lab)
Despite warm words from the Secretary of State about Scotland, I remain unclear about whether she is prepared to extend the remit of the HS2 company to include detailed route planning for Scotland. If she is, when will it happen?
Justine Greening
I ask the hon. Lady to give me a chance to get up to Scotland and meet the Scottish Government. I will be happy to meet her and other MPs representing Scottish constituencies to discuss the opportunities for the broader high-speed network. As she demonstrates so clearly, in countries that get on with high-speed rail, once one bit of the line is done there is pressure to do more of it. That is because it is incredibly successful and people can really see the benefits.
Esther McVey (Wirral West) (Con)
Having worked closely with the north west business leadership team, I would like to welcome High Speed 2 on its behalf, given the arguments that have been made over many years about unlocking the potential of businesses in the north, assisting the rebalancing of the economy, and proper connectivity between the north and south. This is a national scheme in two phases but will the Secretary of State clarify the benefit to the north of England from phase 1?
Justine Greening
The principal benefit will be not just the high-speed link between London and Birmingham but the fact that it could connect to the west coast main line, which means that people will benefit from shorter journey times that persist as they continue their journey further north. That is really good news for people in that area.
Kevin Brennan (Cardiff West) (Lab)
Did I hear the Secretary of State aright? Did she say that the Chilterns tunnel would cost £250 million to £300 million less than the cost would be without it? That raises the question why, if it is cheaper to tunnel, she is not burying the entire line. Will she please give us the true figure for building the tunnel?
Justine Greening
It will cost £250 million to £300 million less. The hon. Gentleman asked why we cannot tunnel the whole way under the Chilterns. Of course that is predominantly an engineering question concerning the amounts of spoil and the geographical nature of the land that we are going through. It is quite a complex question but the brief answer is yes, it really is more cost-effective.
John Stevenson (Carlisle) (Con)
The Secretary of State said that the hybrid Bill could include phase 2. Would it not be sensible, if we have a hybrid Bill before us, to take the route all the way to Glasgow and Edinburgh, which would reassure those of us who live beyond Manchester and Leeds that there will be a high-speed network there at some point in the future?
Justine Greening
The short answer is no. If we did that, we would have to go through the laborious process that we had to go through to sort out phase 1 of the route. It is better to get on with that and then initiate the process of finalising the route as it goes further north.
Graeme Morrice (Livingston) (Lab)
The disadvantage of being one of the last Opposition Members to be called is that people have already asked my question. But I will give it another go. I certainly broadly welcome the Secretary of State’s statement and recognise her comments about the project’s economic benefits for the entire United Kingdom—so long as the kingdom remains united, of course. I noted her reference to phases 1 and 2 of the project. Obviously, there was no specific mention of a phase 3 and the line’s extension to Edinburgh and Glasgow in Scotland, although I accept the Government’s aspirations in that regard. I also noted that on several occasions she told hon. Members that there would be discussions with the Scottish Government and Scottish MPs. I believe that such discussions, being long term and prolonged, should be structured. Will she publish a timetable for those discussions?
Justine Greening
I will consider how we can take forward discussions with the Scottish Government. Perhaps I can set out a few more details for the House in the near future.
Jason McCartney (Colne Valley) (Con)
HS2 has the potential to tear down the north-south divide. With that in mind, does my right hon. Friend agree that support for, and confidence in, the project in the north of England would be massively enhanced if the building of the Manchester and Leeds legs began as soon as possible, at the same time as the London to Birmingham leg?
Justine Greening
We cannot do that, but for all the right reasons—because we have to go through the rigorous process of ensuring that we have got the line of route right. However, I can assure my hon. Friend that we will go through that process as fast as we can—but get it right—and then crack on with the rest of the Y-shaped network.
Guy Opperman (Hexham) (Con)
In the north-east and Newcastle this decision is welcomed, both by business leaders and because it is good for the economy. Can the Secretary of State identify to what extent HS2 will free up existing rail capacity on lines to and from the north-east?
Justine Greening
We believe that it will have the potential to free up significant capacity. As for the potential that this will create for the conventional rail network on new routes and new station stops, Network Rail has been asked to do that work and will report to me later in the year. I look forward to reading that work with interest, and to sharing it with the House.
Christopher Pincher (Tamworth) (Con)
My right hon. Friend will be aware that many people believe the present exceptional hardship scheme to be inconsistent and unfair. Can she confirm that her proposed refreshed hardship scheme will be consistent and will ensure that anybody affected by blight who wishes to move will be properly compensated? Those people should not be penalised for living in the wrong place at the wrong time.
Justine Greening
I have been keen to look at what we can do to improve the effectiveness of the hardship scheme. My hon. Friend will know that we have received around 240 applications from people. With the finalised line of route, some of those will obviously be from people in areas that will now see real mitigation. The point of the consultation, which will happen in the spring, is to ensure that we finalise those details. I very much urge him and his constituents to respond to the consultation, so that we can reach a final version of the scheme that delivers what we want, which is a fair deal for the people affected.
Mr Philip Hollobone (Kettering) (Con)
In commissioning HS2, will my right hon. Friend avoid the mistakes of the previous Government in drawing up the contract tender specifications for the last Bombardier contract, and do all in her power to ensure that as much of the materials, construction work and rolling stock for High Speed 2 as possible is provided by British firms, providing British jobs for British workers?
Justine Greening
This Government have a laser-like focus on ensuring that our country becomes more competitive and creates more jobs. We are now back in the top 10 nations in the World Economic Forum ranking for the first time in many, many years. I believe that our companies are well placed to take advantage of the investment that we are making, and that is certainly what I want to see happen.
Kris Hopkins (Keighley) (Con)
I welcome this important announcement. Will my right hon. Friend ensure that high-quality engineering and construction companies in the north of England have a fair chance of bidding for some of the £33 million, and that it does not become just an opportunity to refill southern coffers?
Justine Greening
I have no doubt that companies in my hon. Friend’s part of the country will be extremely well placed to bid as well as anybody else, in any other part of the country, to take advantage of some of the economic benefits coming from this project.
Mr Ben Wallace (Wyre and Preston North) (Con)
I think that I am on the slow line, Mr Speaker. I warmly welcome my right hon. Friend’s announcement today about High Speed 2. As a good northern girl, she will know that the north of England does not start and stop at Leeds and Manchester. On the route map published today, it seems that High Speed 2 on the north-west line extends further north than Manchester, perhaps to what looks like Preston. Will she give serious consideration to ensuring that Preston is included in phase 2, so that Lancashire and one of the hubs of British manufacturing get direct access to the south?
Justine Greening
I am delighted to tell my hon. Friend that places such as Preston will gain from phase 1, in terms of connectivity between the west coast main line and HS2. I am as passionate as he is about ensuring that his area has excellent railway links, and we are looking at developing the HLOS2 proposal for shorter and medium-term funding in our railways. I have no doubt that he will continue to represent his constituents’ needs to us as powerfully as he just did, and I will continue to pay very close attention to them.
Mr Speaker
Seventy-four hon. Members have been able to question the Secretary of State in 59 minutes of exclusively Back-Bench time, so I thank colleagues for the succinctness of their questions, and the Secretary of State for the succinctness of her answers.
Scotland’s Constitutional Future
(12 years, 10 months ago)
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The Secretary of State for Scotland (Michael Moore)
With permission, Mr. Speaker, I would like to make a statement on Scotland’s constitutional future in the United Kingdom.
In May 2011, the Scottish National party won a significant electoral victory—a victory that this Government have openly acknowledged. The SNP has consistently campaigned for Scottish independence, and its 2011 manifesto included a pledge to hold an independence referendum. As a Scot, I think that it is vital that the Scottish people make a clear decision about our future within the United Kingdom: a decision made in Scotland, by the people of Scotland. At present, however, there is a lack of clarity about the referendum, its outcome, and what the implications of that outcome would be, all of which creates economic uncertainty. That is bad for jobs and investment.
Since last year’s election, we have been asking the Scottish Government to set out their plans for a referendum, but so far they have not done so. In particular, they have not said anything more about their legal power to deliver a referendum. This is not an issue that can be ducked. To legislate for a referendum on independence, the Scottish Parliament must have the legal power. It is this Government’s clear view that the Scottish Parliament does not have that legal power.
Scotland’s future within the UK will be the most important decision we, as Scots, take in our lifetime. It is essential that the referendum is legal, fair and decisive. As a Government, we have been clear since May 2011 that we will not stand in the way of a referendum on independence, but neither will we stand on the sidelines and let uncertainty continue. Any referendum must let all of us in Scotland determine our future clearly and decide whether to stay part of the longest, most successful partnership of nations in history. That is why we are publishing a consultation to seek views on how to deliver a legal, fair and decisive referendum. For a referendum to take place, legislation is required. That will ensure that any referendum, on any issue, is subject to detailed consideration and debate, and to clear and consistent regulation.
In 2010, the Scottish Government published plans to legislate for a referendum on independence. We have considered those plans carefully against the devolution settlement in Scotland as set out in the Scotland Act 1998. The 1998 Act is clear: the Scottish Parliament cannot legislate on matters reserved to this Parliament. Among the issues that are reserved is the constitution, including
“the Union of the Kingdoms of Scotland and England”.
Any Act of the Scottish Parliament that “relates to” a reserved matter is quite simply “not law”. Whether or not a Bill “relates to” a reserved matter depends on its purpose and effect. We are clear that the Scottish Government’s purpose in bringing forward a referendum is to secure independence. Their intended effect is to secure a mandate for negotiating this. Both purpose and effect relate directly to the reserved matter of the Union. Any distinction between a binding or advisory referendum is artificial. As the law stands, an independence referendum Bill is outside the competence of the Scottish Parliament. Such a Bill could be challenged in court, and it is our view that the Scottish Government would lose.
The consultation paper that I am publishing today sets out different ways to deliver a legal, fair and decisive referendum. It explains how the powers for a referendum could be devolved under the section 30 order-making provisions in the Scotland Act 1998, which is our preferred approach. It also invites views on devolving the powers using other legislation, including the current Scotland Bill, and seeks opinions on the possibility of running the referendum directly.
Given the clear legal problem that exists, we want to work with the Scottish Government to provide the answer. This is not about the mandates of Scotland’s two Governments, or about who calls the shots. It is about empowering the people of Scotland to participate in a legal referendum. That means that the UK Government are willing to give the Scottish Parliament the powers to hold a referendum, which it cannot otherwise do legally. As well as being legal, however, a referendum must be fair and decisive. For those reasons, the rules of the referendum must be demonstrably above board. The referendum should be overseen by those who have neutrality and the proven expertise to inspire confidence in the fairness of the process, such as the Electoral Commission.
These issues are not for politicians alone to consider. That is why the consultation process that starts today will let people express their views on when a referendum should be held, what question should be asked, who should be entitled to vote and how the campaign should be run. It will be open to all people in Scotland—and, indeed, outwith Scotland—to make their views clear, rather than rely on the opinions of politicians. It is in everyone’s interests that the two Governments take on board the needs of Scotland and the opinions of its people, work together, and deliver the legal, fair and decisive referendum that is in our common interests.
The Government believe passionately in the United Kingdom. For over 300 years our country has brought people together in the most successful multi-national state the world has known. This Government are clear that independence is not in the interests of Scotland. The United Kingdom brings strength to Scotland; Scotland brings strength to the United Kingdom. We recognise that this is not a view shared by all, but politicians from both sides of the debate owe it to everyone in Scotland to ensure that the referendum is delivered in a legal, fair and decisive way.
The future of Scotland must not be worked out in secret, behind closed doors, nor determined by wrangling in the courts. It is my task to ensure that this referendum is made in Scotland by the people of Scotland for the future of Scotland. I commend this statement to the House.
Margaret Curran (Glasgow East) (Lab)
I thank the Secretary of State for sight of the statement before its announcement this afternoon. As a consequence of the result of the Scottish elections in May, we accept that the Scottish National party has a clear mandate to ask the people of Scotland whether they want to remain part of the United Kingdom. There is absolutely no doubt that this referendum will take place; what all the political parties must now do is work together to make sure that the referendum is fair, legal and commands the complete authority of the Scottish people.
In the light of the Secretary of State’s statement, we have some further questions and concerns that I hope he will address in his response. I begin by asking the Secretary of State how he plans to take forward his proposals and his plans for consultation on the section 30 order.
Secondly, I understand that without publishing any of their own legal advice, the Scottish Government are contesting the authority of the legal advice held by the Secretary of State. What assurances can he give the Scottish people that the advice he holds rests on a sound foundation—a foundation that is robust and authoritative on this issue? To ensure maximum transparency, does he plan to publish his legal advice, and would he recommend that the Scottish Government do the same?
Thirdly, Scottish Labour is clear that any question on separation must be a straight yes or no choice. We therefore welcome yesterday’s acknowledgement by the Deputy First Minister of the Scottish Government that this is also the preference of the Scottish National party. Will the Secretary of State confirm that this is the position of the coalition parties, too? If so, it is important to recognise that, in respect of Scotland, all four major political parties are in agreement that there should be a straight choice of a yes-no referendum. That is a highly significant development.
Fourthly, will the Secretary of State confirm with absolutely clarity today whether the UK Government support the involvement of the Electoral Commission in the conduct of the referendum? The Electoral Commission has overseen referendums in Wales and the rest of the United Kingdom this very year, and it has the highest level of confidence and respect in overseeing the referendum as a non-partisan arbiter. We are of the opinion that it is the body best placed to oversee the referendum. Does the Secretary of State share that view?
Which Minister will lead the consultation? Will it be the Secretary of State himself, or will it perhaps be the Chancellor? The United Kingdom Government appear to have sent out the wrong signal by allowing the Chancellor, rather than the Secretary of State for Scotland, to take the lead on a vital Scottish issue in the Cabinet.
As the First Minister asserted last May, the sooner the vote on the future of Scotland is held, the better. Scotland’s economy is flatlining. One in four young Scottish men is out of work. We are told that Scotland now faces record levels of child and family poverty. What we cannot afford to do is spend the next four years obsessing about the process of a referendum. Now is the time for parties to work together, get on with the debate, and get on with deciding where Scotland’s best future lies.
The Scottish people face a momentous decision in the referendum. What Labour will not do is sit back and support a process that turns into a petty fight between the two elements that Scotland rejects—separation and the Tories. Scotland deserves better than politicians bickering about the process. We must move as quickly as possible to a debate of substance that puts Scotland’s people and Scottish interests first.
Michael Moore
I entirely agree with what the hon. Lady has just said about the need for us get on with the debate, and to ensure that the Scottish people and Scottish interests, not the interests of politicians in different political parties, are at the heart of it.
I am delighted to confirm that—as the hon. Lady will see if she reads the consultation paper, and as is clear from the fact that I made the statement today—I will lead for the Government, working with all my colleagues.
As I acknowledged in my statement, the Scottish National party secured an important victory in the elections last year. It had set out its clear intention of holding a referendum, but what was not so clear was how it would do that. As I have said, we believe the legal position to be that the Scottish Parliament does not have the power to conduct any kind of referendum, and it is therefore important for us to work with the Scottish Government to ensure that we can get on with this historic decision.
The hon. Lady asked how we would consult. The consultation document offers people throughout Scotland the opportunity to write and involve themselves in the process. I will of course be going out and about in Scotland myself, and I am sure that many others will also involve themselves in the debate. It is important that everyone in Scotland is able to feel part of the process.
The hon. Lady will be aware of the ministerial code and the convention followed by successive Governments that legal advice is neither acknowledged nor published. However, I ask her to look carefully at the consultation document and to note the authority that we are bringing to bear, namely sections 29 and 30 and, in particular, schedule 5 of the Scotland Act. I believe that careful examination of those documents will lead to only one clear conclusion: that there is no legal authority for any referendum. We must ensure that that issue is resolved.
The hon. Lady asked whether I, like her, support a simple, straightforward yes-no question on Scotland’s place in the United Kingdom. That is indeed what we are recommending. As for the issue of oversight, I think it entirely fair and reasonable for the process of a referendum to be overseen by a body that has widespread experience, is neutral, and is seen to be above and beyond the fray. The Electoral Commission seems to me to fit the bill, but I look forward to hearing the reactions of others during the consultation.
Mr John Redwood (Wokingham) (Con)
What do the Government propose should happen to the shared debts and the shared membership of the European Union were Scotland to leave the Union?
Michael Moore
The right hon. Gentleman asks an important question. I am sure that it is one of many that will be at the heart of the debate about Scotland’s future when we come to the referendum itself, but for now I want to ensure that we can get on with the proper substantive debate.
Mr Jack Straw (Blackburn) (Lab)
May I pick up on the important point made by the right hon. Member for Wokingham (Mr Redwood)? During the referendum campaign, there will be claim and counter-claim about the adverse or beneficial effects for the people of Scotland, and by extension for the people of the other parts of the United Kingdom, of separation or retention of the Union. Will the Secretary of State consider, in consultation with all the parties, drawing on the experience of the Office for National Statistics, the Statistics Authority and the Office for Budget Responsibility and deciding whether a body should be set up to provide authoritative factual information about the consequences of separation and union, so that when there is an argument it is at least an argument on a common currency?
Michael Moore
The currency question will, of course, also be an issue in the referendum debate. The right hon. Gentleman draws on a lot of experience of the relevant legislation, and he makes an important point. When we hold the substantive debate—which must happen sooner rather than later—it is important that we can turn to agreed sources of information. We can consider that issue at a later date, but I accept the point the right hon. Gentleman makes.
Sir Menzies Campbell (North East Fife) (LD)
I am well aware of the convention that Governments do not publish legal advice, but, as my right hon. Friend has pointed out, this is a decision that can almost be described as unique because it would bring to an end hundreds of years of history. May I therefore urge him to reconsider whether the advice received by the Government should be published so as to achieve the clarity that the right hon. Member for Blackburn (Mr Straw) spoke about in relation to statistics?
I welcome today’s announcement, especially because political, economic and social uncertainty for the next two years would be deeply damaging to the people of Scotland. Does my right hon. Friend join me in wondering why those who are so confident of the case for independence are so unwilling to countenance a referendum now? Could it be that the bravehearts are no longer quite so brave as before?
Michael Moore
My right hon. and learned Friend makes an important point: over the past few months they have been strangely quiet about the need to get on with this referendum on an issue for which they have campaigned over many generations.
I am grateful to my right hon. and learned Friend for welcoming today’s announcement. In respect of the legal advice, may I advise him to look carefully at the consultation paper and the clear view about the authority in the Scotland Act? I am absolutely certain that that opinion is right, and as a result we need to ensure that the Scottish Parliament has the authority to pass a referendum Bill and get on with addressing this most important decision.
Angus Robertson (Moray) (SNP)
I am grateful to the Secretary of State for his timeous sharing of the statement in advance of his making it today.
Last year, the Scottish National party won an historic landslide victory on a platform to hold a Scottish independence referendum in the second half of the Scottish Parliament. The Conservative party, the Liberal Democrats and the Labour party opposed an independence referendum, and each one of those parties lost heavily in the election, so why are this Westminster Government trying to dictate terms about the referendum to the democratically elected Scottish Government, who have a mandate on this issue? Specifically, why are the Westminster Government seeking to dictate the date of the referendum and the questions on the ballot paper, and why are they seeking to exclude 16 and 17-year-olds from this important and historic referendum?
Michael Moore
I do not know how often I have to acknowledge the SNP’s victory of last year before the hon. Gentleman hears me say it, but I am happy to repeat that I recognise its victory of last year. I am surprised that he has such a problem with the law, however, because I am sure that an independent Scotland would want to be governed under the rule of law. Therefore, I think it is in all our interests to ensure that the legal basis of any referendum is clear. I am saying to him that it is not there—it is not possible to have a legal referendum. It does not matter whether it is “advisory”, “legally binding” or whatever one calls it: a referendum has to be legal, and the authority is not there. What I am offering the hon. Gentleman, the First Minister and all his party is a way by which all of us in Scotland can get on with this decision without needing to have it made by the courts, rather than by people going to the ballot box.
The hon. Gentleman referred to the terms on which we might do this. I repeat: we are consulting. We are asking people across Scotland—and those elsewhere who may have an opinion—to tell us what they think of our proposals. We want to do this together, between the two Governments, and I hope he will encourage his colleagues there to get alongside us and work with us.
As far as the date is concerned, there is no date in the consultation paper and the draft section 30 order that we are publishing. Regarding the ballot paper, I heard the Deputy First Minister say yesterday that she preferred having a single question, so it is quite useful to get on and do what she, as well as the rest of us, wants to do.
On the franchise, we are suggesting that the same franchise that was the right basis on which the First Minister and all his colleagues in the Scottish Parliament were elected should be used to determine this historic decision. As far as 16 and 17-year-olds participating is concerned, there is an entirely fair debate about their role in the electoral system generally, but it should not be focused around a single electoral event to suit one party or another. Let us just get on with the debate on the fairest of terms; that is what we are offering.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I welcome my right hon. Friend’s statement, simply because it is high time that the debate about Scottish nationalism that has been raging in Scotland should be debated here in Westminster, too. However, does he agree that there can be no question of holding a referendum that is legal, fair and decisive unless the proposal on the ballot paper is absolutely clear? Generally, I have to say I favour post-legislative referendums.
Michael Moore
It is important that we have a legal referendum that is conducted fairly, and that is decisive. I would like to see it sooner, rather than later. It is damaging to Scotland and its economy, affecting jobs and investment, if we simply have a long delay. I want to ensure that we have a proper debate about when that should be, and in this consultation we set out the way we can sort the date of the referendum, by agreement.
Ann McKechin (Glasgow North) (Lab)
There has already been a great deal of noise as a result of this afternoon’s statement, but it is very clear that the people of Scotland will not take to people playing games with their constitutional future. They will expect both Administrations to work together to find a solution to the problem that the Secretary of State has indicated today. Will he provide us with more information about how he will consult and negotiate with the Scottish Government? Will this matter be referred to the joint ministerial council and, if required, be subject to its dispute procedure?
Michael Moore
I am grateful to the hon. Lady for her welcome for this. I absolutely agree that people in Scotland will not thank any of us, from any political party—whether we were elected in Scotland to serve here in the House of Commons, or to serve in the Scottish Parliament—for playing politics with this most important process, leading to the most important decision we will ever take as a country. I therefore agree with her that it is important, as I have set out in my statement today and as we say in the consultation paper, that the two Governments work together. I spoke earlier this afternoon to the First Minister and asked him to consider carefully what is in the consultation paper. I look forward to meeting him early on to discuss it further.
Mark Lancaster (Milton Keynes North) (Con)
Given the economic implications of an independent Scotland for my constituents, when will the English finally get a say on the future of the Union?
Michael Moore
I have to say to my hon. Friend that it is important that the people of Scotland decide their place in the United Kingdom. I am confident that when they do so they will vote to stay within the United Kingdom.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
May I commend the Secretary of State for the balance with which he has approached this, unlike the leader of the sulking six from the SNP on my left? It is very important that we get it clear that this is not the end of the debate about the powers for Scotland; this is only about the referendum on being in or out, which I happen to think is 13 years too late, as it should have been on the ballot paper in the first devolution referendum. Is it clear that we can continue with the debate, for some of us aspire to give more powers to Scotland within the United Kingdom?
Michael Moore
I absolutely agree that there is a legitimate debate to be had about the powers that Scotland has within the United Kingdom. We have spent a long time on this in this House and their lordships will now consider the Scotland Bill, which will significantly enhance the powers of the Scottish Parliament, creating much greater financial accountability and giving it much greater economic powers. I believe that the debate on devolution will continue; all of our parties, be it the Labour party, the two parties in the coalition or the SNP, will continue to debate it. However, when we have extended the powers of the Scottish Parliament it has always been on the basis of a vigorous debate, where parties set out their stalls, there is a coming together as we develop consensus, as we did in the constitutional convention and in the Calman commission, and then legislation based on that consensus. That offers the best model for giving further powers to the Scottish Parliament, but we now have huge uncertainty because of this prospect of an independence referendum. I want to get rid of the uncertainty. Let us get on with the debate about Scotland’s place in the United Kingdom.
Malcolm Bruce (Gordon) (LD)
Further to that point, does my right hon. Friend accept that the dynamic of transferring power from Scotland to England is something for which our party, the Liberal Democrats, has fought for decades and has delivered for Scotland, that that process can continue only within the dynamics of the United Kingdom and that it should not be used to confuse a question about whether the people of Scotland can decide whether to stay in the United Kingdom? Does he welcome, as I do, the indication from the SNP that finally it will stop confusing the electorate of Scotland and give us a straight question: are we going to stay in the UK or not?
Michael Moore
I absolutely agree with my right hon. Friend. Various suggestions about “devo max” have been thrown around without any definition of what it might be and nobody has been willing to stand up and say that it is actually what they want to put forward themselves. Of course I agree with him that the Liberal Democrats have proudly proposed ways to modernise the United Kingdom constitution, and all parties in this House will continue to do that. What matters for now is that we get on and have a clear and decisive decision about our future, and I welcome the Deputy First Minister’s comments yesterday.
Anas Sarwar (Glasgow Central) (Lab)
I broadly welcome the Secretary of State’s statement. Clearly the SNP won a mandate for a referendum, but now that it has won that mandate it is no longer the SNP’s or Alex Salmond’s referendum, but Scotland’s referendum, because Scotland’s political future is way more important that any political party or individual politician. So does the Secretary of State agree that all political parties, and civic society, must come together in the best interests of the people of Scotland and decide when that referendum should take place?
Michael Moore
First, may I congratulate the hon. Gentleman on his new role within the Scottish Labour party? I am sure that he will be travelling the length and breadth of the country to make the case that he was just making, among other things. As for his central point, I agree that it is important that people of all parties, and those of none, get involved in this debate, so that all the people of Scotland are engaged in resolving the process and then getting on with the real debate.
Mrs Eleanor Laing (Epping Forest) (Con)
Given the astounding arrogance of the SNP in refusing to acknowledge that the Scottish Government simply do not have the legal power to hold a referendum, is the Secretary of State aware that most people, in all parts of this United Kingdom, welcome the fact that he and the Prime Minister have taken the initiative to allow a referendum and let the voice of the Scottish people be heard—not at some historically sentimental point in the future but as soon as the consultation is cancelled—because Scotland and the UK need clarity and certainty now?
Michael Moore
My hon. Friend expresses her disappointment in her usual characteristic style. I, too, hope that the Scottish National party and the Scottish Government will engage constructively and recognise the fact that it is in the interests of people across Scotland that the two Governments work together, get rid of this legal problem and get on with having the referendum on Scotland’s place in the United Kingdom.
Pete Wishart (Perth and North Perthshire) (SNP)
Will the Secretary of State please pass on our most sincere and deepest gratitude to his right hon. Friend the Prime Minister, because his clumsy and inappropriate steps into the constitutional question have led to thousands of people giving their support to the SNP and the independence cause? There are lots of the Secretary of State’s friends on the Front Bench and lots of his Tory friends on the Back Benches—will he encourage them to come to Scotland? The yes to independence cause needs to hear from the Conservatives.
Michael Moore
There was I hoping that the new year would bring a generous new spirit from the hon. Gentleman but, as ever, I am to be disappointed. I love the fact that he wants to get on with the debate—that would make a refreshing change from where the SNP has been for the past seven months.
Mark Menzies (Fylde) (Con)
As the Secretary of State will no doubt be aware, a number of respected economic institutions, including Citigroup, have highlighted that the prolonged uncertainty over Scotland’s future is costing investment and, ultimately, jobs in Scotland. When the Secretary of State next meets the First Minister of Scotland, will he ask him what he is feart of in putting the decision in front of the people of Scotland now?
Michael Moore
I might put it slightly differently. I have already suggested to the First Minister—and I intend to continue this discussion—that whatever our differences about the future of Scotland, it is important that we have a proper debate. I believe Scotland is far stronger as part of the United Kingdom and that the United Kingdom is much the stronger for having Scotland as part of it, whether we think about the economy, our defence, our welfare system or our international clout as Scots within the United Kingdom. I hope that we will get on with that debate, but in the meantime let us get a legal, fair and decisive referendum in progress.
Mrs Anne McGuire (Stirling) (Lab)
Over the past 30 or so years, the one constant in constitutional development in Scotland has been the fact that the Scottish National party has held to the position that its only position is independence for Scotland. Does the Secretary of State agree that it is faintly surreal that now that the Administration in Edinburgh have been offered the opportunity to have a legal basis on which to hold a referendum that might give them their life’s ambition, they now appear to be rejecting it? Is that not an utterly bizarre position for a party that has not participated in the constitutional development of Scotland over the past 30 years?
Michael Moore
The right hon. Lady makes an important point. In all the discussions over many decades about enhancing Scotland’s powers within the United Kingdom, the SNP has set its face against being part of that process. Occasionally, late in the day, it has joined in, but it has mostly turned its back. That is one thing, but to turn its back on a process that would enable a referendum on its life cause and its entire mission in politics is very odd indeed. I hope that when SNP members reflect carefully on the proposition, they will see that it is very reasonable and sets out a fair basis on which we can get on with the referendum and ensure that all people across Scotland can make this most historic of decisions. I believe that when they do, they will decide to stay within the United Kingdom.
Mr William Cash (Stone) (Con)
Given that Scotland is in the European Union by virtue of a United Kingdom treaty as implemented by the Westminster European Communities Act 1972, does the Secretary of State accept that if there were to be an independence yes vote, that would require a referendum of the United Kingdom as a whole?
Michael Moore
Until almost to the end of that question, I thought that for once I might be in agreement with my hon. Friend on a matter to do with Europe. He is right to raise the issue of Europe because Scotland’s membership of the European Union, were we to become an independent country, could not be taken for granted. There would have to be a process for getting into the EU, which is vital for our economy. On that basis, I hope we will find common cause.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I seek an assurance from the Secretary of State regarding the uncertainties that arise by virtue of the time being taken to get to the point where we have a referendum, which are very damaging for inward investment possibilities. Right now I am trying to get inward investment of some size into my constituency, but it is highly probable that as a consequence of all this the high levels of unemployment in my constituency will remain. Can he assure me that this process will take place sooner rather than later?
Michael Moore
The hon. Gentleman makes a really important point about his constituency. I am aware that huge decisions are being contemplated not just for his part of Ayrshire but for all parts of Scotland, and investors do not like uncertainty. We have seen the Citigroup report and the observations of the CBI and the Institution of Mechanical Engineers. It is bad for Scotland and for the UK to have this uncertainty. I want to see the referendum sooner rather than later and we will do everything in our power to ensure that we can do that.
Mrs Anne Main (St Albans) (Con)
I am really pleased that my right hon. Friend the Prime Minister has grasped this particular thistle. If there is an intention to build HW2, or Hadrian’s Wall 2, surely we need to know because many large projects will stop short of Scotland should the Scots not wish to be part of the Union.
Michael Moore
I do not know how many questions the Secretary of State for Transport took on High Speed 2, but that was a clever and ingenious further question. My hon. Friend is entirely right to highlight that for High Speed 2 to get to Scotland, everybody would need to work together, but with an independent Scotland who knows what they might think of that. Let us not forget that it is not just High Speed 2 that is relevant. Lots of defence projects in Scotland are hugely dependent and are part of the Scottish economy, whether they are on the Clyde or in Fife. For many reasons I think that Scotland should continue to be within the UK.
Ian Lucas (Wrexham) (Lab)
Is it the UK Government’s position that the referendum should take place within 18 months of today?
Michael Moore
No. If the hon. Gentleman looks at the consultation paper, he will see that no date was set in the consultation. I certainly believe it should be sooner rather than later and I hope to persuade the Scottish Government and people across Scotland that we should have it as soon as possible. However, 18 months is not the position of the Government and is not in the consultation document.
Mr Alan Reid (Argyll and Bute) (LD)
I welcome the statement. The Electoral Commission is independent and is the only body with the expertise to oversee this referendum. Does my right hon. Friend agree that it would be an outrage if the referendum proceeded as per the SNP’s draft Bill whereby it would be overseen by a body that would not be independent of the Scottish Government? The SNP has a mandate to hold a referendum not to rig a referendum.
Michael Moore
I absolutely agree that it is vital that people can have confidence in the referendum process, that it has a legal basis, that it is fair and that it will get a clear, decisive outcome. The role of a body such as the Electoral Commission will be vital because only through its neutrality, independence and experience can we get the necessary confidence so that the process and rules are not an issue. I hope that as we discuss and debate this issue across Scotland people will agree that the commission is the right body to oversee the referendum.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The Secretary of State has already responded to a question this afternoon about the eligibility of 16 and 17-year-olds to vote in the referendum. I have only had a chance to have a fairly cursory look at the draft order attached to his consultation paper, but perhaps he can clarify whether it will be the case that European citizens living in Scotland will be eligible to vote in a referendum but 16 and 17-year-olds will not. I understand the pressures of government, but will he support his own party’s policy—it has been a long-standing proponent of 16 and 17-year-olds having the vote—and support the rights of 16 and 17-year-olds to vote?
Michael Moore
What we are proposing is the same franchise as was good enough for the First Minister and every MSP in the Scottish Parliament. I find it slightly strange that people would argue that was not somehow a legitimate franchise on which to be elected. As to my own party’s position, I was clear about that earlier on, but I also made the point—I hope the hon. Lady would accept this—that we can argue about the role of 16 and 17-year-olds in the democratic process legitimately for all elections and all referendums and electoral events; to pick it out on one moment and to apply it in these particular circumstances would, I think, be wrong. But let us have the debate; let us see what people across Scotland believe.
Mr Speaker
Seeking now single supplementary questions of stunning succinctness, my eyes look no further than Dr Julian Lewis.
Dr Julian Lewis (New Forest East) (Con)
I knew that would be the case. Does the Secretary of State believe that there is any danger of the SNP boycotting a legitimate referendum, and if so, what would be the outcome if the vote were in favour of remaining in the United Kingdom?
Michael Moore
The hon. Gentleman invites me to consider a hypothetical question, which I do not believe will be the reality. I think it is important—and I believe it would be very strange if the Scottish Government did not—that they engage in the process of discussing this and that they consider the aspects that we are putting forward in the consultation today about providing a legal basis for a referendum and having a fair process and a decisive outcome. I think that that is important, and it would seem very strange if the Scottish Government were to turn round and say they did not want to be part of that process.
Mr Jamie Reed (Copeland) (Lab)
Deciding about independence is, of course, the sovereign right of the Scottish people and has consequences for the rest of the citizens of the United Kingdom. Will the Secretary of State raise with the Scottish Government the precise date upon which the radioactive materials from Scotland stored in my constituency will be returned to Scotland in the event of independence? [Interruption.]
Michael Moore
A colleague says from a sedentary position that that is a toxic question. The hon. Gentleman raises one of many issues that we have had sight of this afternoon that perhaps need to be debated when we get on to the referendum. What I am trying to do is make sure that, reasonably and quickly, we get on to that very referendum.
Louise Mensch (Corby) (Con)
Corby is the fastest-growing town in England and it boasts one of the largest concentrations of people of Scottish heritage and descent south of the border. I am grateful to my right hon. Friend for saying that people outwith Scotland will be consulted during the consultation, but will he assure me that Scots who live outside of Scotland will get the chance to have their voices heard?
Michael Moore
We will not restrict this consultation to people who consider themselves Scots. Wherever they might live—in Monaco or elsewhere—they will be entitled to take part in this consultation. When it comes to the vote, I think that, following internationally agreed precedents, it would be important that it is the people in Scotland who make that decision.
Lindsay Roy (Glenrothes) (Lab)
What approaches has the Secretary of State made so far to discuss referendum issues with the Scottish Government, and what has been their response?
Michael Moore
As I mentioned, I spoke to the First Minister earlier this afternoon, and I hope we will be able to meet soon to discuss the proposals that we have set out in the consultation. We have, of course, for some time been discussing with colleagues in the Scottish Government when they were going to bring forward their own proposals on a referendum. None has been forthcoming, although I hear that today they might be hurrying that up. We have provided the basis for a discussion, and I hope the two Governments can work well together for the people of Scotland.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
My right hon. Friend and a number of other hon. Members have referred to the uncertainty, particularly over jobs and investment. Can I tell my right hon. Friend that mature opinion in the far north, whether it be in favour of the United Kingdom or in favour of independence, recognises that uncertainty and wishes to see it resolved. Will he therefore ensure that his consultation goes to those of mature political opinion throughout Scotland and ignores the bleatings of those in the nationalist playpen opposite?
Michael Moore
I think everybody in Scotland, whatever their temperament, will be welcomed to be part of the consultation, but I agree with my hon. Friend that many from both sides of the debate want the clarity and the legal certainty that we are offering and to get on with the debate—which, after all, has been the reason the SNP has existed for decades. I still am not sure why it is resisting a way forward. I hope that when we discuss the detail, it will agree with us and we will resolve this and get on and have the referendum.
Ian Paisley (North Antrim) (DUP)
I welcome the forthright and determined approach that the Government are taking to ensure that the most important constitutional issue to affect our nation is being taken by the scruff of the neck, quite frankly, and driven by those on the Front Bench. Does the Minister accept that uncertainty about the Union in Northern Ireland caused decades of economic hardship, and that the sooner we get this matter resolved for the rest of the kingdom, the better; and that it is absolutely essential that the Government harness all the support from across the House—on the Opposition Benches as well as the Government Benches—and from our colleagues in Scotland to ensure that, together, we maintain the Union?
Michael Moore
May I, with all due deference to the hon. Gentleman, say that I would not, for very obvious reasons, draw a comparison necessarily between the experience in Northern Ireland and the really sensitive challenges that Northern Ireland has faced over a very long period and the experience in Scotland and the rest of the United Kingdom? Where I would agree with the hon. Gentleman is that uncertainty is bad for business; it is bad for Scots and others in the UK planning their lives and their future. I want to get that uncertainty resolved and get on with the actual referendum, during which I am confident Scotland will vote to continue to be part of the United Kingdom.
Mr Speaker
Order. I am keen to accommodate the interest of colleagues, as always, but time is pressing and we do have a Second Reading of an important Bill, so I appeal again for brevity from Back and Front Benchers alike.
Mr James Clappison (Hertsmere) (Con)
Can my right hon. Friend confirm that the UK opt-out from the single currency is an opt-out for the UK, and that new candidate countries for the European Union are committed, as a matter of law, to sign up to the introduction of the euro?
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
There has been a great deal of speculation in advance of this statement about so-called sunset clauses. Will the Secretary of State make it absolutely clear whether he has completely ruled out setting a date or setting some time scale within the order that transfers responsibility to the Scottish Government?
Michael Moore
The hon. Lady makes an important point. We have said in the consultation paper—I have said it many times already—that we want this sooner rather than later. We have shown in the draft section 30 order that it would be possible to include a date by which this should be completed. What we have not done is say what that date should be, or the time period leading up to that from the point when we debate it. So we will get on with that process, but it is important that we agree that.
Bob Stewart (Beckenham) (Con)
My constituency is in Beckenham in Kent, but I am a Scot, and I am surrounded by Scots. I have got a Stewart there, my hon. Friend the Member for Penrith and The Border (Rory Stewart), and a Stewart there, my hon. Friend the Member for Milton Keynes South (Iain Stewart). I am a Stewart; I am half a Stewart; and I have got a half-Scot beside me in the Father of the House. We are very interested in what happens in Scotland, and I would like to ask the Secretary of State how we can put our views forward properly about what happens to our ancestral homeland. [Interruption.]
Mr Speaker
Order. Having heard the question from the hon. Member for Beckenham (Bob Stewart), I am all ears; I want to hear the Secretary of State’s answer.
Michael Moore
The hon. Gentleman was right to say the Stewarts have a proud tradition in Scotland, as do many, many others—I do not wish to get into a battle of the clans. I encourage the hon. Gentleman to take a copy of the consultation, and I look forward to his contribution to it.
Gordon Banks (Ochil and South Perthshire) (Lab)
We have already heard this afternoon about the SNP’s preference for 16 and 17-year-olds to be able to vote in this one-off referendum. Can the Secretary of State tell me whether there has been any impediment, over the past five years, to the SNP Government in Holyrood lowering the voting age to 16 or 17 for Scottish council elections?
Michael Moore
The Scottish Parliament can determine all the appropriate arrangements on devolved matters. What I have said clearly today is that it cannot do that on a referendum about independence. It is important that we sort this out, but I agree that we should judge this by how people have acted rather than by what they complain about now.
Mr Ben Wallace (Wyre and Preston North) (Con)
Some 1.9 million Scots voted for Unionist parties in 2010, compared with 480,000 who voted for the Scottish National party. Westminster Scottish MPs have every right to speak for Scotland with an equal, if not greater, mandate. Has my right hon. Friend given any consideration to the tens of thousands of service personnel working in Scottish regiments or in the British Army, posted abroad or in England, and whether they will be allowed a vote or a say in the future of the United Kingdom?
Michael Moore
My hon. Friend has, of course, represented people in both Scotland and England and he speaks with authority on these matters. I entirely take his point about mandates. He raises an important point about the involvement of defence personnel and I look forward to his contribution to the consultation.
Mr Tom Harris (Glasgow South) (Lab)
I welcome today’s statement. What discussions has the Secretary of State had with Ministers about the possibility of a clarity Act, which might be seen as a somewhat less heavy-handed mechanism to force our nationalist friends to ignore their own base instinct and to offer the Scottish people the fair and honest referendum we deserve?
Michael Moore
Nobody here intends to be heavy-handed or to force anything. What we want to do is find agreement that will enable us here at Westminster to ensure that the Scottish Parliament has the powers to conduct the referendum and that it does so in a fair and decisive way. We are starting a consultation period today. I look forward to everybody contributing to it.
James Wharton (Stockton South) (Con)
The Secretary of State has indicated that he believes that only those who are on the electoral register in Scotland should get to vote in any referendum. Does that extend to registered overseas voters who remain on the Scottish register? If it does, will he look at the possibility of extending that facility to those Scots who find themselves living not abroad, but elsewhere in the United Kingdom?
Michael Moore
As I have said on a number of occasions, we are proposing that the franchise should be that which elects the Scottish Parliament.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
The leader of the Scottish Labour party called today for cross-party talks in Scotland on issues including the date of the referendum. I know that the Secretary of State has already welcomed cross-party talks. Can he confirm that the Liberal Democrats would be willing to participate, and that he in his role as Secretary of State would participate in such talks?
Michael Moore
I am sure the new Scottish Labour leader will be talking to our colleague Willie Rennie, the leader of the Scottish Liberal Democrats, but I agree with the principle. We should all be talking together so that we can ensure that we get the right process for the referendum, we make it legal, we ensure that there is a fair process beyond reproach and that we get a clear-cut outcome. That is in all our interests and I welcome the principle that we should all meet to talk.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Surely the clear message today from the statement is to the Scottish Government to engage in the consultation, because it gives the clearest opportunity for the people of Scotland to have clarity in a debate that is based on the issues and not one that is dragged through the courts.
John Robertson (Glasgow North West) (Lab)
A good new year to you, Mr Speaker, and to all Members of the House.
Fuel poverty is rising, child poverty is rising and pensioner poverty is rising. We have seen from the arrogance of Members on the Scottish National party Benches that this matter is going to end up in court. How much will the consultation and the referendum cost the British taxpayer?
Michael Moore
I reciprocate the wishes of the hon. Gentleman for a happy new year and hope we may all be in a good mood throughout it. Of course there will be a cost to any democratic process, but it is clear that we have a major historic decision to make. I am keen that we get on with that and that we do it in a clear, fair and decisive way.
Iain Stewart (Milton Keynes South) (Con)
During the consideration of the Scotland Act 1998 in this place, the then Scottish Secretary, Donald Dewar, said:
“A referendum that purported to pave the way for something that was ultra vires is itself ultra vires.”—[Official Report, 12 May 1998; Vol. 312, c. 598.]
In the absence of his being able to publish legal advice, does my right hon. Friend agree that that statement makes it perfectly clear where the law stands?
Michael Moore
As ever, my hon. Friend has been assiduous in his homework, for which I commend him. Indeed, the late sadly lost leader, Donald Dewar, when he debated it from the Dispatch Box all those years ago, set out clearly what he believed would or would not be allowable within the law. I think the Act was well written. It is clear and I invite everybody to scrutinise it. I believe that when they do, they will come to the same conclusion as we have. Therefore we need to get on and provide a legal basis for the referendum.
Stewart Hosie (Dundee East) (SNP)
The Scottish Secretary made great play of what he called uncertainty threatening business investment, so he will be aware of the Wood Mackenzie report today, which shows record North sea investment planned for 2012 and consistently high investment going beyond 2014, which rather gives the lie to the allegation that he made. Will he come clean with the House? Can he name one company that has threatened not to invest, or will he finally do the right thing and apologise for his scaremongering?
Michael Moore
The hon. Gentleman is not usually so churlish. He should understand better than almost anyone else, because he studies these things carefully, that businesses take decisions on a very long time scale. They are looking for certainty. They want confidence in the future, and as we have seen with the Citigroup report, the Institution of Mechanical Engineers and the CBI, which the last time I looked spoke for many businesses across Scotland and the UK, uncertainty is bad for business and bad for jobs. Let us get rid of that uncertainty. I cannot understand why the hon. Gentleman and his friends do not want to resolve this and get on with the real debate.
David Mowat (Warrington South) (Con)
The Secretary of State will have seen today’s press reports which say that apparently, as of this week, the Scottish First Minister is applying the finishing touches to his own referendum plans and will publish them in the next month. If that turns out to be the case, would the Secretary of State agree that at last we were making some progress?
Michael Moore
I hope that on the basis of the early conversation that we have had and the intent on my part that we should have further discussions, we will be able to consider the proposals that we have set out in detail this afternoon. It makes common sense and it is the most reasonable proposition on earth that we should get the two Governments working together to provide a legal, certain basis for the referendum, and then we can get on and have this most profound debate about our future in Scotland.
Sheila Gilmore (Edinburgh East) (Lab)
I welcome the commitment from the Secretary of State to the broadest negotiation and widest discussion within Scotland on the subject, but I hope he will agree that it is unwise to conduct the debate through statements made in the media or on television programmes, even by people as exalted as the Prime Minister.
Michael Moore
Over the coming weeks we will have many different ways of contributing to the debate, whether we are politicians or people across Scotland. I look forward, whether in my own constituency or any other part of Scotland, to people looking at the consultation, engaging with the issues and giving us their views. It is not about politicians. It is about the people of Scotland.
Glyn Davies (Montgomeryshire) (Con)
Relentless debate in Scotland led by the Scottish Government about Scottish independence causes great uncertainty throughout the United Kingdom, including in Wales. We cannot afford this distraction. Does my right hon. Friend agree that the issue should be dealt with as quickly as possible to ensure that Governments throughout the United Kingdom, including devolved Governments, concentrate and focus on growth, jobs and the things that we really need?
Mr Iain McKenzie (Inverclyde) (Lab)
It will come as no surprise that I welcome and agree with the Secretary of State’s desire to hold a referendum as soon as possible. Does he agree that the desire of the SNP Government in Scotland to hold a referendum as late as possible is an indication of their inability to answer the many, many questions that have been put to them by the Scottish people on separatism?
Michael Moore
As I have said a few times this afternoon and many times elsewhere, it is a real curiosity for a party that has always existed for one purpose to be so reticent about getting on with the debate about Scotland’s future within the United Kingdom or as a separate country. I hope that we will now get a proper, constructive, reasonable engagement where we can get on with that real debate.
Jeremy Lefroy (Stafford) (Con)
Does my right hon. Friend agree that a referendum should not involve a sterile discussion of costs and benefits or political advantage, but the great strengths that Scotland brings within the United Kingdom and that being part of the United Kingdom brings to Scotland?
Mr Mike Weir (Angus) (SNP)
In answer to an earlier question, the Secretary of State again went on about the uncertainty caused by the lack of a referendum, but when the Prime Minister’s spokesman was asked about this this morning, the only thing he could refer to was a Citigroup report, the same one that the Secretary of State referred to, which is specifically on renewables. But if he looks at it he will know that Gamesa, SG, Doosan Babcock, Mitsubishi, Aquamarine Power, EDP Renewables and Repsol—
Madam Deputy Speaker (Dawn Primarolo)
Order. The statement has been going on a long time already and Members still wish to speak. The hon. Gentleman knows very well that he should be brief.
Michael Moore
The hon. Gentleman needs to pay attention to people at the CBI and others and recognise that it is self-evident that when there is uncertainty about the constitutional future of Scotland, investment decisions will become difficult. I want to get all question of uncertainty removed from the debate. I cannot understand why they seem so reluctant to get on with it.
Jo Swinson (East Dunbartonshire) (LD)
The SNP at Holyrood has a political mandate to hold a referendum on independence, so I welcome my right hon. Friend’s plans to devolve the powers so that it can be held legally and fairly, but does he agree that page 28 of the SNP manifesto clearly shows that that mandate is for a simple yes-no question, so that there is no confusion, no legal chaos, just a decisive result, decided by the voters, not the courts?
Michael Moore
There have been a number of months where the prospect of two questions has been bandied around, although when pressed Ministers were unable to answer how one would determine which result to pay heed to if both were given yes votes, particularly if independence got, say, 51% and extra powers got 80%. Apparently, independence would have won. We need a single, clear question, and I am glad that after many months of skirting around this, the Deputy First Minister yesterday conceded that point and said she wanted a single question herself.
Graeme Morrice (Livingston) (Lab)
I welcome the Secretary of State’s statement. Could he therefore confirm that if the UK Government devolve the power to hold a referendum on separation, as he has said, to the Scottish Government, Alex Salmond would have no excuses left whatsoever for not getting on this year, or next year at the very latest, with holding a referendum on Scotland’s future?
Michael Moore
I want that referendum to take place sooner rather than later. We are offering to fix a problem that exists and make sure that we can get on and conduct that referendum in a reasonable way. I hope that we will be able to work together with the Scottish Government to get those issues resolved and get on with that debate.
Mary Macleod (Brentford and Isleworth) (Con)
I welcome the statement and congratulate the Government on their leadership on this important matter to Scotland and the UK. What reassurance has the Secretary of State had from the Scottish National party and the First Minister that they will work with the UK Government on this and accept a fair, legal and decisive referendum?
Michael Moore
I hope that the Scottish National party will engage with this. I am pretty sure that it will because when it gets the chance to study the detail, it will see that what we are offering is a very reasonable process by which we can get rid of the legal uncertainty and have a fairly conducted and decisive referendum.
Jim McGovern (Dundee West) (Lab)
Further to an earlier question about the manifesto, is the Secretary of State aware that nowhere in the SNP manifesto, as far as I am aware, does it say that a referendum will take place in the second part of the Parliament? It says only that a referendum will take place. It constantly tells us that it has an overwhelming mandate to hold a referendum in the second half of the Parliament; that is strictly not true.
Michael Moore
The manifesto was clear. It was about a straightforward question on independence, not about the timing. We believe this should happen sooner rather than later, and I look forward to the responses that we get from people across Scotland.
Fiona Bruce (Congleton) (Con)
Given the references that we have heard in the public debate on this matter to legally binding referendums and consultative referendums, does the Secretary of State agree that that is a totally false distinction?
Michael Moore
My hon. Friend has put her finger right at the heart of the issue. There is no distinction in the legal status of referendums in Scotland between one that might be considered advisory or consultative on the one hand, and a so-called legally binding one on the other. The Scottish Parliament does not have the power to have a referendum on independence. We are offering a way by which we can devolve that power on a fair and reasonable basis that will ensure that we get a clear and decisive outcome.
Katy Clark (North Ayrshire and Arran) (Lab)
The Secretary of State will be aware that the SNP is putting a significant amount of effort into fundraising, given that this is basically everything that they are all about. What does he think his role should be in ensuring that there is a full debate in Scotland? Does he agree that many people in Scotland have not really given proper consideration to the arguments for and against separation?
Michael Moore
The hon. Lady gets to the heart of the issue about how we would conduct the referendum when it takes place and the need for it to be done on a basis that is recognised and not challenged by people who are either participants or voters. It is important that spending limits and all other aspects of the rules of the process are clear. It is for that reason that we are suggesting that the Electoral Commission might be, or would be, the appropriate way to oversee the process. I hope that as we debate this people will agree on that point.
Mr Philip Hollobone (Kettering) (Con)
My constituents in Kettering deserve a say on the future make-up of the United Kingdom just as much as the Secretary of State’s constituents in Berwickshire, Roxburgh and Selkirk. The way to overcome the legal challenge is not to devolve the powers to the Scottish Government, but to hold a UK-wide yes or no referendum with the result announced in two parts, one the result from Scotland and second the result from everywhere else, because it may well be that Scotland votes to stay, but the rest of the country invites Scotland to leave.
Michael Moore
If I may say so, I regret the slightly discordant tone of my hon. Friend’s observation. I have answered the point several times already. It is important that we follow the democratically appropriate route and the internationally recognised way of doing this and allow for self-determination within Scotland on this important issue.
Dr William McCrea (South Antrim) (DUP)
I welcome the Secretary of State’s statement. Can he assure me that this Government will be robust in its defence of the Union?
Michael Moore
I am absolutely committed to Scotland remaining part of the United Kingdom. When we can get on to that debate, I will be clear in arguing the case on that, day in and day out. At the moment we have to get to that debate, and today we have offered a reasonable and straightforward way that we might do that.
Mr Russell Brown (Dumfries and Galloway) (Lab)
My hon. Friend the Member for Dundee West (Jim McGovern) is exactly right. The SNP manifesto last year made no reference whatsoever to the second half of the Parliament, but does the Secretary of State feel that if the legal powers are transferred and the SNP has a good showing in May’s local government elections, the First Minister might just take a gamble, ignore the second half of the Parliament and go for a snap referendum?
Michael Moore
I am not going to speculate on the election results in May, but I agree that we should get a clear basis for the referendum and get it sooner rather than later.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The Secretary of State has made a big issue of a point of law, but in June last year, Professor Stephen Tierney, professor of constitutional theory at Edinburgh university, said:
“The Scottish Parliament has the authority to stage a referendum.”
Does the Secretary of State agree that Scotland’s democratic Parliament does not need Westminster’s permission for a self-determination referendum, although a generous spirit from the Westminster Government would indeed be welcome?
Michael Moore
I am afraid that for reasons that should now be obvious I do not agree with the hon. Gentleman.
Nia Griffith (Llanelli) (Lab)
The Secretary of State will be aware that in Wales a convention process took place before the referendum on further powers. Can he explain exactly how we will ensure the fullest possible participation by trade unions, the business community and a genuinely representative cross-section of civic society in the consultation that he has announced?
Michael Moore
The consultation is open to everyone in Scotland and across the United Kingdom, and indeed elsewhere, should they wish to offer their opinions. I am confident that we will get a good response, and I hope that we will then be able to chart a way to getting a legal, fair and decisive referendum and a proper decision on Scotland’s place in the United Kingdom.
Mr Wayne David (Caerphilly) (Lab)
I understand that the Scottish First Minister has announced that there will be a referendum in the autumn of 2014. Will the Secretary of State give his reaction to that indication, and tell us whether it is correct?
Michael Moore
I anticipate that the debate over the timing of the referendum will continue for a long time unless we resolve the legal basis on which a referendum might take place. At the moment, no referendum initiated by the Scottish Parliament could take place. We are determined to ensure that we give the Scottish Parliament that power in the appropriate way so that we can get on with the debate as soon as possible.
Kevin Brennan (Cardiff West) (Lab)
More Welsh Members are left until the end, Madam Deputy Speaker. Is not the SNP wrong to say that there have never been binding referendums in the UK before? Was not the unsuccessful referendum on the alternative vote that the Government held last year a binding referendum?
Michael Moore
It is not a question of whether the referendum is binding, consultative, advisory or whatever other adjective the hon. Gentleman cares to apply. At the present time, the Scottish Parliament could not bring forward a referendum on a legal basis. We want to ensure that it can do so, and are offering the way that that can be done through the consultation.
Chris Bryant (Rhondda) (Lab)
It is not just the euro that an independent Scotland would have to sign up to if it wanted to join the European Union, is it? It would also have to sign up to the Schengen agreement, because European law makes it absolutely clear that that would have to happen. Would we be considering setting up border controls between England and Scotland?
Michael Moore
As the Member of Parliament who represents the longest stretch of that border, I hope that we will never be in a position in which such barriers might exist. I am confident that when we get to the proper debate, that will not be the way it ends up.
Madam Deputy Speaker (Dawn Primarolo)
Secretary of State, thank you. Some 57 Back-Bench Members participated in the statement.
Points of Order
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Madam Deputy Speaker. As you will be aware, in accordance with our parliamentary duties, all Members at one time or another table written questions, and inevitably expect a reasonable delay before they are answered. I have four written questions that have not been answered by the Department for Environment, Food and Rural Affairs, the earliest of which was tabled on 13 October 2011. Another was tabled on 17 October and the remaining two on 27 October. Will you advise me on whether there are any devices I can exploit in order to encourage the Secretary of State to ensure that I receive answers to those questions?
Madam Deputy Speaker (Dawn Primarolo)
As the hon. Gentleman will know, that is not strictly a matter for the Chair, but he has successfully exploited one of the mechanisms whereby Members can draw a matter to the attention of the Leader of the House, who is in his place. The quality of answers from Ministers is not the responsibility of the Chair, but I am sure that the Leader of the House will ensure that the appropriate message is conveyed to the Department.
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Madam Deputy Speaker. You and Mr Speaker are always very generous in accommodating Back-Benchers during ministerial statements, but Mr Speaker had to speak to a Minister earlier about the length of the initial statement that was made. Would you advise us on what advice is given to Ministers on how long their initial statements should be?
Madam Deputy Speaker
Nice try, Mr Brennan. Strictly speaking, that is a matter for whoever is in the Chair at the time and the Minister. As Mr Speaker has made clear on a number of occasions, particularly when a large number of Members wish to participate, the Chair’s expectation is that the Minister at the Dispatch Box will take due note and make a contribution of an appropriate length to ensure that everyone gets in.
Park Homes (Site Owner Licensing)
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Stephen Gilbert (St Austell and Newquay) (LD)
I beg to move,
That leave be given to bring in a Bill to make provisions to require owners of park home sites to undergo a fit and proper person test; to introduce a national licensing scheme for individual owners of park home sites; and for connected purposes.
The Bill would help to increase protections for some of the most vulnerable in our communities—those who live on park home sites—by introducing a national licensing regime and a fit and proper person test for those who seek to own such sites. As hon. Members will know, park homes are modern bungalow-style residential properties, usually sited on private estates. The park home industry is a billion pound business and there are more than 2,000 park home sites across the UK, primarily but not exclusively in rural areas such as Cornwall.
For the vast majority of the quarter of a million residents on park home sites, their park home constitutes their only home. Many residents are elderly, with a number of park home sites setting a minimum near-retirement age as a condition of residence. Indeed, the industry heavily markets itself to property-rich, but cash-poor, senior citizens. The advertising paints a picture of like-minded individuals forming idyllic communities in which they will live out their twilight years in comfort and contentment, made all the better by the equity release that moving to a park home brings. Almost all the sites are privately owned and run as profit-making businesses.
Most sites are owned by individuals, and although some site owners own a single park, others might own 20 or more. Park owners with a single site will tend to manage it themselves, but those with multiple sites might employ site managers to run individual sites on their behalf. Sites can be bought and sold at the whim of an individual. Anyone can own a park home site, and as things currently stand, a long criminal history or prior evidence of malpractice within the industry is no barrier to an individual buying and running a site. The current residents of a site have no say whatever about it being sold, or who purchases it.
I want to be absolutely clear that the majority of park home site owners conduct themselves in a professional manner and serve the people they accommodate well. However, the actions of a small but significant number of site owners who harass often vulnerable and elderly people can no longer be ignored. My Bill proposes one way of addressing this bad practice within the industry, by bringing in a national licensing regime for the owners of park home sites and a fit and proper person test. I do not believe that those measures alone will address all the problems faced by some residents, but they will be a step towards the greater protections that are desperately needed.
We should be clear that the majority of park home site owners have absolutely nothing to fear from a fit and proper person test, which in my opinion would help to drive up standards across the industry, but we need to take steps to secure a thriving and well-run park home sector that continues to provide people with sites on which they want to live, and opportunities for investment for others. I believe that a national licensing system will maintain standards, root out bad practice and ensure that sites are safe, well planned and well managed, and have appropriate facilities and services.
Indeed, the previous Government said in their March 2010 document “Park homes site licensing reform” that they were committed to
“a comprehensive licensing regime which ensures that only ‘fit and proper’ persons are engaged in the management of park homes sites and which is backed by effective enforcements tools”.
This Government’s Housing Minister said in a written ministerial statement in February last year that he was
“announcing my intention to consult on a further package of measures that could improve and modernise the licensing regime that applies to caravan and park home sites to enable local authorities to more effectively monitor and enforce licences and, therefore, better protect the many thousands of older households who live in this sector.”—[Official Report, 10 February 2011; Vol. 523, c. 15WS.]
That was welcome news in 2010, as it was the year after, but so far there has been little sign of a consultation emerging from the Government. I am delighted that my right hon. Friend the Secretary of State for Communities and Local Government is in his place to hear me tell the House that the one thing that park home residents across the country are saying to us is that they need the Government to get on with this.
In the absence of further action by the Government, my Bill seeks to help the two in every three park home residents who report living in unacceptable conditions. Almost half of all residents report living under the regime of an unscrupulous park owner. It aims to build on the work of hon. Members from both sides of the House in raising this important issue, notably my hon. Friends the Members for Mid Dorset and North Poole (Annette Brooke) and for Romsey and Southampton North (Caroline Nokes). I am delighted that the Bill has attracted cross-party support, and note that other Members—such as my hon. Friend the Member for Wyre and Preston North (Mr Wallace)—also wanted to have their names on the Bill, but could not be accommodated. It is clear that there is a desire on both sides of the House to sort out the problems that for too long have bedevilled the park homes industry.
Problems in the park homes sector occur because the current system of regulation and the industry’s economics make it an attractive proposition to a number of rogue site owners who are intent on making substantial sums of money. When taking over a site of, say, 30 park homes, a rogue site owner only needs to replace 10 existing homes with new ones to make a significant profit. Of course, the problem for the rogue site owner in achieving that is that there might not be 10 individuals who want to leave the site. Rogue owners then begin a process of forcing residents to leave, or to sell their park homes to the site owner on advantageous terms.
Practices that are, sadly, commonplace include the vetoing of all sales of homes within the site, including any that are part way through. Although regulations allow home owners to challenge the unreasonable rejection of prospective purchasers, the reality is that most do not have the emotional or financial resources to take the site owner through the court process. In addition, the length of time that it would inevitably take for that process to be completed would no doubt result in the loss of that prospective purchaser.
The Park Home Owners Justice campaign, ably led by Sonia McColl, reports that rouge site owners visit local estate agents who market park homes to tell them that they will not allow any homes on their site to be sold. Rogue site owners also intercept prospective purchasers visiting the site to put them off, by rubbishing either the home or even the site in general, and they bully residents by telling them their homes are defective in some way, and threaten to evict them from the site unless their homes are brought up to standard.
It is reported that rogue owners tell residents that improvements to their park homes are illegal when they are not. Many park home residents report being subject to harassment, intimidation, abuse, and, in the worst cases, arson of their park homes. Through such abuses, a site owner effectively traps residents in their homes while creating a climate of fear. Many residents are frail and vulnerable, and their physical and mental health can be easily impacted on. Eventually, the suffering reaches the extent that, desperate to get out, the resident will sell to the site owner for a fraction of the park home’s market value. There is evidence of rogue site owners then buying further sites where the same tactics of abuse are brought to bear on a different group of luckless residents.
My Bill seeks to create additional protections for residents of park homes by creating a two-tier licensing regime. In an era of localism, it is right that local authorities should be responsible for issuing and monitoring the site licence, which would cover such matters as the site’s suitability, amenities and services. In line with the recommendation from the trade and the two national residents associations in response to the previous Government’s consultation, there should be a national licensing authority, the role of which would be to decide whether an applicant to own a park home site was a “fit and proper person”, and suitable to manage the accommodation of others. I suggest that that responsibility could sit with the newly empowered residential property tribunal service. If so, the national authority would issue a personal licence. If the applicant were refused a licence, he would not be able to manage any park home site anywhere.
It is that two-tier approach, as part of a package of other measures that I expect from the Government, that I wish to commend to the House. Those of us who have significant numbers of park homes in our communities know only too well that budget pressures mean local authorities often do not resource park home issues properly at the moment. We also know that many environmental health officers do not have the expertise in legal and financial matters in the context of park homes, and are not best placed to assess someone’s suitability to own and manage a site. A national regime would remove the chance of duplication in the work of local authorities, and therefore reduce the costs of introducing additional protection for park home residents, as well as ensure a consistent level of national protection for all residents of park homes.
I am sure that all hon. Members agree that we need to ensure that everybody can enjoy their home unfettered, and I commend my Bill to the House.
Mr Christopher Chope (Christchurch) (Con)
I just want to put down a marker. Not everybody in the House thinks that the solution to this problem, which the hon. Member for St Austell and Newquay (Stephen Gilbert) rightly identifies, is the one that he proposes.
As chairman of the all-party parliamentary group on mobile homes, I am well aware of the problems with park homes, particularly regarding their sale. Indeed, I introduced the Sale of Park Homes Bill, which sadly has not yet received a Second Reading. Not only that, but it has not even been printed, because I have been waiting until I have seen the consultation paper that the Government said they would publish last year. The Minister for Housing and Local Government is sitting on the Front Bench, and I hope that that consultation paper, which he has promised, will be published very soon. When it is, I anticipate that it will show that the solution—
Madam Deputy Speaker (Dawn Primarolo)
Order. Mr Chope, are you speaking in opposition to the ten-minute rule Bill?
Mr Chope
Yes, Madam Deputy Speaker, I am speaking against the Bill because the hon. Member for St Austell and Newquay does not have the right solution to the problem. He has identified a problem that exists in many hon. Members’ constituencies, but that does not mean that any legislation that purports to address it will deliver. That is why I am speaking against the Bill. I am putting down a marker on the Bill, but at the same time encouraging the Minister to produce the consultation paper.
My feeling is that the problem would be better addressed by focusing on the sale of park homes rather than by introducing an inevitably bureaucratic and heavy-handed licensing system. As the hon. Gentleman said, a very large proportion of park home site owners are reasonable and supported by local residents. Why should those good park home site owners be put through that hoop? Why should they have an extra bureaucratic burden placed upon them, which ultimately must be paid for by the hard-pressed residents to whom he referred?
I suggest that, like many ideas that come before the House, this idea would mean introducing disproportionate and heavy-handed regulation to address a problem. How would the idea of a fit and proper person test, which is at the core of the hon. Gentleman’s proposal, work in practice? Are we saying that only people with criminal records would be excluded from becoming park home site owners, or would exclusion be extended more widely? How will we deal with corporate bodies and companies? We know that many rogue directors run companies up and down the country. How would we deal with them? Would his solution of a fit and proper person test address that?
I am urging on the hon. Gentleman the idea that there might be better ways to address the problem than having the knee-jerk reaction of saying, “Let’s have more regulation, and a new fit and proper person test that everybody must go through.” In my submission, that test has not been properly analysed. I shall not press the motion to a Division tonight, but the Bill might be printed, and then he might see that the consultation paper has a better solution, along the lines I have suggested. That could be the way forward.
I will not speak any longer, because there is a lot of pressure on the time of the House, but I thought it would be wrong to allow this proposal to go through on the nod just because everybody agrees that there is a problem to be addressed. Hon. Members must be assured in their own minds that the solution proposed is the right one.
Question put and agreed to.
Ordered,
That Stephen Gilbert, Mr Robert Buckland, Andrew George, Stephen Lloyd, Tessa Munt, Sheryll Murray, Caroline Nokes, Dan Rogerson, Mr Adrian Sanders, Heather Wheeler, Dr Sarah Wollaston and Gordon Banks present the Bill.
Stephen Gilbert accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 30 March, and to be printed (Bill 268).
Local Government Finance Bill
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
21:59 - The House divided: - Ayes: 332 / Noes: 232 - Question accordingly agreed to.
22:15 - The House divided: - Ayes: 321 / Noes: 234 - Question accordingly agreed to.
22:29 - The House divided: - Ayes: 314 / Noes: 189 - Question accordingly agreed to.
22:42 - The House divided: - Ayes: 312 / Noes: 175 - Question accordingly agreed to.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I beg to move, That the Bill be now read a Second time.
It is a relief to be called after all that waiting, Madam Deputy Speaker.
The coalition agreement committed the Government to supporting sustainable growth and enterprise, balanced across the country. It also pledged the radical devolution of power and greater financial autonomy to local government. This Bill delivers on those promises. It aims to introduce much-needed reforms to make England’s local government finance system more effective at supporting local jobs, local firms and local enterprises. This is not just about redistributing a pot of cash differently; it is about providing the best possible chances to foster more growth, generate more cash and make a bigger pot.
The case for change is widely recognised. The OECD has called the English local government finance system one of the most centralised in the world. The Labour Government knew that, but failed to deliver on reform. There were Green Papers, White Papers, the “Balance of Funding” report, the Lyons inquiry and, if that was not enough, the Labour party manifesto at the last general election boldly pledged another commission on local government finance. What little reform was introduced, such as the so-called local authority business growth incentive scheme, was timid, inconsistent and ineffective. The only thing Labour managed to do was to double council tax and halve local services, such as bin collections—pay more and get less.
Where others have failed to deliver, however, the coalition is ready to act. Nowhere is the need for change more apparent than in relation to business rates. Currently, councils collect rates for local businesses, but they are no more than the agents for central Government. No sooner is the cash in than Whitehall whisks it away. Whitehall feeds the figures into a very complex formula. Each council waits with bated breath to see how much it will get back. The 160-page local government finance report requires a detailed knowledge of multiple regression to fathom it out.
The system creates a perverse regime of incentives. Councils that work hardest to boost local businesses do not see their efforts reflected in the state of their finances. In fact, local economies that become more successful can effectively see their central Government grant cut. The regime actively encouraged councils to talk down their area, to mask their success and to amplify their deprivation; it breeds a begging-bowl mentality and a race to the bottom. Surely, now more than ever, we should welcome growth and reward incentives.
There is some criticism that Labour failed to deliver on its election pledges. Well, we are here to help. In the Localism Act 2011, we introduced a general power of competence, implementing a pledge in the 1983 Labour party manifesto. However, we have now moved on to the 1997 Labour party manifesto, and we are moving towards the localisation of business rates. The Government believe that councils should have every possible incentive to encourage local business, support local jobs and create the conditions for the local economy to thrive.
The Bill paves the way to repatriating business rates. We want to give councils a greater proportion of the rates they raise locally. Every council that grows its business rate base can be sure that it will see an increase in its income, compared to the status quo. Putting in place the right incentives gives every council every possible reason to go for growth, which creates the potential to raise more cash overall to invest in local services and local community priorities. Of course, we have heard a few grumbles already.
Mr Kevan Jones (North Durham) (Lab)
I spent nearly 12 years in local government, and I accept that it is an important catalyst for encouraging local economic development, but it is not the only one. There is a huge disadvantage in all this for my constituents, compared, for example, with constituents in south-east England. Surely, in any consideration of local government finance, the disparities between the economies of such areas should be taken into account.
Mr Pickles
Frankly, I am amazed by that contribution, because Durham will be one of the big beneficiaries of the scheme. Had this system been in place, Durham would undoubtedly have more money in its coffers. I strongly urge the hon. Gentleman, for whom I have enormous respect and affection, to talk up Durham, because it will do very well under this scheme.
Helen Goodman (Bishop Auckland) (Lab)
I am afraid the Secretary of State’s view is not shared by Durham county council, which believes it will lose £100 million, in contrast to the City of London, which we all understand will see its business rate take increase 140%.
Mr Pickles
The hon. Lady needs to look at the facts. Durham will be a beneficiary. The level of support it will get in terms of top-up—in terms of its actual growth —will increase, and that will give the people of Durham considerable respect and pride.
Let us just deal with some of these grumbles. Some are worried that the reforms might lead to polarisation and that deprived areas might fall behind. I can entirely understand—we have seen examples of this today—that people are reluctant to see change. It is always hard to let go of a security blanket, but we have been clear that we will ensure the hardwiring of safeguards for the most vulnerable in these reforms. Protections, including a system of tariffs and top-ups, will ensure that councils that start from a low business rate can still meet people’s needs. We will have a levy on authorities that see a disproportionate benefit, with a safety net for authorities that see their business rates fall significantly.
Mark Field (Cities of London and Westminster) (Con)
I very much welcome the principle of allowing local authorities to retain a proportion of their business rate. That is a very positive move. My right hon. Friend has made the case that he is being rather pragmatic, but perhaps he will go into a little detail about two areas where I am concerned he is perhaps being overly pragmatic: growth for inflationary reasons and growth where there has been a revaluation. As he knows, there has been significant revaluation in recent years, so why cannot some of that revaluation, where a substantial part has been in a particular local authority area, be used as an element of growth for the purposes of the business rate adjustment that is being brought into play?
Mr Pickles
Of course, in that process of revaluation, we would seek to adjust the multiplier so that it had a neutral effect on the amount. What we are talking about is ensuring that, between periods of revaluation, an authority that grows above the national average can actually bank that. However, some authorities will clearly get a disproportionately large increase, and we have a levy, through which we seek to take that sum away and to apply it to the safety net.
Alok Sharma (Reading West) (Con)
I welcome these reforms, which will incentivise local authorities and local government to encourage growth, but will the Secretary of State confirm that they will not allow some local authorities to raise business rates on already struggling businesses?
Mr Pickles
I am happy to confirm that fact to my hon. Friend, because he raises an important point about local businesses needing a degree of certainty. Of course, the Secretary of State—the person holding my position—will set the multiplier and the sum.
There is something strange about all the objections, some of which we have heard already, in that they betray a lack of faith in the people whom we represent. No one area has a monopoly on the formula for growth. Economic success is not a southern phenomenon.
Mr Pickles
I do not know whether colleagues were listening but I heard an Opposition Member say that economic success was a southern phenomenon. If that is what Opposition Members think, they should seriously consider whether they are doing their electorate a service.
If our reforms had been in place over the past five years—since the last revaluation cycle—places such as Liverpool, Doncaster, Durham and north and south Tyneside would have benefited, because their growth in business rates outstripped the national average.
Most of all, however, the grumblers have missed the key point. This is not simply about redistributing the proceeds of growth. If these reforms lead to every council working as hard as possible to help business to thrive, there is the potential to increase overall growth.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
As part of the south-east phenomenon—the area that I represent covers Canary Wharf and the London borough of Tower Hamlets—my constituency would naturally, I assume, be a winner from these reforms. Has the Secretary of State seen the briefing issued today by London Councils to London MPs? It welcomes the retention of part of the business rate but then states:
“However, the Bill as drafted creates a fiendishly complex system in which the level of the business rate incentive is uncertain and unpredictable”.
Will he respond to that concern from London Councils?
Mr Pickles
Yes, of course. The idea is to give the maximum incentive to councils. That is how the system is being devised. However, it is much simpler than the existing system, which is just about impenetrable. Indeed, London Councils considered that point some time ago when it described the four—[Interruption.] Ah, I have it in front of me. How very helpful! This is marvellous. Bob always comes up trumps. This quote comes from the London Councils’ report, “Four Block Muddle”:
“The current formula grant system…lacks transparency and is inherently unstable and unpredictable, generating fluctuations in grant allocation that defy logic… Even finance experts, let alone members of the public, struggle to understand the working of this complex system.”
So here we are introducing a much better system, and, to coin a phrase, I would have expected local councils to rejoice, rejoice, rejoice.
Mr Pickles
I give way to the right hon. Gentleman, the architect of our present system.
Mr Raynsford
I am grateful to the Secretary of State but I have to say that many other people besides me were architects of the existing system. However, given that doubts are being expressed by many local authorities about whether the provisions in the Bill will achieve the objectives that the Secretary of State has set out, will he, in words of one syllable and in plain English, explain the provisions in the first seven clauses of the Bill, which to most people are absolutely incomprehensible gobbledegook?
Mr Pickles
I feel a little stung because I have always been most helpful to the right hon. Gentleman.
Clause 1 deals with the local retention of the non-business rate and provides for the framework of the rate retention scheme in England by inserting a new schedule 7B into the Local Government Finance Act 1988. Clause 2, on the revenue support grant, gives effect to schedule 2, dealing with the amendment of provisions about revenue support grant in England. Clause 3, on additional grant, amends the 1988 Act to remove the provision for the Secretary of State to pay additional grant to local authorities in England. It also makes consequential amendments to the Local Government Finance Act 1992 and the Greater London Authority Act 1999. Clause 4, on the local government grant, amends section 100 of the 1999 Act so that from 1 April 2013 the Secretary of State may pay a general grant to the Greater London authority for a financial year but will not be required to do so. I think that that covers the point, although we could go through the entire Bill—there are only 16 clauses.
Bob Blackman (Harrow East) (Con)
I thank my right hon. Friend for giving way on this key issue. One of the key concerns for people raising additional business rates in the future will be that they gain from the benefit of that growth. I welcome that proposal. However, there is another problem. Will he confirm that if a major employer or site of employment closes down within the first two years of operation, the local authority will not lose the business rate income?
Mr Pickles
My hon. Friend raises an important point about the very nature of business rates. There is a high degree of buoyancy within the system and there can be sudden movements, particularly where firms move out and following claims for revaluation, which is why we have built into the system adjustments to iron out those things. We have suggested to local authorities— but it will be entirely a matter for them—that they pool their resources in order to get over those fluctuations.
I shall move from the incentive effect to another aspect of the Bill: the introduction of tax increment finance. This was recommended in the 2006 Barker report and promised in the 2009 pre-Budget report but never delivered by Labour. For the first time, councils will have the ability to borrow safely and sustainably against the anticipated increase in business rates. That will give them a new means by which to fund infrastructure, attract investors and secure jobs for local people.
We are determined that the transition to the new system should be effective, fair and workable. Over the summer, we consulted widely, and we heard loud and clear that small firms, charities and voluntary groups, which play such an important role in local life, should not face adverse changes to their bills. Local firms can rest assured that this is not a means of increasing their bills by stealth; rather it is a measure to help local businesses. The Bill also proposes a replacement for council tax benefit.
John Healey (Wentworth and Dearne) (Lab)
I am grateful to the Secretary of State for giving way on the point about tax increment financing schemes, of which I have been a strong supporter from the outset. Will he confirm that the area and rate take in the TIFs area will be ring-fenced and protected from levies and any reset? Without that confirmation, there will not be the confidence and certainty about the revenue stream necessary to allow the borrowing to take place for the up-front investment.
Mr Pickles
The right hon. Gentleman makes an important point. He will know, because he has taken an interest, that we are offering two types of TIF. TIF 1 will be subject to the levy and the top-up, but TIF 2 would not be subject to either, so it would be possible to borrow over a longer period than the reset.
Mr Pickles
Before the right hon. Gentleman responds, I would like to add something else. I can see that we are going to have one of these really interesting discussions—we might even get on to hereditaments in a little while. Because TIF 2 would affect the levy pot, as well as the level of public borrowing, we will clearly need a degree of Treasury co-operation, but authorities can proceed with TIF 1 straight away.
John Healey
I wish the Secretary of State good luck in seeking that Treasury co-operation. He will understand that the time horizon for TIFs stretches beyond one decade, and sometimes beyond two. He said that TIF 2 would be ring-fenced and protected from the levy; can he also say whether it will be ring-fenced and protected from any reset?
Mr Pickles
The whole point about TIF 2 is that it goes beyond a reset. That is why there needs to be a degree of co-operation from Treasury colleagues. The period for TIF 1, of course, is potentially 10 years. We will encourage local authorities to work together on TIFs and pool their resources—I think I recall the right hon. Gentleman speaking about this some time ago—which will be enormously liberating for them.
The Bill also sets out a replacement for council tax benefit, which is essential in supporting those who, through no fault of their own, struggle to pay their council tax bills. However, rather than having a national, one-size-fits-all scheme, designed and directed by Whitehall, we propose that councils themselves should set up council tax support at the local level. We will give them the flexibility to design schemes that reflect local priorities. Tailor-made approaches will also be essential to making the 10% saving, which is an important component of the plan for reducing the deficit inherited from Labour. Some councils are already considering how they might exercise the new powers and discretions. Westminster city council, for example, is looking into the idea of social contracts, such as linking council tax benefit with obeying the law, actively seeking employment and undertaking voluntary work. That is fundamentally no different from councils such as Manchester and Newham, which are seeking to prioritise individuals in work for council house waiting lists, ending the “something for nothing” culture while providing a safety net for the vulnerable. I believe that benefits should provide the right incentive to get people back to work and to reward social responsibility.
Mr Clive Betts (Sheffield South East) (Lab)
The reality, surely, is that on day one councils will receive what they are currently paying out in council tax benefit, minus 10%. They will have no choice about where that 10% comes from, because pensioners will be protected—we might support that—as will people in work, because councils have to observe the 65% tapers under the universal credit. In the end, therefore, the totality of those cuts will fall on the unemployed of working age, leading to probably up to 20% to 30% of their benefit being withdrawn. If unemployment goes up and more people claim council tax benefit, that will mean either money drawn from other services to fund it or further cuts for those on council tax benefit who are unemployed.
Mr Pickles
The hon. Gentleman makes a reasonable point, but I would put it this way:
“Beveridge would have wanted determined action from government to get communities working once again, not least to bring down that benefits bill to help pay…the national debt…He would have wanted reform that was tough-minded, and asked everyone to work hard to find a job.”
That seems a very reasonable way to express it; indeed, those are the very words of the shadow Secretary of State for Communities and Local Government, in his article in The Guardian last week. I am pleased that that approach was also endorsed by the Leader of the Opposition on the “Today” programme this morning, so frankly, I am not entirely sure that I understand the points being made by Opposition hon. Ladies and Gentlemen.
Mark Field
I very much support the idea of innovation and flair, and allowing for inventiveness, which will certainly apply positively to Westminster city council and all who live in the area. However, my right hon. Friend will be aware that, in the case of some local authorities that try to adopt the new powers, the scheme will perhaps work somewhat less well. Will there be any residual power in the hands of the Department or the Secretary of State to intervene where such local authorities fail to provide the lead that we would all wish for?
Mr Pickles
Local authorities are statutorily obliged to deliver a scheme, and that scheme needs to be approved, but we need to have confidence in them. We are talking about a substantial and significant effect of localism. We took the decision to give more powers to local authorities, and we need to be able to trust them.
However, hon. Ladies and Gentlemen opposite have been saying that their leader did not say those words. I happen to have a transcript from the “Today” programme. He was asked a question about welfare, and this is what the right hon. Gentleman said: there do need to be “big changes”, with a
“greater sense of responsibility in the system...Anybody who can work should work”.
We have to
“have sanctions in our system…I…see…a minority…of people on benefits”
who have been given a
“false sense of security…The Beveridge system was about saying people should be rewarded…for contributions.”
The right hon. Gentleman said that there should always be a safety net, and that
“In housing…need matters, but…you should also be rewarded with extra points…if you…work or volunteer,”
saying that some
“councils…are starting to do this…I am not against a cap”
on benefits. My word, how out of touch hon. Ladies and Gentlemen opposite are with what their leader is saying!
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the Secretary of State give way?
Mr Pickles
In a moment.
Part of the Opposition now concedes that the housing benefit bill is too big and needs reform. I hope that they would accept that the sister benefit—council tax benefit—should also be reformed. The reform must take place to help reduce the budget deficit. As the shadow Secretary of State for Defence conceded last week, a credible Opposition should reject “shallow and temporary” populism and accept the need for spending reductions. I am very sorry that Labour Members seem to have rejected that advice and that of their leader, given so recently.
We should all agree that reforms must also offer proper protection for vulnerable groups who cannot return to work. We will therefore be putting in place special safeguards for low-income pensioners, who will continue to be eligible for support. As championed by the Royal British Legion, this Bill will make council tax support a rebate—a discount—rather than a benefit. The previous Government changed the law to rename council tax benefit, but never enacted their own provisions. The Bill also allows changes in council tax to help reduce bills for hard-working families and pensioners. Homes left empty for the long term can be a blight on a neighbourhood. It is immensely frustrating for people who desperately need housing to see houses sitting idle, and for communities to have to tolerate the eyesore and crime that such houses cause. Currently, even when houses have been left empty for many months, councils can charge no more than the normal rate of council tax. We propose that councils should have the option of charging a higher rate of council tax when homes have been empty for more than two years. That will provide a stronger incentive for the owners to bring such homes back into use and end empty property blight.
Alongside the Bill, we have consulted on other proposed changes to council tax—changes that do not require primary legislation. They include reforms to council tax on second homes. Currently, councils are obliged to charge a reduced rate on second homes, of between 10% to 50%. We propose to allow authorities to remove this special tax break completely, treating everyone equally and fairly. Taken together, those flexibilities on council tax have the potential to reduce families’ council tax bills by £20 a year.
Some have asked whether it is time to review other discounts and exemptions. The Intergenerational Foundation, endorsed by the shadow Minister for London, called for an end to the single-person discount, which would tax the elderly out of their homes. We have looked at the case for ending the single-person discount, and we have rejected it. This Government have no intention of imposing a new stealth tax on 8 million single persons; nor will we increase the tax on hard-working people who pay their taxes, who save and who invest in their homes.
The Bill stands alongside the action that this Government have taken to make local finance fairer and more effective, including the two-year freeze on council tax, the cancellation of any council tax revaluation, the abolition of the new bin taxes, and the introduction of new rights for residents to veto excessive council tax rises. The measures that we are introducing today will build on those improvements. After years of indecision and inaction by Labour, these measures represent a positive and practical step forward. The Bill will help to create the right conditions for growth, reward councils that boost the economy, and make local government finance more effective and fairer for all. I commend it to the House.
Hilary Benn (Leeds Central) (Lab)
I should like to begin by wishing the Secretary of State—and, indeed, you and all other Members, Madam Deputy Speaker—a happy new year. I am sure that our return to the House has been looked forward to with even greater anticipation than usual, given that the first piece of legislation that we are to address is the Local Government Finance Bill.
The Secretary of State touched on the fact that local government funding has long been debated and much argued over. At the heart of the matter is the age-old question, which was highlighted by the Layfield report in the 1970s, of whether central or local government should take the decisions. That question has never been fully resolved because the answer depends on the decisions involved and on what we are trying to achieve. Partly for that reason, Bills proposing fundamental changes to local government finance have not come along very often. The previous two were the Bill that brought in the poll tax, which should stand as a warning of what happens when a Conservative Government get things spectacularly wrong, and the one that replaced it with the council tax. That experience should remind all of us that how we fund local authorities and the services that they provide to all our communities is a matter of the greatest importance.
The Secretary of State reminded us of what the coalition agreement said about a radical devolution of power and giving greater financial autonomy to local government. Indeed, he also referred to his words of last July, when he said that councils would no longer have to come to him with a begging bowl. He has set a very high bar against which his Bill is going to be judged.
Let me start by examining the way in which the Bill is being handled, which is the subject of tonight’s programme motion. The local government resource review was first announced in the summer of 2010. The terms of reference were published in March last year. I recognise that there has been consultation on the proposals, but that consultation has simply not been carried through into the consideration of the Bill. The Bill was published on 19 December, just before the Christmas recess. We are having the Second Reading debate today, just two sitting days later, and we did not start the debate until 20 minutes to 7 in the evening.
The Government seem determined to take all the stages of the Bill on the Floor of the House, not because of the nature of the Bill but, as everyone knows, because the business managers are desperately trying to fill up time in the Chamber following their mishandling of the long parliamentary Session. They are not scheduling it in this way as a matter of precedent. Neither the Act that created the poll tax nor the one that replaced it with the council tax—the two Acts that this Bill, in the main, amends—had their Committee stages on the Floor of the House; they went into Committee. This Bill should also go into Committee. That is why we will vote against the programme motion.
By not allowing the Bill to go into Committee—[Interruption.] No, I hope that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) will listen to me. If the Bill is not allowed to go into Committee, there will be no opportunity for wider scrutiny of what the Bill—as opposed to the consultation —says. There will be no pre-legislative scrutiny of the Bill, and there will be no evidence sessions. Nor have we seen any of the regulations in draft. This is a pretty shoddy way for a Government who say that they support pre-legislative scrutiny and evidence sessions to deal with the scrutiny of a Bill.
On the substance of the Bill, the Secretary of State has advanced three main reasons for the changes—namely, that the present system is too complex, that it gives Governments too much power and that it does not provide sufficient incentive to local councils to develop their economies. I want to address each of those points in turn.
I accept that the current system is complex, but the truth is that any system will have a degree of complexity if it is to take account of the differing needs and circumstances of different communities. That is why we have complexity in the system. The alternative would be to leave councils and communities to sink or swim, saying, “Right—you take what you can in council tax and business rates; the Government will not get involved at all.” I do not support that.
Many of us, however, are in favour of as much localisation as possible, and, in principle, of allowing councils genuinely to benefit from business rate growth. However, those who put forward these proposals have an obligation to come up with a system that meets a number of tests. Those tests must determine whether the proposals will actually put more power into the hands of the councils, whether they will provide the right incentives, and whether resources will be distributed fairly. They must also determine whether councils will be reasonably certain about the money that they will get, and whether they will get the right help to enable them to meet local need and changing circumstances.
The problem with the Bill, and the reason that we will oppose it tonight, is that it does not give the reassurance that many people are looking for on those five fundamental principles, either on local government funding or on the localisation of council tax benefit. There is no guarantee that any council will not be worse off, except in the first year. It is unclear exactly how much incentive will be offered. As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) suggested, the Bill will replace one complicated system with another that is, in the words of London Councils, “fiendishly complex”. One might think that that body would be arguing strongly in favour of these measures, given its position on business rates. Lastly, the Bill will give the Government a huge amount of control over how the money is distributed and how the system works, even though they claim that they want to devolve power.
When we read the Bill, which is supposed to be about putting local authorities in charge, what is really striking is the amount of power that it puts in the hands of the Secretary of State.
Hilary Benn
Will the hon. Gentleman bear with me for a moment?
Under the Bill, the Secretary of State will determine the baseline for every local authority, including, in effect, what he thinks every council needs to spend. He will decide how much business rate income central Government will take and how much will be left with local authorities. He will be able to change the central share from year to year, and to specify the tariff or top-up payment for every local authority in England. He will also decide how much any council must pay him in levy in respect of disproportionate gains in business rate income—and he will decide what “disproportionate” means.
Hilary Benn
Will my hon. Friend bear with me for a moment?
The Secretary of State will determine safety net payments, and decide how much of the remaining balance in the levy account may be distributed to one or more authorities. He will determine how much billing authorities must pay to major precepting bodies. He will designate pooling areas, and decide which groups of people must receive a council tax reduction. He will decide which classes of dwelling cannot be charged extra council tax, taking account of the characteristics and circumstances of any person liable—whatever that means. He will decide which areas are to be enterprise zones, and issue regulations to designate TIF areas. And in case all that is not enough, in clause 14(2) he gives himself a Henry VIII power that will allow him to amend, repeal or revoke any legislation he wants. That does not sound like localisation to me.
Mr Kevan Jones
I agree with my right hon. Friend about the centralisation of powers. The one power that is being given away to local authorities is the administration of council tax benefit, where local councils will have the invidious task of cutting council tax benefit to individuals. The Secretary of State is basically giving away the unpopular decisions, making sure that local people get the impression that local councils and not the Secretary of State are to blame for the cuts.
Hilary Benn
My hon. Friend is absolutely right, anticipating one or two points I intend to make later in my speech.
George Hollingbery (Meon Valley) (Con)
The right hon. Gentleman really must make his mind up. On the one hand, he rejects a system red in tooth and claw; on the other, he wants the system to be incredibly fair. Can he explain by what mechanism he and his party would make the system fair, other than by some central interference?
Hilary Benn
I would merely say this. First, if councils had a choice between the system under the last Labour Government and the resources made available then, and the cuts imposed over the last two years and the system offered now, I suspect that they would say, “We prefer the old system.” Secondly, the Secretary of State argues that this is all about giving away power and responsibility, but I am pointing out—I can understand why the hon. Member for Meon Valley (George Hollingbery) and his colleagues get irritated—the huge number of powers that he is keeping for himself to shape the whole system and how it works. Given that the Secretary of State has all this power, I gently say that I doubt very much whether the local authority begging bowl is going to disappear any time soon. The right hon. Gentleman has form on this, however. In his equally misnamed Localism Bill, he took for himself more than 100 powers. He says that he is passing down the levers of power, but the truth is that he is hanging on to them very tightly.
Ben Gummer
The right hon. Gentleman professes to be in favour of localism and to want to see it in local government, but he was a prominent member of the previous Government who for 13 years produced numerous White Papers, manifesto commitments, and the entire Lyons report, which took three years to compile—yet nothing was produced or brought before this House over that period to localise business rates. He nevertheless stands up here and complains about what is being done.
Hilary Benn
First of all, if we are talking about centralisation, the hon. Gentleman needs to think about who nationalised business rates. It was his party. Who was it who abolished London-wide government and who made a mess of the poll tax? In all honesty, I say that making a change in haste in the wrong way is done at one’s peril. The warning of that is provided in the poll tax. If we look back at the debates when the poll tax was being argued for, we find Ministers arguing that this was the most wonderful thing. The people who have really made a mess of local government financing in this country are the Conservatives. Local government would much prefer to have the resources they had under the 13 years of the Labour Government than what they are experiencing under the current Government.
The point is this. It is not about whether we trust local councils or local communities. The question people looking at this Bill will be asking themselves—and, to judge by the consultation, they are—is whether they trust this Government and whether they trust this Secretary of State to use all these powers in a fair way. To judge by what has been done so far, there is not much room for confidence. We know that this Bill is being introduced at a time when local authorities are facing unprecedented cuts. Cuts do have to be made—[Interruption.] Well, I have said that on a number of occasions, but there is no excuse, no rationale and, so far, no justification for why these cuts are being applied in such an unfair way to communities.
As the House knows, one shocking statistic from SIGOMA—special interest group of municipal authorities —tells us everything we need to know about this Government’s idea of fairness. It is the fact that the 10% most deprived upper-tier authorities are facing a reduction in their spending power that is nearly four times greater than that faced by the 10% least deprived authorities.
Let us take just one example from figures produced by Newcastle city council. For every local authority, it looked at the cuts for 2010-11, 2011-12, 2012-13, transition and council tax freeze grant and the provisional new homes bonus allocations. The figures show that Basingstoke and Deane authority will see a cumulative gain of £6.30 per person, whereas Knowsley will see a cumulative loss of £227.35 per person. If that is not balancing the books on the backs of the poor, I do not know what is. What possible justification can there be for such unfairness? When I asked the right hon. Gentleman about it at Communities and Local Government questions recently, all he could do was bluster, so how can councils have any confidence that they are going to be treated fairly under the Bill, particularly for communities where there is a great deal of deprivation, communities with fewer opportunities for business rate growth and communities where a lot of people cannot find a job?
Mr Marcus Jones (Nuneaton) (Con)
The right hon. Gentleman extols the virtues and fairness that there seem to be have been in the local government finance regime during the period of the Labour Government. Can he explain, then, why the gap between rich and poor widened during those 13 years?
Hilary Benn
That is not true in relation to local authorities such as my authority. For example, the number of children in poverty across the country was reduced by 600,000, while this Government is in the process of increasing child poverty, as the hon. Gentleman knows, so I am not taking any lectures from him about how to tackle inequality and unfairness.
The truth is that councils are worried that under this Bill, as SIGOMA warns,
“the gap between more prosperous and less well-off authorities will widen as a result of the policy”.
Local Government Yorkshire and Humber fears that
“the Government’s proposals are...likely to favour urban over rural areas and retail development over manufacturing growth…we could easily lose out.”
Those are the concerns that the Secretary of State must address.
Let me deal with the second argument we have heard—that the changes will incentivise economic development. Here, I have a request for the Secretary of State. It would be really helpful if he could clear up the confusion he has created about the Government’s view on whether local authorities want to see economic growth in their areas.
I ask that because in paragraph 1.16 of his Department’s response to the consultation on business rate retention, it says:
“We know that local authorities are keen to grow their local economies.”
I agree with that, which is exactly what councils up and down the country want and seek. So can the right hon. Gentleman explain why the impact assessment published by his Department at the very same time on the very same day says the very opposite—that
“local authorities are generally reluctant to....promote economic growth”?
These are two completely contradictory statements—
“keen to grow their local economies”
in one document, and
“reluctant to promote economic growth”
in the other. They cannot both be true, so which one represents the Government’s view? I am happy to give way to the Secretary of State for him to explain. Well, there is no answer. It would be helpful if documents were read a bit more carefully before they were published.
On the question of incentives, I note that business rate localisation—the term that used to be used—has now become business rate retention. No doubt that is because it has become clear that the Government will take a proportion of business rate income in the form of the central share payment. In effect, it will allow the Government to top-slice such income and, as the Secretary of State has said, to control local government spending.
Before anyone on the Government Benches says that all that money will be returned to local government, the House needs to be aware that although that sounds good, the money is of course fungible across Government. Using that income from retained business rates to pay for other grants to local government will, in effect, create a saving for the Government because it will relieve the Treasury of having to find the money from elsewhere. So, in effect, we have set-aside by another name and in another form.
We do not yet know what size of share the Government intend to take either in the first year or in subsequent years. Nor has any promise been made—I did not hear it tonight—that the share will not change from year to year. It is, in the words of the Local Government Association, one of the many detailed points that “remain unresolved”. As this is, in the main, an enabling Bill, we will not see that detail until later.
Thirdly, I turn to the question of fairness. The Secretary of State is on record as saying:
“we will ensure that no one will be worse off when the new system is introduced than they would have been under the old system.”—[Official Report, 18 July 2011; Vol. 531, c. 663.]
That sounds reassuring, but it is only valid for twelve months. What about years 2, 3 and 5? Can the Secretary of State guarantee that no council will be worse off then as a result of the change he wants the House to bring in? These are really important assurances, for which councils are still looking. As the Secretary of State’s colleague Sir Merrick Cockell, chairman of the LGA, put it:
“Reform must…ensure that those areas that do not have the capacity to raise huge amounts of funding through business rates do not lose out.”
SIGOMA has asked why Ministers have decided not to restore resource equalisation to its 2010-11 cash level, which could have been used as a baseline for future grant allocation.
What guarantee has been given to councils that the tariff and top-up mechanism will produce a fair result, especially given the coalition’s track record? Why do the Government think—or, to be strictly accurate, have the “aspiration”—that resets should happen only every 10 years? We think that they should be more frequent, as do most of those who responded to the consultation.
What about the circumstances, which were mentioned earlier, in which councils lose a major employer, and hence business rate income? That is a very serious matter. How quickly will such councils be given help, how much help will they be given, and how long will it last?
What about the perverse incentives in the business rate system that encourage retail units and gyms more than manufacturing, and encourage warehouses employing few staff more than factories employing a large number of workers?
Then there is the levy mechanism. Last July the Secretary of State told the House:
“There will be no cap on the amount of business growth from which such councils can benefit. A council will be better off as a result of growth”. —[Official Report, 18 July 2011; Vol. 531, c. 663.]
Yet the Bill gives the Secretary of State power to decide how much of any growth in business rate income a council can keep. He alone will decide what constitutes a disproportionate benefit. That is the reverse of the localisation that he promised. The retention of business rates is clearly not all that it seems.
If the purpose of the levy is only to fund safety nets—and that is not clear—why does paragraph 28(1) of schedule 1 make it possible for only part of any surplus balance in the levy account to be given back to one or more local authorities? Does that mean that, in effect, a second top-slicing mechanism is being created by the back door?
All that makes it clear that no one can say at this stage what the incentive from keeping some business rate income growth will be. That is why London Councils said, in its briefing on the Bill,
“'the business rate incentive is uncertain and unpredictable”.
What is more, in some cases there could actually be a disincentive. Under the current system, if a council decides to engage in a big redevelopment and regeneration scheme in the centre of its town or city, such as rebuilding that centre, the loss of business rates for an extended period is not a problem, because it does not affect the resources that the council receives. Under the Bill, however, it could well be a problem. It may cause the council to conclude that it is not sure whether it wishes to proceed with the scheme, although the Bill is supposed to be all about encouraging growth.
Let me now deal with the other main part of the Bill, which concerns council tax benefit localisation. It constitutes a step backwards towards a time when different areas gave different help to people in need. The big question is this: why are the Government making this change, and why, if they are determined to do so, have they not linked it to universal credit, as was suggested by many people in the consultation? The fact that they have not done that will lead to a great deal of confusion.
Rent is one cost that people face in order to live somewhere, and council tax is another. In the first case there will continue to be a national scheme to provide help; in the other the national scheme is to be abolished, and councils will be left to decide what benefit should be provided. However, the Government intend to legislate to protect certain council tax payers, while at the same time imposing a 10% cut in the amount that goes to local government to meet the cost of paying the benefit. In areas where there is a lot of need—for different authorities have different needs and different circumstances —that will constitute an additional cut on top of the existing reduction in local authority resourcing of over 19% in the last two years.
Because the Bill will rightly give continuing protection to pensioners, it is inevitable that, unless councils try to reduce benefit for those who are out of work, people who work but are on low incomes will be hit the hardest. Indeed, that is what the Government’s own impact assessment says. The House of Commons Scrutiny Unit has made an estimate of the impact of the 10% cut with protection for pensioners which suggests that non-pensioners—people of working age, whether working or not—will face an average cut of 16% in their council tax benefit support. Of course, in areas where the number of pensioners is higher than average, the cuts facing everyone else will be even bigger.
The New Policy Institute, which has also looked into the effects of the cut, has found that five of the 10 hardest-hit local authorities are among the top 10 most deprived areas, according to the 2007 indices of multiple deprivation: Hackney, Newham, Liverpool, Islington and Knowsley. Meanwhile, according to the same indices, the two least affected areas, Hart and Wokingham, are also the two least deprived. Does that sound familiar? Of course it does. Once again, cuts are being imposed unfairly by the coalition Government. Moreover, the Government’s policy is completely incoherent. The Department for Work and Pensions says, “Hey! We want to make work pay!” but here is a policy that will end up doing the very opposite.
The Secretary of State has a completely inconsistent attitude when it comes to protecting people from council tax increases. When he announced the council tax freeze in March last year, he declared resoundingly:
“we are determined to protect hard-working families...This is about giving real and immediate help to families struggling with the daily cost of living.”
Yet here he is now, proposing a policy that will result in a significant increase in council tax bills for some people, particularly those who work and try to do the right thing, but are on low incomes. Those are the people who he said, less than a year ago, that he was determined to protect, but now he wants us to vote for a measure that could, in some instances, wipe out all the benefit of the council tax freeze. Furthermore, the cuts are being introduced at the very moment when more people are going to need help with their council tax bills. Why? Because unemployment is rising. Why do we know that? Because the Chancellor has told us so.
Costs could also rise because of increased take-up. What account have the Government taken of that—and what about higher unemployment? How are councils expected to cope with that? Given that they will possibly end up designing different schemes, there is a risk that people will decide to move from one council area to another because of the different levels of council tax benefit. And what about the collection costs? As the Conservatives learnt when they introduced the poll tax, when councils start trying to collect money from people who do not have a lot of money, they have a problem. People who are poor must make decisions about what bills to pay, and in what order. What assessment have the Government made of the practicality of collecting the money? What about all the other benefit changes that will affect the same group of people at exactly the same time? I hope that the Secretary of State realises that that when a lot of people discover that they are being hit with increases in their council tax—for that is what his Bill does—there will be a great many appeals. How much will that cost?
Finally, there is the timetable for the implementation of the change. The decision to implement it from April next year was widely criticised by respondents to the consultation, and the Select Committee on Communities and Local Government has called for a delay to allow councils time to put their schemes, software and administration in place.
We do not support this change, just as we do not support the Bill. It does not pass the tests of fairness, incentive, certainty, and helping councils to meet local need. It does nothing to deal with the unfair way in which the Government have imposed the largest cuts on the least well-off communities. The Secretary of State claims to be the great champion of localism, but he has presented the House with a Bill that gives him all the power to determine what happens, including the power to take and keep a top slice of business rates. No wonder the LGA said in its briefing for today’s debate:
“That is not a localising policy and goes against the Government’s stated commitment to localism.”
Say one thing and do another: that is the story of this coalition, and that is why the right thing to do is to reject this Bill.
Madam Deputy Speaker (Dawn Primarolo)
Order. Twenty-six Back Benchers have indicated that they wish to speak in the debate, which is due to end at 10 o’clock, with the wind-ups starting at 20 minutes to 10. We shall therefore start with a limit of five minutes on each Back-Bench speech, from now on. There is nothing else that I can do to give more Members an opportunity to contribute to the debate.
Henry Smith (Crawley) (Con)
It was a great privilege to speak in last year’s Second Reading of what is now the Localism Act 2011 and to serve on the Bill Committee, but I always considered that legislation to be only a part of the overall programme of localisation that this Government are, happily, determined to introduce. In the financing of any system, the old truism still holds that he who holds the purse strings controls the power. The way in which local government is funded is an important aspect of localism. That is why I am pleased that we are completing early in this Parliament the process of radically shifting the balance of power in this country from central Government towards local government, local communities and individuals. The Localism Act was a significant contribution to that move, and this Bill completes it.
For seven years I was a county council leader operating under the system we are seeking to remove. My right hon. Friend the Secretary of State rightly noted that, as the OECD has said, it is incredibly complex and completely lacks transparency. Worst of all, it is incredibly subjective. Ministers have therefore been able to use this complex system to fund parts of the country that they favour politically. I witnessed that several years ago when I was a council leader. The funding formula produced for West Sussex county council—an authority that covers more than 750,000 people and 770 square miles, and with a capital and revenue budget of about £1 billion—was an increase of just £6,000. At the same time under that formula, Birmingham city council received an increase of £12 million. West Sussex county council tried to find out how the funding formula was calculated, but there was a complete lack of transparency. The central Government Department did not want to tell the authority how it was worked out. We then invoked the Freedom of Information Act, and an obscure measure from 1947—the Statistics of Trade Act 1947—was used to explain why we could not be told what the funding formula was. The system desperately needs reform, therefore.
I welcome the retention of the business rates scheme, which will localise business rates. Most people are perplexed about why business rates currently go straight to Whitehall in an inefficient way and are then inefficiently redistributed around the country.
Gatwick airport lies within my constituency. It is a massive economic driver. It would be nice if we could keep all the business rates. If so, I do not know whether we could quite pave the streets with gold, but we could probably fill in a few potholes with gold. It is right to have a system whereby central Government can redistribute in order to support less economically buoyant areas around the country, but it is also right that we localise a large proportion of business rates and thereby allow local authorities to be much more responsive and to encourage economic growth. That is good not only for localism, but for economic growth in each local area—and therefore for the economic growth of the country as a whole and for our deficit reduction programme, which is so important to the well-being of the country.
I wholeheartedly support the Bill. It is good for our local communities and for council tax payers. Finally, I thank the Secretary of State for working with our local authorities to freeze council tax for another year; it rose by 128% in Crawley between 1997 and 2010.
Mr Clive Betts (Sheffield South East) (Lab)
I am a localist. I believe that this country is too centralist and that, in order to further localism, local authorities need to have more control over their own finances.
In 2004, the Select Committee that I now chair produced a report on local government revenue in which it concluded that business rates income should return to local authorities, where it was raised. I have no problem in principle with measures that seek to give local authorities more incentives to encourage development in their areas and that allow them to retain more of the finance raised in their areas, but let us look at what the situation was in 2004. The components of local government finance then were council tax, which councils kept, and business rates, which were taken to the centre and then redistributed, and about one third of local government revenue came in the form of central Government grant and was distributed according to the resources of councils and their needs. Under the Bill’s proposals, there will be a fundamental change. When they are introduced in 2013-14 local government finance will, essentially, come from only council tax and business rates; the Government grant element will go completely.
The Government therefore face a problem. They propose that the council tax will be left as it currently stands, so they have two objectives for business rates. On the one hand, they want local authorities to retain them so they can provide an incentive for development in their areas and have more control over their own financial futures. On the other hand, the Government want business rates to be used as a mechanism for redistribution—for taking from areas with higher resources and giving to areas with greatest needs. That is the fundamental conflict at the heart of the Government’s proposals. They are trying to do two conflicting things with the one tax of business rates.
That is why the proposal is not for a simple retention by local government that everyone could understand, whereby money raised in an area is kept in that area. Instead, we have a complicated system in order to try to ensure that one tax addresses two conflicting priorities. That is why we will now have a complicated system, and one that further centralises power by giving more powers to the Secretary of State. This is centralised localism once again. The proposal fails to achieve what the Secretary of State says he wants, which is to ensure that authorities with great needs have the same amount of resources to spend as previously. All the information we have received suggests that authorities in the greatest need will lose out.
I welcome the Secretary of State’s proposal not to put council tax into the universal credit, as I think it should be kept at the local level. My problem is with the 10% savings authorities are meant to make. Rightly, pensioners will be protected from many of the cuts that that 10% saving will impose. However, if authorities take account of the tapers under universal credit, so there cannot be reductions for those in work claiming council tax benefit, the total burden will fall on the unemployed of working age who claim council tax benefit. Up to 30% of their benefit could be taken away, and if unemployment rises there will be a further reduction in income so authorities will have to cut either other services or, again, the benefits of the unemployed who are of working age.
There is a further issue. Council tax has been a stable source of income for local authorities over the years. It is not like a sales tax or an income tax, in that revenue from it does not tend to fall at times of economic difficulty. Now, however, for the first time local authorities will find that their main source of income, council tax, will go down at a time of economic difficulty. That will create instability at the heart of local government finance. The Select Committee looked into this issue. It is impossible to believe that bringing in a system in a matter of a few months—consulting on it, designing it, bringing in all the new technology required to implement it—will not result in any disasters caused by a failure to implement things properly, and such disasters will cause genuine hardship for people. I do not think this proposal can be delivered with certainty within the time period.
People whose income changes will also find that they have to go to one office for council tax benefit changes and another office for housing benefit changes, which will add further confusion. The Bill does not take that into account.
Annette Brooke (Mid Dorset and North Poole) (LD)
As is declared in the Register of Members’ Financial Interests, I am a part-owner of a very small business.
First, I welcome the general thrust of the Bill: to devolve greater financial powers and freedoms to councils, which is very important to me. On business rates, I believe the case for reform is overwhelming. The proposals in the Bill will move us away from a complex, non-transparent, centralised system, which offered no built-in incentives for councils to drive economic growth.
Of course, it is difficult and I think brave of the Secretary of State to propose such a radical overhaul of the existing system, and it is easy to focus on all the fears, which have to be addressed in our subsequent discussions. In utopia—if there are such things as taxes there—perhaps we could draw up a system where all decisions are taken locally, where all business rates are retained locally, where there are real incentives for local authorities to promote economic growth, where there is a perfectly fair outcome for all, and where there are not unpredictable changes in business activity or devastating impacts from structural changes in our economy. I rather doubt that, but it is clear that in the real world we have to take a pragmatic approach and achieve a balance between the objectives of localism, fairness and incentivisation, while providing a safety net and transparency. Incentivisation must be balanced with protection of appropriate resources for all areas, especially those with the greatest needs. This needs to be done equitably, effectively and transparently for all.
The Government have made the commitment that there will be a fair starting point, so that no council is worse off at the outset of the scheme. Tariffs and top-ups are proposed, but with provision for councils to benefit from growth in their business rates. Of course, the devil will be in the detail; we have a lot of scrutiny to do. There are safety net provisions, with a levy to tap into disproportionate gains. Personally, I would like to see local government playing a full role in operating these equalisation mechanisms, along with central Government.
There is a need to provide clear incentives for individual local authorities to gain from additional local development, but I do have some concerns about possible unintended consequences. We have heard mention of the incentives to promote large warehouse developments. They will yield the business rates, but perhaps not the same incentives to promote SMEs. SMEs may well be more job-creating, which is all important for the local area. We have a great deal of careful scrutiny to do there in order to avoid such distortions.
On set-aside, there is a degree of centralisation. It is a first step. In the longer run, I, as a Liberal Democrat, think there is a lot more scope for local decision making. Taking a purely localist view, the localisation of council tax benefit should be welcomed and I certainly welcome the theory, but I do have concerns about the practicalities. The 10% reduction in the overall budget and the centralised decision to retain existing benefits for pensioners, right as it may be, does put constraints on each council devising its own scheme. It also raises genuine concerns about whether it will be possible to protect all vulnerable groups of working age adequately.
In order to implement a local scheme, each local council will have to use different software, so there are many practicalities that need to be looked at.
On empty homes, there is a real opportunity to drive this agenda further than in the past. With 300,000 homes being vacant for more than six months, I am excited by the Bill’s proposal to go further than just giving more discretion to local authorities, and to introduce an empty home premium after a property has been empty for two years. One of my own local authorities is not very keen on this, arguing that an empty home cannot be defined. I am astonished by this response to the consultation—I thought we had gone beyond the days when we said what was furnished and what was not, and so on.
I want to touch briefly on council tax, which is dealt with mainly in the consultation and not in the Bill. I welcome the fact that we can perhaps have a higher tax on second homes. Some 7.29% of homes in part of Purbeck, which I represent, are second homes. This issue is important, and I would like to examine the case for a second home premium, similar to the empty homes premium. I would also be interested in considering allowing the billing authority to keep some of the extra revenue. If we can do that for the business rates, which I welcome—obviously, in a two-tier authority the district council will be the driving authority—why cannot—
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Government’s promise today is that the measures contained in the Bill will encourage local economic growth, and in these times there cannot be a Member on either side of the House who would not back legislation that would do that. Over Christmas, many of my constituents told me that it already feels like the bad old days of the 1980s are back—and not just at the cinema. They want us, as a Parliament, to do something about it.
Encouraging enterprise and enabling local councils to promote growth are good policies that I support in principle. I have always believed, particularly during my time as a councillor, that local authorities should have more tools at their disposal to tailor policies to their area. However, I am not convinced that the measures in this Bill will deliver these aims.
At the heart of the Bill are plans to localise both council tax and business rates, but as time is limited I will concentrate on the collection and distribution of business rates. As we have heard, under these proposals councils will retain the business rates they collect, which will then be subject to a top-up or a tariff. Clearly, the Government intend that those authorities where the economy is booming in excess of expectation will benefit financially through the increased collection of business rates. As a result, residents in those areas may find their streets a little cleaner, the flowerbeds in the parks better stocked and their libraries open longer; but underneath those plans the cost of the better services in the booming areas will be met by areas where economic growth has faltered. In these areas, where deprivation and unemployment are increasing, councils will not benefit from the additional funding, no matter how desperately it is needed. It is these residents who will suffer the loss of vital council services as a result.
The measures in the Bill are likely to lead to a growing divide between “winners” and “losers”, risking some areas spiralling into decline while others continue to grow. Already the Government’s own figures have shown that their spending cuts have disproportionately impacted on areas such as Greater Manchester. The unfairness was so pronounced that last year the Manchester Evening News began a campaign against it. The Government should have taken more notice of that campaign and campaigns like it.
I understand that the changes in the Bill will use the already announced spending allocations from 2012-13 as a starting point for the new scheme, but in doing so they will build a system on unfair foundations. What the Government propose will exacerbate that unfairness. It is the job of the Government to mitigate the impacts of the recession, not compound them by leaving those in trouble to fend for themselves. I appreciate that the Bill does mention top-ups, tariffs and safety nets in order to prevent this, but there is no indication that these measures will be robust enough. In fact, there are no estimates as yet of the impact the changes will have on individual local authorities. I do not believe the Bill should be allowed to progress until there are stringent mechanisms in place to ensure equity in resource allocation.
The Bill also fails to recognise that the actions taken by a council are not the sole determinant of economic growth in an area, no matter how effective it is. I am intensely proud of Tameside council, my local council, which has always played an activist role in the local economy. It has always been forward-thinking and willing to use the private sector or anyone else to try to make services better. Tameside is of course one of the 10 Greater Manchester councils that have worked together to develop one of the most successful systems of city region governance in the country: first, through the Association of Greater Manchester Authorities, and now the Greater Manchester Combined Authority. The Government should recognise that this successful collaboration, which includes councils under the political leadership of all the main parties, stems from an acknowledgement that the authorities in a city region must have strategies that are complementary, not competitive.
Successful business growth in the centre of Manchester is good for my area, because the people who work in those businesses may move out to Stalybridge or Hyde, where they will get a bigger house and more open countryside for their money. However, if we localise the business rate in the wrong way, that collaboration is broken, to the detriment of everyone concerned.
Greater Manchester’s councils are among the most innovative in promoting business and growth on a local and regional basis, but successful as they are, they are not the sole determining factor of economic growth in an area. Indeed, official figures from SIGOMA, reported in the Financial Times last week, suggest that 80% of the factors relating to promoting business growth in a given area are nothing to do with local government. Particularly in this era of economic difficulty, there are factors that impact on local economic growth that are way beyond the control of local councils. Implementing a system that would penalise hard-working and innovative councils when external factors come into play would be wrong. The Government may feel they are justified in recognising economic growth in this way, but if they are rewarding areas for circumstances beyond their control, this is no more than a lottery.
We have very little time to discuss this important Bill today. Those who are not involved in local government finance may consider it an unimportant technicality; however, it will have a serious impact on our local authorities, and I will vote against it today.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome this Bill as yet another example of this Government’s commitment to localism, private sector business growth, local democracy and local accountability. For too long, councils have not had sufficient incentive to drive business growth in their boroughs and districts. The proposals will mean that councils that have been unwelcoming to the private sector and job creation, or even those that treat the private sector with antipathy, will be found out. They will be answerable for their actions or for their inaction, and will risk punishment at the ballot box, where they will rightly be held accountable by their electorates.
At this point, I should declare an interest. Nine years ago, I relocated my business. I wanted to grow the business and create more employment in a district which is now the constituency that I represent. The unhelpful nature of the then Labour-controlled local authority meant that the project took eight years—it took eight years to go through planning and construction, and the issue was resolved only when it dropped on Tony Blair’s desk as the worst case of red tape and bureaucracy holding back a small or medium-sized business in Great Britain. Since the eventual relocation, in 2003, the company has created more than 150 new jobs for the district, and has paid just under £3 million in corporation tax and £1 million in business rates. We will never know how much more the company could have done if it had not been so mired in bureaucracy for so long. Happily for residents and businesses in North West Leicestershire, the district council is now Conservative-controlled, and has been since 2007, and only last week I was discussing with the council leadership how the authority will be focusing this year on creating jobs and business opportunities in our district.
If we examine the words of the shadow Secretary of State today, we find that they reveal the real beliefs of the Labour party about business and democracy, and go some way to explaining why Labour is not supporting the measures in the Bill. Interestingly, the Opposition now agree with the need for reform, but that raises the question of why they failed to act for 13 years in government. The facts suggest to me that they ignored the need for reform because of the central command and control that the current system gives the Treasury or, alternatively, they simply did not have a clue what to do—perhaps it was a combination of both. What I would say is that we need to move away from the dependency mindset in local government, which leads to councils investing much of their effort in lobbying central Government for funding by demonstrating deprivation. Instead councils should be investing in local growth, in a system where they can raise more than 80% of their revenues locally, which gives them a tangible stake in supporting local shops and local enterprise. Such an approach is in stark contrast to the command-like structure that the previous Labour Government favoured. The shadow Secretary of State has said:
“The proposals don't sufficiently incentivise councils to get growth going”.
Yet Labour left a legacy of no incentive for local councils to go for growth, and so the stance could be construed as hypocritical.
Another concern that the shadow Secretary of State expressed was that there is no guarantee that some councils will not lose out, and so we get to the nub of real Labour party thinking. I believe that Conservative-led councils will do rather well out of this policy, but that is not because the proposals give an unfair advantage at the beginning. The starting point has been explained, and it is transparent and fair. Councils will have a set baseline and those already above it will pay a tariff to the Government, while those below it will get an individually assessed top-up from the Government. So it is fair to say that all councils will start on a level playing field. I would therefore say that a fear of democracy, transparency and a loss of central control is driving the Labour party’s opposition to this Bill. In a nutshell, the current system encourages councils to take part in a race to the bottom in order to get funding, whereas our proposals will incentivise a race to the top.
I warmly welcome this Bill as another step towards creating the growth we need to deal with both the financial and democratic deficit left by the previous Administration. This Government are proving, yet again, their commitment to devolving decision-making powers to local people and making them both responsible and accountable for their actions.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
First, may I draw attention to my interest, as declared in the register?
The Bill speaks volumes about the Government responsible for introducing it. First, it is largely incomprehensible, and I challenged the Secretary of State, when he was in his place, to explain, in plain English, the meaning of the first seven clauses. Of course he immediately had to rush to get a copy of the explanatory notes, which he read out in a rather tedious way, because it is impossible for the lay reader to understand the clauses. They are phrased entirely in terms of amendments to existing legislation. Interestingly—this is perhaps why he was unwilling to rise to the challenge—the very first piece of legislation referred to, in clause 1, is the Local Government Finance Act 1988. Some people will know what that was—it was the Act that introduced the poll tax. So the people responsible for the poll tax are back with us again, only this time they have the Liberals on board with them.
The Bill is incomprehensible as legislation and it is contradictory in that its effects will be very different from what it claims to do. It talks the language of localism but, as my right hon. Friend the Member for Leeds Central (Hilary Benn) ably pointed out from the Front Bench and as was equally highlighted by my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee on Communities and Local Government, it is actually a deeply centralising measure that gives huge powers to the Secretary of State to determine what amounts of local revenue can be retained by individual local authorities and, crucially, how much will be clawed back by the Treasury. One of the key provisions, which the Chair of the Select Committee highlighted, is the erosion of grant support from the Government to local authorities. The main source of revenue to local authorities will now be business rates but authorities are not even going to have the benefit of retaining all those rates because of the claw-back provisions in the Bill. The Bill is a deeply flawed, centralising measure that does not do what it says on the tin; it covers itself in the language of localism but is a profoundly centralising measure.
Let us address the part of the Bill that deals with council tax benefit, which is a nasty little piece of legislation and which does not just cut 10% from the benefits of people who depend on this for support with the cost of their council tax. There are large numbers of these people—almost 6 million—and, on average, they are getting about £15 a week, or £800 a year. A very large number of vulnerable people depend on this revenue, some of whom will have all of it taken away and some of whom will have some of it taken away. We do not know what the consequences will be, because the Government have not yet set out the detailed rules. Therefore, local authorities, which are expected to introduce the provision in just a year’s time—they are to have the scheme in place by the end of January 2013—do not know how to begin to plan the scheme because they do not know what the Government’s reserve requirements are.
I must say to the Government that the approach being taken is horrifyingly reminiscent of another disaster of the 1980s: the introduction by the then Conservative Government of housing benefit. The Conservatives like to forget or obscure the fact that it was the Thatcher Government who introduced housing benefit and were responsible for the scheme which Conservatives are now attacking, criticising and saying needs reforming. Its introduction was done in just the same way that the current Government are proposing to introduce these changes: in a rush, without adequate consultation and with a lot of the detail unavailable until very much the last minute. The consequence then was administrative chaos, which was described by some of the country’s most respected newspapers as the
“biggest administrative fiasco in the history of the welfare state.”
I have to say to this Government that they are on track to repeat that experience now. They are rushing ahead with a highly complex scheme without giving local authorities the time to prepare properly, and they are going to do it in a way which imposes steep cuts and therefore affects the living standards of people who depend on this benefit for their welfare. The approach is profoundly irresponsible and I sincerely hope that the Government will at least use one of the powers that they have given the Secretary of State in this Bill and, by order, amend the date on which this scheme can be introduced. I sincerely hope that they will listen to the good advice of the Select Committee and defer what otherwise promises to be an administrative fiasco that will cause immense hardship.
Ben Gummer (Ipswich) (Con)
It was said at the beginning of the debate that we live in one of the most centralised states in Europe, if not the world. Only Malta, according to the Government, has a more centralised system of local government. The Netherlands, in my understanding, is the only other country that collects less of its tax locally than Britain. That is bad not just in itself but because it goes against the Government’s stated objectives of localising as far as possible, not just down to local government but from local government to communities, from the European Union to national Governments and so on.
The shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), put the debate in the context of Layfield and the broader history of local government finance, and correctly so, but we cannot speak about local government and its relationship with business without thinking about why we have many of our local authorities and why they were successful 100 years ago or 150 years ago in creating the great towns and cities that many of us are profoundly lucky to represent.
The hon. Member for Stoke-on-Trent Central (Tristram Hunt) has written eloquently on this subject and I feel that, as he sits on the Opposition Benches, we almost have the ghost of Joseph Chamberlain with us—a man who showed that the union of business and local authority, through municipalism and corporatism, could create urban spaces that were good for every type of person in that authority, creating wealth, prosperity and growth and the great civic buildings of our towns and cities. That approach created the urban growth that made wealth and prosperity possible in the latter half of the 19th century, with the first great slum clearances, the provision of a good water supply and all the things on which we still depend today.
The way in which we have gone from that position to where we are now, when, if we are honest with ourselves, councils represent in many cases a desiccated, demoralised and often moribund arm of the state, is a profoundly sorry story and one for which responsibility is shared, as the shadow Secretary of State so correctly said, by Governments over many years. It started a long time ago, in 1835, which was the first time that central Government took a precept from local taxation. Even by the 1870s, 90% of taxation was still raised locally and that figure did not fall beneath 70% until the 1950s. The decline fell to the point at which, between the period covered by 1993-94 and the 16 years that came afterwards and 2011, there were only two years when 50% or less of the funding was provided by central Government. The result is threefold: we have a declining calibre of councillor and officer from parties represented in every part of this Chamber; we have a rupture in the relationship between business and councils that has stifled economic growth, especially in our provincial towns and cities; and we have falling participation and democratic interest from the electorate.
The Bill does an enormous amount to start to turn the clock back to a position in which local authorities have responsibility for growth and can reap the benefits of seeing businesses start up, employ people and create prosperity and wealth in their areas. Importantly, it also includes the downside risk, and this is where I welcome the Government’s reform of council tax benefit. Councils must feel the heat under their feet that will be caused by the fact that if they do not get local economies going, they will have to bear the consequences of dealing with the result, which is joblessness. It is important that they do everything in their power to ensure that companies can prosper and employ, creating jobs and growth.
The much-stated aim of councils is that they want to work with businesses, but frankly, as we know, they often pay just lip service to that. I ask the Government to look even further at tax competition between local authorities, so that we can have a genuine fight for jobs, prosperity and growth in the towns and cities across our country.
John Healey (Wentworth and Dearne) (Lab)
The Bill brings about the most fundamental change in local government funding since the poll tax. Like the poll tax, it is a big change that is being forced through too fast and, like the poll tax, there is no consensus of support behind it. This reform and this Bill build in unfairness like a ratchet.
At the moment essential local services are funded on the basis of need. After this legislation is passed, they will be funded on the basis of the ability to raise tax and pay locally. Ninety years ago, 30 councillors from Poplar went to prison to establish the principle of equalisation in local government funding. That equalisation means that we now have a system of funding that enables each council to provide services to residents to a similar standard. That is why the current formula for grant to local councils takes into account population, need and the capacity to raise funds through the local council tax. It takes account of the fact that there are more than three times more looked-after children in Newcastle than in Surrey. It takes account of the fact that Bexley and Barnsley have similar populations, but Bexley raises more than £37 million more in council tax each year than Barnsley does.
The Bill ends the equalisation that George Lansbury and his Labour councillors in Poplar fought for just after the first world war. With council tax frozen or capped by referendums, the increased funding for increased spending and increased need must be met through increased business rates. The problem for the future is that the opportunities to grow the business rate are unevenly spread across the country, as is the business base. Kensington and Chelsea has a smaller population than Barnsley or Rotherham, yet it raises more than three and a half times the business rates of Rotherham and more than five times the rates that we raise in Barnsley.
The local government finance system is, as the Secretary of State said, complex and incomprehensible. The Bill will make it more complex and less comprehensible. It has, in my view, four big flaws. First, from year one the gap between affluent and less affluent areas will grow. The affluent areas with the higher business tax base start with an advantage that will just get bigger and the system of tariffs and top-ups will reduce but not remove those disparities as otherwise they would remove the incentives to grow, too.
Secondly, the idea that the legislation will localise business rates is largely an illusion. As my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, said so clearly, some of the most critical decisions about how the system will be designed and operated will be made by central Government and not local government.
Thirdly, local government’s certainty about funding for the future and therefore long-term planning will be badly undermined by the new system because business rates income is volatile and hard to predict. The Secretary of State’s decisions about the design of the system will, it seems to me, inevitably have to be made annually, undermining the ability of local government to plan for the long term.
Fourthly, business growth is not the same as business rates growth, so the incentives to councils to see and support the economic growth of their area might prove to be weak or even perverse under the new system. Business rates are levied on buildings—the bigger the better—so supermarkets, gyms and warehouses are good, but small starter units with high-tech design and manufacturing are bad.
Finally, the changes this Bill makes to council tax benefit are a hospital pass to local government. Many people in Rotherham benefit from that support by about £15 a week. That will be cut by £2 million in 15 months’ time, and although pensioners will be protected, other groups will find the cut is even bigger. This is a bad Bill and we must oppose it.
George Hollingbery (Meon Valley) (Con)
I should like to draw Members’ attention to my entry in the Register of Members’ Financial Interests.
It is a challenge to follow the two very thoughtful speeches of the right hon. Member for Wentworth and Dearne (John Healey) and my hon. Friend the Member for Ipswich (Ben Gummer). The historical context they gave is very useful, but I cannot help but be persuaded that localising business rate collection and incentivising local councils to grow their own areas in terms of the economy has to be the right thing to do. I met the cabinet of Havant borough council, which is not a wealthy council by any manner of means, on Friday to explain the implications of the Bill, and those members were genuinely excited by what they heard. They said, “That means we are going to have to rethink everything we do. No longer are we going to be pleading for funding—we are actually going to go out there and find it for ourselves.” That is an exciting development.
I particularly welcome pooling. The Select Committee on Communities and Local Government, under the chairmanship of the hon. Member for Sheffield South East (Mr Betts), went to Manchester. There is a huge appetite in that part of the world—and, I suspect, in many other large metropolitan areas—to see private, local and locally generated ways of creating regeneration. Given the lack of central funds at the moment to promote more regeneration, the pooling of business rates, of ideas, of enterprise zones and of TIFs across a whole local area creates a genuine way forward. That is another reason why I am excited by the proposals.
On TIFs, there was some disagreement among those who replied to the consultation about options 1 and 2 and about enterprise zone issues. Should we have small limited schemes that are not subject to the tariff and top-ups regime or should there be ring-fencing to ensure that longer-term schemes can be put together? The Government listened and both those options are available. Clearly, option 2 could create a drain on the overall business rates pool and might therefore have to be limited. I think we all understand how that works. Likewise, we need to be able to have a more flexible, shorter-term version of the TIF pool to ensure that smaller local councils, perhaps in better financed areas, can also get shorter-term projects enabled. That is why I welcome the flexibility being built in.
On empty properties and second homes, it is right that people who own second homes should pay full council tax. After all, they rely on the value of their houses being backed up by an enabled local council that allows rubbish to be taken away and planning decisions to be made. It therefore seems quite proper that they should be asked to make a full contribution to the rateable value of their houses. I also strongly welcome the potential to charge those who have long-term empty properties in their possession a premium on council tax. Given that there are 400,000 long-term empty homes in Britain, the Government must do everything they possibly can to get those houses back into occupation.
I want to spend a little more time on the issue of council tax benefit localisation, with which I have some issues in principle. I was on the Welfare Reform Bill Committee and it seemed unusual to me to single out one benefit of all the benefits being put into universal credit and put it to one side. That made no great intellectual sense to me. I understand that there is a perfectly reasonable argument about localisation and about local councils being able to create local schemes for their local areas to reflect local circumstances, but this issue added another layer of complexity and it came out of a Bill that was meant to create simplicity. For me, the argument did not stack up. However, we are where we are.
I have some questions for the Minister to answer later today or in Committee. Is there any reason why we should not have an official pooling of council tax benefit schemes across my area in Hampshire, for example? Why cannot all district councils in an area get together to create some sort of agreed pool? That would allow some flexibility in under-collection and over-collection and would stop some of the perverse incentives that there might be in the scheme that would push people, particularly those in social housing and where there is a joint housing register, to move into one of the areas on that register. There is a potential problem with this issue and a county-wide scheme in two-tier authorities might be very useful.
I noticed in the response to the consultation that in chapter 5 there had been some discussion about parishes. If there is to be a grant to local government to be distributed as a council tax discount, what will be the status of parish council precepts given that they are not part of the same authority? Will there be a legal system by which parish councils can be compensated for the lack of collection of council tax? I am not sure that has been wholly resolved. In my part of the world, certainly, this issue will be very important.
Finally, discussions on clause 107 of the Welfare Reform Bill suggested that the single fraud investigation service would deal with all benefit investigations. That is on the record in the Hansard of the Bill Committee’s proceedings. However, chapter 8 of the consultation document and response suggests that this will now be the province of local councils. I would welcome some clarification on that.
Alison Seabeck (Plymouth, Moor View) (Lab)
I draw the House’s attention to my indirect interests in the Register of Members’ Financial Interests, as previously stated in other debates.
The Bill covers a number of areas including the non-domestic rating of council tax with specific reference to changes to council tax benefit and additional taxation for empty homes. I should have liked to spend more time on the empty homes proposal but unfortunately time does not allow that. I will simply say that although sticks are welcome, the clauses on this issue are poorly drafted and will leave opportunities for smart operators to find their way around the additional charge. For example, the allowance that the property must be substantially unfurnished could leave considerable room for argument.
On the section relating to the localisation of council tax benefit, the Government might package this as being about passing down powers to councils, but the reality, as my right hon. Friend the Member for Wentworth and Dearne (John Healey) said, is that it is a hospital pass to many communities and that the Secretary of State would continue to pull many of the strings. Cuts will come—there is no doubt about that—because if the pensioner element is effectively protected then, as we have heard, the 10% reduction in income will have to be shared out among the remaining groups.
In Plymouth, about 25,000 people are currently in receipt of council tax benefit. Of those, a significant number will have a child dependant, will be single people in low-paid work or will be disabled, but there is no mention in the Bill of protection for people with disabilities. This reform is dressed up as providing discretion and choice, but all it will do is localise cuts and target pain on those who are least able to cope. Unless Plymouth city council can find the money from elsewhere in its budget to make up the lost 10%, it will have no choice but to cut the amount paid to people or to find cuts from other services that have already taken quite a hit and that will see further reductions in the coming years of the current comprehensive spending review.
Plymouth has also seen an increase of over 36% in the last five years in the take-up of council tax benefit, as compared with an England average of 25%. Answers given to Members of the House who have asked parliamentary questions reveal significant disparities in take-up in different areas, and I am not clear from the documents that I have seen that the Government have taken that into consideration. What protection would be offered if in Plymouth, hypothetically, the dockyard failed and the naval base closed, after the scheme had been established by the individual authority? How would it cope with the additional council tax benefit burden and the loss of business rates—a double whammy, and at present with no specified safety net? We have talked generally about a safety net; the detail is not there.
Where will the baseline for these changes be set? Is it possible that it could have perverse outcomes if set in the wrong place? What assessment have the Government made of the potential cut-off points, and are those public? Can the Minister answer the SIGOMA queries that we have heard in the debate? This is complex territory and it is not an area where things should be rushed through, unless we want to see further delays to this legislation as it starts to unravel under scrutiny. I am sure the other place will take a close interest in that.
On business rates, does the Minister not accept that we could see a postcode lottery on a grand scale, where services vary markedly from one authority to another, which could threaten the very ability of some councils in areas of low economic growth to deliver necessary services? That, of course, leads to a downward spiral in those areas, which certainly would not be attractive to inward investment.
What is the role of the local enterprise partnerships in all this? None of that is clear, particularly in relation to pooling, as we have heard. Will the pooling arrangements be allowed to cut across LEP boundaries, and if so, how and where does the risk lie? They will certainly have an interest in that. The hon. Member for Ipswich (Ben Gummer) talked about councils feeling the fire at their feet, but does he understand what will happen if one of the other Government Departments does not do its job? Let us take transport for example and look at the far south-west—how will those local authorities be able to invest in new roads, new rails, new airports? They simply cannot do it. It is unfair. The Bill is not about local choice; it is about local cuts.
Iain Stewart (Milton Keynes South) (Con)
I shall focus my comments on the business rate proposals, and I should like to share with the House the example of my local authority, Milton Keynes council, to show how the Bill will benefit growth and help deliver better infrastructure in the local area.
At present, Milton Keynes loses out pretty badly under the current system. According to figures that I got from the Library this morning, in the current financial year businesses in Milton Keynes are due to contribute £132.5 million in business rates, yet Milton Keynes authority will get back about half of that—just under £70 million. Opposition Members may think that Milton Keynes is a very affluent place, part of the golden south-east, but there is fairly significant deprivation and very often we lose out in our share of the funding formula, be it for local authorities or for the health service. What we want is our fair share. I quite accept the principle of fiscal sharing of revenues across a country; any western country has that. The more affluent areas will contribute more to help those that are less so. I am not saying that we should move away from that principle, but the history of Milton Keynes shows that we have not had our fair share over the years, and I very much welcome the proposals that will give us that fair share.
Milton Keynes is a fast-growing area; it has developed enormously in recent decades, but I do not believe that in terms of business growth we have realised our full potential. Certainly there has been huge housing growth in recent years, but that has not necessarily been underpinned by the necessary business growth and the necessary infrastructure to support those new houses. The measures in the Bill, coupled with those that have been introduced by the Localism Act 2011, will make us more masters of our own destiny, and I think in my local area we will seize that opportunity, and help develop Milton Keynes and grow it into what we want it to be.
The measures on business rates are warmly welcomed by the local business community. This morning I was in contact with Colin Fox, the new chief executive of the local chambers of commerce. He endorsed the view that local businesses very much support them, and that they want business to be a genuine partner of the local authority in boosting growth and developing the infrastructure that underpins that business growth in the future. I believe that, whatever mechanism the local authority has to work with business, that should be decided by the local authority. There is potential for a very good partnership to develop our local place.
I finish by giving just one example of how I believe the Bill’s measures can work, particularly the power that it will give to borrow against future revenue streams, which is not currently permitted. Just before Christmas, the Chancellor announced the building of the east-west railway line, which will go through my constituency—a very welcome announcement. One addition to that which is not currently part of the scheme but which some people locally have promoted is the building of a rail freight terminal in Milton Keynes to encourage more transport of freight by rail rather than road. If the local authority could borrow against its projected business rate revenue, it would help develop that project and enhance the scope of the scheme that is already in place and is already worth while. I offer that up as one example of how the measures could really drive the local economic growth that we all want to see, and I am very happy heartily to endorse the Bill.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
It is a great pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart).
I am instinctively in favour of some of the reforms that we are discussing. Undoing the damage which the previous Tory Government did to local authorities always seems to me a good idea. It would have been nice to hear a slightly longer and deeper apology about John Major’s decision to nationalise the business rates, but we cannot have everything.
The reason why I am instinctively in favour of the thinking behind the Bill is that the past 100 years have witnessed, as the hon. Member for Ipswich (Ben Gummer) suggested, a relentless emasculation of local government power and autonomy. As this place has found less and less to do with questions of war, empire and global affairs, it has concentrated on and interfered relentlessly with the powers of local government, most of all in the field of local government financing.
Perhaps you will allow a little history, Mr Deputy Speaker. The great age of local government—of municipal socialism, of gas and water socialism—was the period 1870 to 1914. This was when our great urban centres were civilised: Birmingham, Glasgow, Manchester, Stoke-on-Trent and even London under the London county council. This was the age of museums and parks, town halls and swimming pools, schools and hospitals. There was a widespread belief in the virtue of local government and its capacity to deliver real change for the life chances of the poorest in Britain. The London county councillor and dockers leader John Burns described “a revived municipal ideal”, the goal of which was
“to do for all what private enterprise does for a few. It is the conscious ordering of the city, through ownership of public services, of its own comfort, happiness, and destiny”—
in fact, pretty much everything that this Government are opposed to.
But of course this cost money. There was extensive borrowing by local authorities—I welcome provisions to allow for extra borrowing by local authorities—and there was expenditure. In 1905, local authorities accounted for more than 50% of total Government expenditure, a figure which has come down to around 18% today, a clear indication of the decline of local authority power. We are all guilty in that process—inter-war demands for national efficiency, post-war demands for centralisation, demands for rationalisation in the 1970s, and privatisations in the 1980s.
At the heart of this story is finance. The capacity of local authorities to raise funds and be responsible for their allocation has been crippled. Today far too many local authorities seem overly dependent on car parking charges, for example, rather than any other income stream. This is in stark contrast to the situation in America and on the European continent. The lack of a plural funding base has undermined our councils’ ability to deliver for local communities, and made them overly dependent on the decisions of Whitehall, rather than town hall. So councils need the power which comes from financial autonomy, all of which makes the Bill so disappointing.
On the issue of liberty and equity, on the freedom of councils to act, as set against the broader need for social justice across the country, the Secretary of State’s Bill fails. The Government’s system of tariffs and top-ups will see a wholly unacceptable loss of income for those local authorities with less business rate income than their peers. This is, Mr Deputy Speaker, as you will know, a north-south issue. We have spoken of Knowsley v. Basingstoke, of Bexley v. Barnsley. On the Government’s plans—for all their talk of recouping disproportionate incomes—there will be a massive boon for high-performing cities in the south-east and marked loss of incomes for struggling cities in the north.
What is more, the reset mechanism and support funds do not properly account for the loss of a major employer—a dock, for example—and as we have heard, there are perverse incentives in the business rate model that encourage services over manufacturing when we are meant to be rebalancing the British economy, and large square-footage over intensive employment.
It is even unclear from the Government’s own ambitions how these plans will stimulate growth when the Treasury top-slice takes away the incentive. It is uncertain, it is unpredictable and it is fiendishly complex. This will not benefit Stoke-on-Trent, which we all want to see benefit from Government legislation. In fact, it will be hard hit in the ensuing years, which is why I urge Ministers to think again about the Bill. We believe in some of its propositions, but I will be voting against it.
Mr Marcus Jones (Nuneaton) (Con)
I give my broad support to the Bill and its Second Reading this evening. It will enable the start of the journey away from central control of council funding, and will give councils more autonomy both to raise local funding and to set spending on local community priorities, rather than the perceived priorities of Whitehall. Pursuing the latter over a number of years has created a perverse system whereby councils have constantly been looking to the next Whitehall initiative and the next Government grant. That system has let down some of our most deprived communities, as despite external and formula grants increasing in real terms for more than a decade from 1998 onwards, the gap between rich and poor actually widened during that period.
In the scramble to get funding into local authorities, those prescriptive grants would quite often not match the priorities of an area or, if they did, they would often overlap with the current authority provision because the grant criteria could not be tailored to local need. Services could often not be integrated, leading to very poor value for money and a continuous bolt-on of services, which councils then had to make very difficult decisions on, in terms of deciding whether to retain them or not, once the grant funding from Government expired. Pursuing the former and moving away from a central grants system will allow councils to make clearer long-term decisions based on the priorities of the communities that they serve.
I wholeheartedly welcome the mechanisms in place in the Bill to ensure that no council is worse off at the outset of the changes. That, together with a system of top-ups and tariffs, will ensure fairness. I also welcome the concept of the retention of future local business rates. I believe that that will make councils, particularly planning authorities, think far more carefully about creating a good mixture of commercial development and housing in their local plans. Many of my constituents feel that any plans for new housing must be matched by the creation of new employment to ensure that communities are sustainable and cohesive, and not just commuter belts for the larger conurbations, with poorly thought out, over-intensive housing developments.
It is also vital that the Government address the problem of empty dwellings, which the Bill does. As a Conservative I am a firm believer in a property-owning democracy and therefore the right of an individual to use a property in any way they wish within the rule of law, but I am acutely aware of the situation that we now face with huge numbers of long-term vacant properties—nearly 280,000 in England last year alone—and the councils covering my constituency have 1,100 such properties. With such a housing shortage, and with the proposal of new housing developments across the country, it is morally right that we try to correct the failure of the market in this case and get those long-term empty properties back into use. Therefore I welcome the Government’s move to allow councils to charge additional council tax where a property has been vacant for more than two years. That, together with the incentive to get existing properties back into use through the new homes bonus, will have a hugely positive effect on getting our properties back into use.
There are many more matters that I would like to speak about in some depth, but I will not do so on this occasion. I welcome the fact that the Bill will come before a Committee of the whole House rather than a Bill Committee, which will give Back-Bench Members an opportunity to raise their concerns about some of the minutiae of the Bill at that point.
The Bill aligns with the coalition agenda to move communities from a culture of dependency to one of greater-self reliance, but provides the safety net to bridge the gap where communities have the problems that make it difficult to achieve that self-reliance. I will therefore support the Bill this evening.
Heidi Alexander (Lewisham East) (Lab)
Given the time constraints, I will focus my remarks on part 1 of the Bill, which deals with local business rate retention. I have concerns about the localisation of council tax benefit, but I will save those for another day.
Earlier today we had a lecture from the Secretary of State on how councils need to be financially incentivised to encourage business growth and start-ups. We were told that the current arrangements, whereby central Government redistribute national business rate income to councils based on local need, is a complex and opaque system that does little to encourage an authority to foster economic growth. But the reality is that the partial business rate retention scheme that the Bill proposes will simply replace one complex system with another. It will not boost economic growth as the Minister claims. It is the wrong policy at the wrong time.
The idea that a council’s ability to fund child protection or elderly care should be determined by the number of businesses it boasts is not right. The idea that councils will act to improve their area’s economic fortunes only if they stand to gain some direct benefit for their coffers is insulting, and the idea that this policy is the correct one at a time when businesses are paying off debt rather than investing in new facilities goes to show how desperate the Government are. I am not suggesting that councils do not have a role to play in local economic development—far from it—but I am realistic enough to know that the actions of an individual council will only ever be one part of the jigsaw.
Let us take Lewisham as an example. Lewisham has one of the smallest business bases in London, as 70% of its working population leave the borough every day to go to work. The police station in the heart of the town centre is the borough’s ninth largest business rate payer, the other large rate payers being supermarkets and schools. It is a densely populated residential borough. There are pockets of prosperity, but there is also high unemployment. Before becoming an MP I was Lewisham council’s cabinet member for regeneration. Despite what Government Ministers might think, I did not sit around twiddling my thumbs and thinking that if only we could retain growth in future business rates we would do X, Y or Z to stimulate development. Funnily enough, I remember doing quite a lot to try to grow the local economy, not because it would mean money for Lewisham council, but because it was the right thing to do for Lewisham people.
A huge amount has been done to try to stimulate local economic development, but Lewisham’s business rate growth over the past few years has been modest, from a small base. The biggest business rate payer is a media company based in offices above Lewisham’s bowling alley. It is paying £2.8 million in business rates this year, an increase of over £2.7 million from the £80,000 it paid in 2008. Why the sudden growth? What did Lewisham council do to encourage that growth? The honest answer is very little. The business did not undergo development, expand its occupation or intensify the use of its site. Basically, the company had to pay business rates on the fibre-optic cables it had laid across London. Its offices in Lewisham are the biggest it has in London, so Lewisham collects the £2.8 million. What does that experience tell me? It exemplifies how an increase in business rate income may have very little to do with the actions of the local authority and that, although economic growth might be encouraged by a council, unless a range of other positive factors coalesce, businesses may not grow and start-ups may not emerge.
Old Street’s silicon roundabout was always more likely to develop in Old street than, say, Catford. Why? Old Street is on the tube map and Catford is not. Extend the Bakerloo line to Lewisham and on to Catford and we might have more of a chance. Even if we regenerate Catford town centre, would we be able to woo those high-tech start-ups from Shoreditch? I suspect not, because businesses like to locate next to other similar businesses—the agglomeration economies we all learnt about in our geography lessons—and success breeds success.
I believe that councils have differing potential to attract and grow business in their areas, and I do not understand why that gives local authorities the right to grow their resources in order to be able to provide extra services to their local population. The factors that determine growth in an area’s business rate income will sometimes have little to do with what a council is or is not doing. It will never bear any relation to the number of elderly people who require care packages or the number of children who require child protection plans. Linking the two, albeit through a convoluted system with all manner of supposed checks and balances built in, does not seem right to me. I cannot help but think that this is another case of the Government trying to pass the buck and shift the blame for their own failings. Councils are not the reason why the economy is flatlining, but they might be part of the solution. The ultimate responsibility lies with the Government.
Damian Collins (Folkestone and Hythe) (Con)
In the short time available I wish to focus my remarks on business rates and tax increment financing. I will pick up on an issue that has been raised throughout the debate, particularly by Opposition Members, which is that the partial retention of business rates is unbelievably complicated and that it is somehow a centralising step; it is anything but that. The fundamental principle is incredibly simple: it is about creating a mechanism whereby there is a greater degree of common cause between business growth in the business community and the decisions a local authority might take.
I have heard no one in the debate support a totally localised system, with councils keeping every single penny of business rates. That would exacerbate the problems that Opposition Members have spoken about, which is why that is not what is set out in the Bill. A totally nationalised system would be totally centralised, taking business rates completely away from local authorities. What is proposed instead is a very simple and powerful idea: giving local authorities, in a fair way, the power to retain some of the business rates they collect, creating a much more physical link between them and the local business community. When we talk to constituents, we often find that they think that that happens anyway. Some are surprised to learn that business rates are simply passed up the chain, and that the link between the local business community and the local authority is not there to the extent that it used to be.
That link will help councils to develop proactive strategies on regeneration beyond those they have at the moment, and to develop better relationships with their major employers, so that they can work together to see how they can foster business growth. Although these are difficult economic times, some businesses are looking to expand. I see them in my local authority, and the council is having discussions with them on what it can do. The business community wants a greater sense of urgency on the part of local authorities—even local authorities that have a good relationship with their businesses—in planning decisions and consultations, and in working together and saying, “What can we do to help you to grow your business?”
I agree with the hon. Member for Lewisham East (Heidi Alexander) that it is difficult to see how growth can be stimulated in local authorities where there are pockets of deprivation and low business activity. Such problems have existed in Folkestone harbour and the east end of Folkestone since the departure of the channel ferry business and the closure of the traditional port. There, a private investor and philanthropist has invested to create a new business community based around the arts and creative industries. I wholeheartedly support that scheme, which has been driven by big private investment, but the challenge is to ask what the local authority can do alongside that to help drive the process forward, rather than simply taking planning decisions and having a friendly relationship. Can the local authority look to invest alongside that development, to create a new raison d’être for that local economy that will attract other businesses?
In that respect, the tax increment financing powers are interesting and important, because they create a mechanism whereby local authorities can borrow to invest to improve business infrastructure to attract business. We know that in areas of market failure, market forces on their own are not enough to drive regeneration. There are fundamental reasons why the business base in that area has collapsed, and it needs special help and support. The tax increment financing powers in the Bill can deliver that, and the incentives for local authorities to grow their business rates. They will know that doing so gives them more money to spend on local resources. The powers will also give local authorities an argument to make to local people when they are considering planning applications for business expansion. They can say, “The community gets something back from the local authority’s proactive relationship with the local business community and from seeing business rates grow.”
Tax increment finance powers enable local authorities to behave in the way that a major commercial landlord of a large estate would behave. In most parts of the country, town centres are not dominated by a single landlord, but we find that situation in the centre of London. Such a commercial landlord will invest heavily in improving the quality of the business stock and business infrastructure, in the knowledge that they will gain when the higher rents come in.
Some landlords that operate in central London, such as the Grosvenor estate, which operates a mixed commercial and residential portfolio, invest in commercial areas and give discounted rates to make the community a nicer place to live, knowing that they can recoup the discount through the residential income they get from rent on their properties. They take a view on investing in their estate and getting the money back. In areas of the country where no single dominant landlord can do that, taking such a view is a role for local authorities. With the new relationship with the business rates and the powers of tax increment financing, we give local authorities a way to develop a local plan for regeneration that will be better and more targeted than any Government Department could ever devise for that community.
Bill Esterson (Sefton Central) (Lab)
I shall speak about the business rates proposals, the many gaps in the Bill and the unanswered questions. The councils that have faced the biggest cuts will lose most from the proposed changes to business rates. The impact of the local government cuts on businesses will take many years to work their way through, because there will be less money in the economy where the cuts in the public sector are greatest. In Sefton the cuts are already affecting businesses that rely for much of their trade on the public sector. The economy in Sefton, Liverpool and across the north-west will face greater pressures than the areas where the cuts have been far smaller.
Steve Rotheram (Liverpool, Walton) (Lab)
Would my hon. Friend be surprised to hear that when I asked the Secretary of State, in this very House on 18 July, whether he would
“guarantee that Liverpool will not see a real-terms cut in its funding”
in the first two years following the changes, he said:
“Yes, it is going to do better out of this system”?—[Official Report, 18 July 2011; Vol. 531, c. 670.]
Bill Esterson
I am grateful to my hon. Friend, who is absolutely right. The Secretary of State made similar remarks in his speech today, and I will explain why he is completely wrong.
The reality is that even if the starting point for business rate retention is after the main element of the cuts has gone through, some businesses will struggle to survive in areas where the cuts have been greatest. Councils in those areas will therefore experience falling business rates, with a further impact on the services that can be provided by the councils that have faced the biggest cuts. Areas such as Sefton and Liverpool have some of the most deprived communities in the country. The scale of the Government’s cuts has already hit those communities harder than the more prosperous parts of the country, and that includes the loss of services to some of the most vulnerable.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
Does the hon. Gentleman recognise that in the past five years Sefton has had an annual increase in its business rate of 6.1%, and Liverpool has had an annual increase of 8.2%?
Bill Esterson
I am glad the Minister made that comment, because it gives me the chance to make the point that that was before the massive cuts in Sefton, Liverpool and other metropolitan boroughs made it unlikely that such developments will continue. It is very likely that we will see a reduction in business growth as a result of the impact on the economy.
Bill Esterson
The Minister says it is the same old record—but it is the same old Tories doing the same old things to the most deprived communities.
The Government’s proposals in the Bill are unfair and hit the poorest communities hardest. They also ignore the reality that, as my hon. Friend the Member for Lewisham East (Heidi Alexander) said, councils have a limited role in promoting growth. Only authorities that grow business rates above the level of the Government’s national assumption will benefit, while the others will lose, so the gap between the most prosperous and the less well-off will widen.
The Secretary of State retains many of the powers relating to business rates. The centralising tendency is very much in evidence, and the more the Bill is scrutinised, the clearer it becomes that localism will be dished out in very small doses, at the bidding of the Secretary of State. The Treasury is to take a cut of any growth in business rates. That undermines the stated aim of incentivising local councils, and it risks limiting the likely take-up by the vast majority of councils—a point being made by many local authority leaders.
I am aware of the many concerns about the plans for the local retention of business rates. Many questions still need to be answered. The Government plan to reward councils that exceed national growth expectations, so they will, by definition, artificially punish areas that have low growth, such as rural areas or areas where major industries have recently shut down.
The measures will also penalise areas such as Sefton, where there is a shortage of available industrial land, and where there are limits on the potential for economic development. Sefton is in the process of putting together its core strategy, and it is struggling to find the development land needed to benefit from the Secretary of State’s proposals. I hope he will take on board the very real concerns not only of council leaders, but of businesses that face the problem of being unable to create growth because they do not have land available.
Given the Government’s record in applying the current cuts unfairly, there is no confidence that they will not do the same with business rates localisation. Incentives for local councils to generate economic activity are one thing, but a system that undermines local authorities serving deprived communities and boosts those in least need is not the way forward. The Secretary of State should think again.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
At this stage of the debate we always try not to double up on what others have said, but the hon. Member for Sefton Central (Bill Esterson) said it would be fine if the present local government finance scheme had actually dealt with the differences between authorities. Many Opposition Members have talked about perverse incentives and about a lot of history, but let me explain some history.
I spent 17 years as a Conservative member of Hackney council, which the shadow Secretary of State referred to as one of Britain’s poorest boroughs. When I joined the council as a Conservative—as Members can imagine, there were not many Conservatives on Hackney council—it used to proclaim itself Britain’s poorest borough for a reason. There was almost a perverse incentive for it to do so. I am not saying that Labour councillors did not want to see the council and its tenants better off, but it was in their interests, given the funding regime, to exaggerate how badly off Hackney was. It meant that they could get more from the rate support grant.
That perverse incentive has continued. I shall give another example from those days and my early learning experiences in local government in the 1980s. I used to sit on the housing committee, and once while discussing housing benefits I made what I thought was a stirring speech on behalf of Hackney’s tenants when the Labour party wanted to increase rents by 6.8%. I was complimented afterwards on the standard of my speech. Members might not believe it but I was a new young councillor then. But I was told, “Actually Eric, it doesn’t matter. They’re all on benefits so we can just put up the rents.”
We are not saying—although I understand that the Opposition have tried to say it—that the change proposed by my right hon. Friend the Secretary of State is a massive revolution along the lines of the community charge, but, as other Government Members have said, it will mean that we can begin to provide councillors with a way of raising extra money by entering a bargaining system with business. The main thing that counts when encouraging business growth is a person’s ability to put their own money on the table. At the moment, though, there is little in the system to give councillors that ability. I believe that these reforms are the first step along that road.
Members have mentioned the north-side divide. I represent a part of the north, and my district councils are looking forward to these reforms. For example, Lancaster council can now envisage finally being able to raise money off its own bat, go into partnership with local businesses and perhaps open that third bridge.
Mr Kevan Jones
Does the hon. Gentleman realise that his council will also have to take responsibility for council tax benefit, which will come with a 10% cut, so that although it could end up raising money locally it might have to use that to subsidise council tax benefits?
Eric Ollerenshaw
From what I hear from my councils, that is not the prospect that they are looking forward to. Lancaster council wants finally to build a third bridge, for which Lancaster has been waiting years. Wyre district council has been waiting years to open a railway line to Fleetwood, where a railway line currently exists, and by borrowing through some of these schemes it could open up new development plans to business. It is looking forward to being able to close the north-south divide.
My support for the reforms is based on the need to achieve growth. Like many Government and Opposition Members, week after week I meet businesses in the north-west, particularly in my constituency, that have the potential to grow but just want a little extra support. That might mean doing up the road on the industrial estate or providing a bit of extra shedding so that they can meet their orders. With these changes, councils will finally have an interest in encouraging that business. [Interruption.] Opposition Members might scoff, but as was pointed out, in particular by my hon. Friends the Members for Ipswich (Ben Gummer) and for Milton Keynes South (Iain Stewart), the problem is that local councils, for good or ill, have divorced themselves—or have been divorced by the system—from any real interest in encouraging and supporting economic growth.
The best councils have wanted to encourage growth. I take my hat off to those such as the hon. Member for Lewisham East (Heidi Alexander), whom I have met before in relation to this matter, for all the work that they have done to encourage that growth, but the fact is, as we all recognise, that some councils and council officers have seen little benefit in going out there to support and encourage business because it has not directly affected their income. These changes will at least start to address that situation.
I shall finish on a point that I have raised elsewhere. I think—I might be wrong—that under paragraph 37 of schedule 1 the Secretary of State could allow new types of enterprise zones. Why are we not encouraging university campuses to have their own enterprise zones? I know that that would cause problems with Treasury mandarins and their calculations, but we seem to have missed a trick, because we are talking about something that could be the very basis for creating and developing new businesses, albeit not on such a large scale. Once those businesses got that extra bit of employment, they would have to move off by definition, because of the nature of university campuses. That would mean getting the turnover that we want and would deal with the criticism of the old enterprise zones—that businesses moved in from other areas and stayed there.
Mr Kevan Jones (North Durham) (Lab)
I am pleased to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who is living in cloud cuckoo land if he thinks that this Bill will suddenly drop pennies from heaven on to his constituency and the north of England, to regenerate his and other areas. What we have before us today is an extension of this Government’s local government policy, which is about cutting local government finance, but giving the impression that the tough decisions that local councils are having to make are not the Government’s responsibility, but the responsibility of those very councils. Yesterday, for example, the council in Doncaster cut wages by 4%. The Government are saying, “Well, it’s your decision.” They are giving councils the baby and letting them decide how they slice it up.
I take exception to what Government Members have said about how local government is somehow not interested in regeneration. I spent 10 years on Newcastle city council, serving my final years as chair of the economic development committee. It was a council that put a hell of a lot of effort into regenerating both inner-city Newcastle and surrounding areas. Likewise, Durham, my current county council, is making a tremendous effort, and has done for several years, to try to encourage business into County Durham, but it has been hamstrung. Some of the things that the Government have done recently, such as abolishing the RDAs, have made it virtually impossible for the council to spend nearly £140 million of European regional development fund money. It is sitting there, ready for development, but because of the constraints put on the council by this Government, no one can access the money.
The point about the proposals on business rates is that, yes, local government can have an impact on regeneration; but it is a damn sight harder in County Durham, even with the tremendous efforts of local business and the county council to secure inward investment, than it is in Canary Wharf or other prosperous parts of south-east England. We are not dealing with a level playing field from day one; indeed, local councils are not even the only driver for getting inward investment. It is far easier for people to make investment decisions down here—we only have to look at the investment and the number of cranes going up in the east end of London now, in a recession, in hard times. We can only dream of that kind of investment in parts of the north-east. Every single inward investment decision that has been taken for the north-east has been hard fought for.
The idea is that this small change will somehow make a real difference, but it will not. We will end up with a two-stage Britain, where this measure will be good news for local councils in the south-east of England—I accept that certain parts of the south-east of England are depressed and deprived—because, frankly, they will not have to work very hard to get inward investment and an increase in business rates, whereas that will not be the case in more deprived areas. Over time, we will clearly see a disparity, which will lead to a two-speed Britain, with things made even harder by this Government, who have abolished things such as the RDA in north-east England.
Steve Rotheram
Does my hon. Friend agree that all this is the continuation of a policy, which was tried out in the ’80s by Thatcher and Howe, of managing the decline of northern cities, especially areas such as Liverpool?
Mr Jones
It is, exactly. Let us look at what this Government and this Secretary of State have done on local government. I take my hat off to him, because he is rewarding his friends and his councils in the Tory heartlands. The idea is that we can somehow just write off great cities such as Liverpool and Newcastle, or other north-east cities, as if it does not matter. Do the Government actually care? No, I do not think they do.
The Secretary of State said in response to my intervention that Durham would gain under the new proposal. I would like to see the figures showing how Durham will gain, because the county council has seen from its own figures—he is using 2011-12 as the baseline—that it will lose out. This is being rushed, and it will become clear, over time, that it is not the radical approach to local government reorganisation that some people suggest. It is in fact a way of ensuring that prosperous Conservative seats will benefit from the measures at the expense of some of the poorest communities in Britain.
I want to turn now to the scandalous situation relating to the localisation of council tax benefit. This measure comes with a 10% reduction from day one, and it will disproportionately affect constituencies such as mine, and more deprived areas with larger numbers of people in receipt of that benefit. Listening to the Secretary of State talking earlier, it sounded as though he thought that those people were the feckless poor. I must remind him that a lot of low-paid workers, who are working blooming hard every day of the week to keep a roof over their heads, rely on council tax benefit. Over a period of time, those people will get the impression that these decisions are nothing to do with the Secretary of State, and that it is the local council that decides how to divide the money up. This measure will have a disproportionate effect on those areas with a large number of people in receipt of council tax relief.
Mr Pickles
I am sure that the hon. Gentleman suggested only inadvertently that I was talking about the feckless poor and the like. May I respectfully remind him that I was quoting the Leader of the Opposition and the shadow Secretary of State for Work and Pensions? It is with them that he should take up this matter, not me. Do not put words into my mouth; those were their words.
Mr Jones
I was not putting words into the right hon. Gentleman’s mouth, but I have to say that he is continuing the mistaken idea that every person in receipt of council tax relief is unemployed and useless. They are not; they are hard-working, low-paid families—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Those on the Government Front Bench need to come to order. I think that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) is getting carried away.
Mr Jones
Unfortunately I cannot, as I have very little time left.
Let us not be conned by the Secretary of State’s strategy. In the name of localism, he is pushing decisions down to local government, but cutting grants at the same time. He will then try to say to local people, “It’s nothing to do with me, guv. It’s your local council that is doing this.” That strategy was used by the Conservatives in Canada in the 1990s, and it is clear that this Government have learned from that play book and want to ensure that local people do not blame them but instead blame their local council, which will have been hamstrung by the grant cuts. It is about time that people saw through this bluster from the Secretary of State.
Jackie Doyle-Price (Thurrock) (Con)
I would like to give an enthusiastic welcome to the provisions in the Bill, unlike the previous speaker, the hon. Member for North Durham (Mr Jones). It is surely right to expect local authorities to support and nurture the business interests of their localities. I believe strongly that the provisions of the Bill will act as a powerful incentive to local authorities to consider what they can do to facilitate business and economic growth. It is also clear that, if localism is to have any meaning, we must re-establish the link between local authorities and their local business communities.
It is my view that the Bill will also make local government finance fairer, and I would like to illustrate that point with reference to my own local authority. The hon. Member for North Durham might be interested to note that my local authority is Labour-run, which might help to scotch the myth that it is only rich Tory boroughs that will benefit from the measures. Thurrock is a net contributor to the national pot, as we have a strong non-domestic rate base. At present, Thurrock collects some £98 million, but retains only £52.2 million.
That is not to say that Thurrock is a rich locality, however. As a borough, it does not score highly on indices of affluence; indeed, we have a number of communities that score highly on indices of social deprivation. The ward of West Thurrock and South Stifford has some communities that are in the lowest 10%, for example, yet it generates some £64.2 million in non-domestic rate income, which is more than is retained by the whole borough of Thurrock. That ward is clearly making a significant net contribution to the Exchequer through all kinds of taxes. It is therefore fair and appropriate that some of those companies’ business rates should be retained for use in the local community, and I am pleased that the community will benefit from the growth in that area in the future.
We should note, however, that there are consequences for a local area that enjoys a vibrant business community. In Thurrock, for example, high volumes of heavy goods vehicle traffic and road congestion cause a nuisance for residents. If we expect local authorities to take a more balanced approach to leading and managing the interests of the whole of their localities, they must have a stake in the economic success of that locality. Without it, there is simply no incentive to think beyond short-term electoral advantage.
I am quite clear that the current system does not encourage local authorities to take a balanced view. It actively encourages local authorities to ignore the needs of the local business community. After all, they have no votes. At best, local authorities take local business for granted. At worst, they view it as an inconvenience. I have certainly received representations from the business community in my constituency to the effect that the local authority does not understand their needs and is unsympathetic to them. Businesses may not have votes, but their needs are important if we are to build strong and successful communities and a successful economy. This Bill will encourage local authorities to be more responsive to the business needs of their communities and, in so doing, they will promote growth and jobs—and who can argue with that?
The Bill proposes that the Government should be able to retain some of the funding where local authorities benefit from disproportionate growth. I am quite interested to hear more detail about this. As I have said, Thurrock is already a substantial net contributor in respect of business rates. That contribution looks set to increase. We have massive inward investments by Dubai Ports; the port of Tilbury is expanding after an already successful 125 years; and, of course, the Lakeside shopping centre is building on its existing success. I am therefore interested in how the Government intend to operate the levy when a local authority receives a disproportionate increase in revenue, and in how to make sure that this is handled fairly. In particular, I remind Ministers that in supporting business growth, there are consequences for the locality. If we are to encourage local authorities to use tax increment financing and borrowing against their future returns, they need to be clear about just how much they will get from the expansion.
In finalising the provisions for the levy, I hope that Ministers will bear in mind the strong principle that local authorities must receive a significant stake in return for encouraging additional investment. Ultimately, we need to make it easier for contributing authorities to contribute even more to the Exchequer through business growth and, as my right hon. Friend the Secretary of State said in his opening remarks, to make the pot of non-domestic rates even bigger.
Alex Cunningham (Stockton North) (Lab)
With about 186,000 people and two MPs, the Stockton borough is one of the smallest unitary authorities in the country. It is also one of the best—it was recently council of the year, and for several years in a row, it has been in the top six authorities for its management of resources.
For all its small size and success in managing resources, some 500 council jobs have gone since the coalition Government came to power. Still more will doubtless go as the attack on local government and the services it provides continues with this Bill. The lost jobs are adding hugely to increasing unemployment in an area where the jobless rate is already much higher than at any time under the Thatcher and Major Governments when areas such as Teesside and the wider north-east England economy were left on their knees.
Now we have a grand statement from the Government: “Transparency, economic growth, flexibility, making communities masters of their own economic destinies”—all this is promised by the Local Government Finance Bill. These are fancy words that we know, and the Government must know, are an attempt simply to be upbeat in the face of a dire and failing economic policy that is in danger of driving our country back into recession. The jobs lost in my borough are reflected many times over across the country, and the charging white horse of the reform of business rates will not matter a jot—well, not for the worst hit areas in the economy. The reverse will be the case.
What Government Members fail to acknowledge is that local authorities cannot all be equally alluring to business—however hard they try. Business taxation revenue varies hugely from place to place. In 2010-11, Westminster collected 33 times more than my neighbouring borough of Middlesbrough. The changes will widen the gap between authorities capable of promoting growth—mainly in the south—and those where growth is slow or non-existent.
Far from there being, to quote the exact words of the Secretary of State,
“no motivation for councils to support local firms or create new jobs”,
local authorities have embarked on economic development in their area for countless years on the basis that this will attract jobs and so benefit their area. It is the right thing for local authorities to do.
I have been disgusted this evening by the denigration of local authorities, their members and their officers. That the Secretary of State could make such an insulting statement shows how little he understands, despite his long service in local government, the way in which it works. The idea that there could be some overnight entrepreneurial revolution is sheer fantasy.
I am particularly shocked that Ministers should believe that the 10% cut in council tax benefit will somehow magically reduce the number of people who need it. In fact, it will be squeezed at precisely the point at which there is the most need for help among low-income households. Pensioners and vulnerable households may be protected from the cuts, but that means that the whole of the 10% saving that local authorities must make will fall on the unprotected group that consists mainly of the working poor.
Jim Shannon
Will not the 10% reduction also mean more poverty and homelessness? How will that affect the hon. Gentleman’s community?
Alex Cunningham
I have no doubt that communities such as mine, and perhaps the hon. Gentleman’s, will be affected. I believe that we will see more poverty as people try to cope with much lower incomes.
In many instances, the gains that the Government suggest will be made by the working poor as a result of the £1,000 increase in the personal allowance for income tax will be wiped out by the reduction in council tax benefit. The theoretical 10% reduction will equate to a loss of £1.7 million for the Stockton authority area, £1.2 million of it in my constituency. Given the exclusion of pensioners from the change, those affected are likely to be hit by a 20% reduction, which will contribute to a further increase in poverty. The Government’s proposals merely transfer one of the national costs of rising unemployment to councils and local taxpayers, creating a serious risk that every resident will face further cuts in services that are already under threat.
I do not often find myself sharing many opinions with Government Members, but I simply could not disagree with the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), when he said:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
As it is, the Bill tees up the poorest to bear the greatest burden. It neuters local authorities other than those in the most affluent areas, preventing their development, and it will lead to further job losses throughout the country, with no consolation for the nation as a whole. I will oppose the Bill tonight.
Bob Blackman (Harrow East) (Con)
I believe that the first three years of the coalition Government will be remembered for three things: constitutional reform, dealing with the economic mess bequeathed by the Labour party, and localism. The Localism Act 2011 gave local authorities, and also local people, power to determine what happens to them. However, we have a hideously fiendish system of local government finance to deal with the money that is spent on supplying services, and I am delighted that we are finally dealing with that.
I am not a stranger to the proposal that business rates should be retained by local authorities. I advanced it at the 1994 Conservative party conference in Bournemouth. Sadly I could not persuade the Conservative Government of the day to implement it, but I am delighted that we are taking the first steps towards ensuring that business rates raised locally are retained locally, because that is an ideal way of providing incentives for local decision-making.
Of course, retaining business rates at local level will require a complicated system, from which there will be gainers and losers. Let me give two examples relating to a local authority of which I was a member for some 24 years. When Wembley stadium was demolished and taken out of the business rate pool, £1 million a year was effectively taken out of the income from business rates. That could have a disproportionate effect. Had the new system been operating at the time, the local authority would have lost the money for five years—some £5 million of income. Therefore, if an employer goes out of business there must be some means of compensating the local authority to address any fall in income. The provision encouraging local authorities to promote business in their communities is important.
There has also been an issue in the suburbs. The last Labour Government encouraged—almost promoted—businesses closing down and sites being turned over to housing. As a result, in the suburbs business rate income has dropped, and it continues to fall. We must take account of that as we encourage local authorities to promote business in their areas.
Local authorities have almost done away with promoting economic development as a main means of operating. The Bill will transform that. Local authorities will need to become business-friendly and promote business and jobs in their local areas. That is clearly the right way to proceed.
Local authority finance has changed greatly. Housing benefit comprises almost one third of the money going through most local authorities’ books. Rightly, that will be taken away. The administrative costs of housing benefit were outrageous. However, I have concerns about the implementation of the council tax benefit in such a brief time scale and the local impact of that. Almost everyone who is in receipt of housing benefit receives council tax benefit as well. Now that housing benefit will be administered through the Department for Work and Pensions, it makes sense for council tax benefit to be similarly administered. The situation currently proposed is bizarre, to put it mildly.
Turning to tax increment financing schemes, many local authorities have huge historical debts, which were incurred as a result of the development of housing 30 or 40 years ago. Are we going to allow local authorities with such huge historical debts to borrow against future business rate income, and thereby incur yet further debt, in order to build more housing or undertake other projects within their local authority control? That would add hugely to their debt and to the amount of interest they are going to have to pay, and it will have a disproportionate effect on their total budgets. We must look at this, and make sure things are administered fairly and properly.
This Bill is a welcome step, but the devil is in the detail and I look forward to debating that as we take it through its various stages to becoming an Act.
Sheila Gilmore (Edinburgh East) (Lab)
I want to talk about council tax benefit. The hon. Member for Harrow East (Bob Blackman) is one of the few Government Members to have raised concerns. Another Government Member who raised concerns served with me on the Welfare Reform Bill Committee, where we discussed this issue extensively. He, too, expressed considerable doubts about the council tax benefit proposal, especially as another Government Department, the DWP, has a project for universalising benefits under one umbrella—which might not be as easy as it thinks. Why keep council tax out of that?
That is a very good question. One of the main reasons that the Government give for making such a huge change in welfare law in this country is to incentivise work and to make sure there are not the kind of perverse incentives that they think arise as a result of things such as different tapers on different benefits. There are, indeed, different tapers at present for tax benefits and housing benefit, but if we create a situation whereby everything apart from council tax goes into universal credit, we will immediately recreate an anomaly. That will have a work disincentive unless it is very carefully worked out. We must question why two major Departments do not seem to be talking to each other about that.
The 10% reduction is a substantial reduction in the money available to local authorities to provide assistance to people on low incomes who need help. It should not simply be seen as something quite minor. I thought, particularly having worked on the Welfare Reform Bill, that this was primarily about saving money, but having read a lot of the comments in the consultation about this Bill, I realise that it is part and parcel of the Government’s view of local authorities: that they are not trying hard enough to get people into work. The Housing Minister said to the Select Committee on Communities and Local Government that the 10% reduction would encourage local authorities to make sure that business parks got off the ground and that people got into jobs—because of course, if people had jobs they would not then need council tax benefit. Actually, that is not true.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making a really interesting point about the perverse incentives that the Bill will introduce. Does she accept that in fact it will really clobber hard-working families who are struggling to make ends meet on low-paid work, and who rely on council tax relief to ensure that they can afford to work? In areas such as mine, it is those low-paid jobs that people will give up.
Sheila Gilmore
It is people in work who will suffer in particular. Of course, this localising Government are not prepared to leave even their own local authorities to decide how the new council tax benefit should be distributed, because they want to insist that pensioners be protected. That is all very worthy, but protecting pensioners creates a greater burden on other people. There has even been the somewhat vague suggestion that some other vulnerable groups will be protected. The definition is not quite clear, but if other people are to be protected—which may not be a bad thing—the burden on those who are in low-paid work will be increased even further.
This is the direct opposite of what the Government say they want to do in incentivising work, and I do not believe that making such a change will alter the way local authorities work. In fact, I do not think we need to do that. This Government are very good at tilting at windmills, and the windmills are creations in their own head. We have heard about one from various speakers today, and it runs like a thread through the consultation: the suggestion that local government is not interested in creating jobs or encouraging development and industry. I do not recognise that feature of local government. Indeed, during my 16 years as a councillor, we were more often accused of favouring business over local people at various times. We created a large office park development in the city, which would not have happened had the local authority not put together the land assembly and the infrastructure and encouraged that to happen. That happened without having our local business rates in our own hands.
I simply do not recognise this false stereotype. It shows that a Government who say they believe in localism actually have a very poor attitude to local government and those who serve it. This Bill will be unhelpful in a lot of ways, not least because it will make the working relationship between Government and local government worse, not better. There is no respect in it for the very hard work that local authorities are putting in. We should not be perpetuating such a factless myth when we are trying to encourage localism.
It is not too late. One Government Member suggested that it is somehow too late to deal with the council tax benefit, but even the Welfare Reform Bill has not yet passed into law. It is not too late for the Secretary of State and his colleague in the DWP to get together and find a better system.
James Morris (Halesowen and Rowley Regis) (Con)
Britain has one of the most centralised systems of local government finance in the developed world, which is why I support this Bill in beginning the process of removing that centrally controlled straitjacket. It is also why I welcome the provisions for the relocalisation of the business rate as a significant step forward in achieving the devolution of financial power. I have been a strong advocate for relocalisation for a long time, in my capacity as chief executive of Localis, the local government think tank, because I believe that relocalisation of the business rate will provide a significant incentive for local authorities to drive business growth. It will also, as the Secretary of State said, significantly change the culture, so that local government will no longer be looking upwards to the centre for grant funding but will be looking for locally driven solutions to issues of economic development.
I recognise, as others have done, the important contribution that tax increment finance can also play in providing a new and innovative mechanism of funding for local authorities, and I very much welcome the Bill’s provisions on TIFs. Dudley metropolitan borough council, one of the local authorities in my constituency, is already looking at projects that it might be able to convert into TIF-funded infrastructure development, which is critical. I welcome both those central provisions.
I also particularly welcome the opportunity for enterprise zones to retain a proportion of the uplift in business growth and in business rates, because that is going to be a good way of incentivising and developing local enterprise partnerships and offering them a long-term income stream. I very much welcome the Bill as a significant step forward and major milestone in the Government’s approach to localism. It is a very important first step in moving towards a genuine devolution of financial power, so I very much support the provisions and welcome the Bill strongly.
Mark Pawsey (Rugby) (Con)
I thank my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), a fellow member of the Select Committee on Communities and Local Government, for keeping his remarks so brief in order to enable me to make one or two comments of my own.
Allowing local authorities to retain part of the business rate is a key part of the Bill and I wish to speak from the perspective of a business owner, which is what I was for 25 years before arriving in this place. Business rates were a significant cost to my business, as they are to every other business, being the third largest tax we paid. They cost several thousand pounds a year, and they increased as my business grew and moved to larger premises. As a business man, it came as a bit of a shock to me, before getting involved in politics, to realise that the business rate bill that I paid to my local authority was not spent by my local authority in pursuit of services in the area in which I was based, but went into a central pool. It is entirely right that a proportion will in future be retained by the local authority, because promoting growth is a key role for local authorities. It is also very important to business owners, because that growth develops new customers and new clients for businesses and provides a better situation for staff.
I wish to discuss one issue not covered by the Bill, which is vacant commercial rates. There was an opportunity to extend relief to businesses that own vacant premises. The rating of those premises is causing hardship to the business community and it is making it difficult to encourage business growth, because there is currently no speculative building of business units and it has encouraged the demolition of vacant older industrial buildings so that the tax can be avoided. I wish to distinguish that approach from the provision on empty homes, because the housing market is distinctively different from the commercial property market. I welcome the empty homes premium, because we have 700,000 vacant homes and it is important that we provide an incentive to bring them into use.
I wish to discuss a final point about the influence of planning permissions. We await the outcome of the national planning policy framework, but there is a risk that the retention of business rates could become an additional incentive to grant planning permissions for developments that are not necessarily in the most appropriate locations. I hope that that concern will be addressed by a robust commitment to town centres first in the final draft of the NPPF, as the Select Committee report suggested.
I welcome the Bill. It is consistent with the Government’s decentralisation and localism provisions, it is a step change away from the dependency culture we have had up until now, and it pursues a strong localism agenda that will prioritise economic growth, which I will always support.
Helen Jones (Warrington North) (Lab)
This has been an interesting debate, marked by a number of contributions from people with real expertise in local government finance and real concern—from those on the Opposition Benches—about what the Bill means for their communities. I do not have time to do justice to them all, but my right hon. Friends the Members for Wentworth and Dearne (John Healey) and for Greenwich and Woolwich (Mr Raynsford), both distinguished former Ministers, made some serious points, as did my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee, supported by my hon. Friends the Members for Stalybridge and Hyde (Jonathan Reynolds), for Plymouth, Moor View (Alison Seabeck), for Stoke-on-Trent Central (Tristram Hunt), for Lewisham East (Heidi Alexander), for Sefton Central (Bill Esterson), for North Durham (Mr Jones), and for Stockton North (Alex Cunningham). They were all united in their deep suspicion of the Government’s motives and they are right to be, because as usual the Government began with grandiose declarations about what they intended to do, but that ended in failure.
There has been a failure to look properly at local government finance as a whole, a failure to consider need and a real failure to accept the Government’s own role in promoting economic development. We have ended up with a deeply flawed Bill in which we are asked to write a blank cheque for the Secretary of State. He will decide the tariffs and top-ups, he will decide the amount of the levy and he will decide who gets a safety net payment. He is rapidly becoming the Del Boy of local government finance, selling us all dodgy schemes while he sits there, rubbing his hands and saying, “You know it makes sense.” We are not buying, and we are not buying because we know his record. We saw how in the so-called Localism Act 2011 he gave himself 100 more powers. We have seen him design a local government finance settlement to centralise power and devolve the blame. That is exactly what the Government are up to now, and it was clear from the moment of their consultation, when they said that
“local authorities can be reluctant to allow commercial development and promote economic growth”.
I ask the Government, as I have asked them before, to name one such local authority. I know of no local authority—certainly no Labour local authority—that is not desperate to attract jobs and growth. It is not local councils that have stalled the economy, but this Government, who inherited an economy that was growing faster than the EU average and faster than that of the United States, and who destroyed it with a slash-and-burn approach to public spending. Of course, the Secretary of State is a true believer in that. He began in 2010 with in-year cuts to specific grants, which by their very nature target the most deprived communities. He then designed a local Government finance settlement that we are asked to accept as the baseline for business rate redistribution and that is breathtaking in its unfairness.
One need only look at the heat maps to see where the cuts fall: the north-east, Yorkshire, the north-west, parts of inner London and parts of the midlands. As a result of the Secretary of State’s settlement, by 2012-13 Liverpool will have lost spending power of £235 per person, Hartlepool £183, Newcastle £144 and Wokingham—the Government’s favourite council—just £1. That is what we are asked to accept as the baseline—a baseline, moreover, that includes the new homes bonus and the 2011-12 council tax freeze grant. That all gives advantages to authorities with a high tax base over those with a low tax base. The system starts from inequality and it will go on to entrench it further.
There is nothing in the Bill about the infrastructure that many areas need to allow them to develop and there is nothing about the surplus capacity in many of our cities. Liverpool has empty office space that is already subject to rates, which could create 15,000 jobs if brought back into use, but hardly any extra income for the local authority. An area such as Halton has 22.3% of its business property with an empty rating assessment. Again, that could create more jobs but hardly any extra income for the local authority.
The big black hole in the Government’s Bill is any recognition of their own responsibility to promote growth and help weaker economies to grow. It is not surprising then that they have even failed to address where business rates are a proper measure of economic growth at all. Commercial and retail premises generate far more business rate than manufacturing and small businesses. Small business start-ups, internet businesses and sectors such as tourism are vital to our economy but generate little in business rate. Nationally, we need those businesses. We need the skills they bring, the innovation they develop and the exports they gain. It is typical of the Government’s muddled thinking that they claim to support manufacturing and small businesses but then design a scheme with a built-in incentive for retail. No wonder the Secretary of State has been told by the leaders of local authorities in manufacturing areas that the Bill gives preference to retail over manufacturing.
The Bill also gives preference to the rich over the poor. Under the scheme, the gap between rich and poor areas and between north and south will widen—even if top-ups and tariffs grow by the retail prices index. It will widen even if all local authorities generate the same increase in business rates and council tax, because another thing that the Government have failed to consider is the different tax base of local authorities, particularly the different council tax base, which is not in the Bill at all. They have nothing to say about areas such as the north-east, where 56% of properties are in band A and 86% are in bands A to C. They have nothing to say about the difference between those areas and Surrey, for example, where 75% of properties are in band D or above. They have nothing to say about it because they do not want to address the problem of inequality.
The same is also true of the Government’s suggestion about the localisation of council tax benefit, which we will need to discuss in much more detail in Committee. The scheme will ensure that the people who are hit hardest will be the working poor—the people who go out every week to earn their poverty—and this from the Government who say they want to make work pay.
Another big thing that is missing from the Bill is any assessment of need. This Government with a Cabinet stuffed full of millionaires do not care about those who need local services. I know the Secretary of State is going to tell me that he is not a millionaire, but he hardly represents the squeezed middle, does he? The Government have nothing to say about areas such as Liverpool, which has seen a 73% increase in special guardianship orders since 2009, or Durham, where nearly 2.5 times as many people require home care as in Surrey. They have nothing to say about areas such as Halton, where 24% of the population have a limiting long-term illness. In future, those services cannot be safeguarded if business rates fall because the Bill introduces a postcode lottery in services and benefits. No longer will a person’s entitlement depend on their situation; it will depend on where they live.
It is for that reason that we oppose the Bill. It will increase the disparity between rich and poor; it will hit the poorest areas most; and it will in the end ensure, as my hon. Friend the Member for North Durham said, a two-tier, two-speed economy in Britain. For that reason, I urge my hon. Friends to oppose the Bill in the Lobby tonight.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
Some 26 Members have spoken in the debate, and I too apologise if I cannot follow every one of the interventions in detail. I appreciated the contributions of my hon. Friends the Members for Crawley (Henry Smith), for Mid Dorset and North Poole (Annette Brooke), for North West Leicestershire (Andrew Bridgen), for Ipswich (Ben Gummer), for Meon Valley (George Hollingbery), for Milton Keynes South (Iain Stewart), for Nuneaton (Mr Jones), for Folkestone and Hythe (Damian Collins), for Lancaster and Fleetwood (Eric Ollerenshaw), for Thurrock (Jackie Doyle-Price), for Harrow East (Bob Blackman), for Halesowen and Rowley Regis (James Morris) and for Rugby (Mark Pawsey), all of whom spoke from experience in local government and also, significantly and importantly, often from experience in business too, because one of the Bill’s objectives is to re-establish a proper link between local councils and the businesses that they serve and the communities who benefit from growth.
It has been in other respects, I confess, a classic curate’s egg of a debate, with some thoughtful and considered speeches and some of quite breathtaking banality. When I listened, with every respect, to the hon. Member for Warrington North (Helen Jones) talking about a golden legacy left by the previous Government, I realised we had finally entered the realms of illusion. While I bring the hon. Lady back to reality—and talking of experience—let me just tell her that this grandson of a London docker is not going to take any lectures on need from the party of Tony Blair.
The reality is that the Bill is a necessary measure to clear up the mess that the Labour party made of Government finance in 13 years. Two of the Ministers responsible have done their very best to defend a local government finance system which they regard as so wonderful that it should almost be a listed building, but which has been described by dispassionate observers as incomprehensible, complex, unfair and unable to provide a proper means of distribution.
It was interesting to hear references to the Lyons review, which the Labour Government sat on for three years, doing nothing. Lyons said:
“there are no coherent or systematic financial incentives that encourage growth either for”
councils
“or, more importantly for their communities.”
Labour did nothing; we are doing something.
“The current English model of equalisation is recognised as one of the most complex in the world”
said the Lyons review, which Labour set up and ignored when it did not give the answers it wanted. We are doing something about it.
The university of Plymouth—the hon. Member for Plymouth, Moor View (Alison Seabeck) spoke earlier—said:
“the four-block model is deeply flawed and generates an inequitable allocation of this major source of local authority revenue.”
The Labour Govt did nothing about that, although they had the information; we are putting it right.
Secondly, it is shameful—
Robert Neill
There has been little time, and I intend to make a few points, if I may.
Secondly, and particularly regrettably, there was the simplistic analysis and the misleading attempt in the debate to create a false north-south divide—particularly disgraceful, it might be thought, when one has only to look at the facts and observe that over the last five-year revaluation period, when the average business rate growth in England was 5%, the following authorities had business rate growth above the average, and therefore would have benefited more than average had our proposed system been in place: Doncaster, Durham, Greenwich, Hull, Liverpool, Manchester, North Tyneside, South Tyneside, Sunderland, Sefton, Stockton, Middlesbrough—[Interruption.] No, I am not prepared to take any lectures from Labour Members when they cannot get the facts right. I will give way once, briefly.
Helen Jones
Would the hon. Gentleman like to tell us how much was invested in those regions by the Labour Government to promote that growth—investment which has now been cut under his Government?
Robert Neill
That confirms my view that there is an illusion that the racking up of debt is somehow beneficial to this economy, and that is the reason why, I am afraid, in one aspect of the Bill, it is necessary for us to deal with the required deficit reduction in relation to council tax benefit—precisely because the only way in which we will get sustainable long-term growth in any parts of this country is by reducing the deficit that we inherited.
In tackling that important issue, the Bill seeks to meet the concerns of local government that the reform of the benefits system into universal benefit might have meant that there was no longer direct payment of those moneys to local authorities. Our Bill makes that point, but also gives local authorities the ability to design those savings in a way that reflects their needs and their priorities—which, as we all heard from the debate, vary from locality to locality. The unwillingness of Opposition Members to face that simple reality speaks volumes about the shoddiness of their analysis.
It is remarkable that, with one or two honourable exceptions, no attempt was made to pursue some of the important measures which have been put in place to safeguard the underpinning of the business rate retention system. Not only will there be a baseline to ensure that no local authority loses out at the start, but the system of tariffs and top-ups will be uprated according to the retail prices index so that the vast bulk of local authorities’ income will be protected, and at the same time, local authorities that are incentivised to encourage growth will always see some benefit coming through. Similarly, the hon. Lady referred to infrastructure, but she poured scorn upon the introduction of tax increment financing, which is exactly the means of unlocking some of that infrastructure—a model called for by all dispassionate observers, and for many years by Members of all parties, but consistently ignored by the Opposition. They seem to be stuck in—
Robert Neill
I have given way once and I shall not give way again. I am sure the hon. Lady will have plenty of opportunity to raise these matters when we debate the Bill in Committee on the Floor of the House. I find it amazing that the shadow Secretary of State complained about that. It says it all that the first comment that the shadow Secretary of State could make was a debating point that it was objectionable that we should take such business on the Floor of the House, where every Member can participate, since every one of their local authorities is affected by the proposal. That suggests that the Opposition had very few other arguments to deploy. It is a little like the consistent trotting out of the inaccuracy in the growth figures across the UK. When we are reduced to a sort of political re-run of “Z Cars”, we know we have won the argument because the Opposition have nothing else to put into the equation.
The reality is that for the first time the Government have taken steps to redress the balance in a system that is recognised across the world as not working. There is not an adequate linkage with local authorities. I believe there are local authorities of all parties that want to do the best by their community, but they lack the tools and the mechanisms to create that by encouraging growth in their areas. We are replacing a flawed system with one which gives them the scope for growth. I had hoped that Members in all parts of the House would applaud that. However, we get a degree of churlishness and carping, indicating that because the Opposition did not come up with the plan, they regard it as unworkable.
We will talk through the details of the Bill as we examine it in Committee, but it is worth noting that very many of the independent responses to the consultation favoured this reform. It is worth bearing in mind the fact that in 2008-09 the Communities and Local Government Committee said that relocalisation would give local government an additional tool to pursue local recession-proofing policies, and it is worth recognising that the new local government network, not normally associated with the coalition side of the House, said that it recognised the potential that the growth incentive presents to create new private sector jobs and prosperity.
Hon. Members ought to wake up to reality and recognise that what is being put forward is an important and valuable reform. I hoped that rather than voting against it, they would have endorsed it and worked with us to make sure that we have a lasting system of finance for the future.
Question put, That the Bill be now read a Second time.
Proceedings | Time for conclusion of proceedings |
|---|---|
Clause 1, Schedule 1, Clause 2, Schedule 2, Clauses 3 to 5, Schedule 3, Clauses 6and 7, new Clauses relating to nondomestic rates, new Schedules relating to non-domestic rates. | The moment of interruption on the second day. |
Clause 8, Schedule 4, Clauses 9 to 16, new Clauses relating to council tax, new Schedules relating to council tax, remaining new Clauses, remaining new Schedules, remaining proceedings in Committee. | The moment of interruption on the third day. |
Business without Debate
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
Before the right hon. Member for Blackburn (Mr Straw) opens his Adjournment debate, may I appeal to Members who are, unaccountably, leaving the Chamber to do so quickly and quietly, so that the rest of us can hear what he has to say?
Rail Services (Clitheroe, Blackburn and Manchester)
(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Jack Straw (Blackburn) (Lab)
Thank you very much for that, Mr Speaker, and for the opportunity you have given me to raise this important local issue of rail services between Clitheroe, Blackburn and Manchester in my first Adjournment debate at least in this century and going back a good part of the previous one.
With the Transport Secretary’s key announcement earlier this afternoon of the Government’s commitment to press ahead with the High Speed 2 line, today will go down as a day of great significance in the development of public transport in the United Kingdom. Of course I welcome that announcement, as I welcomed the earlier announcements to extend electrification to the Manchester-Liverpool and Manchester-Preston rail corridors. HS2 will not, however, be completed until at least 2026, and the north-west electrification schemes will not be completed until at least 2016. So this evening I want to make the case for the pressing and much more immediate improvements needed in the north-south rail services from Clitheroe, which run through Blackburn and Darwen, and into Manchester. I also want to seek the advice and guidance of the Minister on how we can break out of an apparent Catch-22 that is in the way of those improvements, whose benefits for existing and future rail passengers, and for the wider economy of east Lancashire and the north-west, will, we believe, be significant.
The campaign for improvement in the services is supported by all the Members of Parliament for the area, all the political parties and all the local authorities affected. My constituency neighbour, the hon. Member for Rossendale and Darwen (Jake Berry), is in his place and will speak immediately after me, and the hon. Member for Ribble Valley (Mr Evans) would be vocal in his support for this cause but for the fact that, as a Deputy Speaker, he can take no part in debates.
Let me set the scene. Rail services in our area run east-west and north-south, with the main interchange being at Blackburn. When I became its Member of Parliament in 1979, these services in east Lancashire were, like those elsewhere, in the shadow of Dr Beeching’s axe, and they were in a process of what appeared to be terminal decline. Some lines had been closed altogether or had had their passenger services ended. On other lines, double tracking had been replaced by single tracks, and service frequencies had been greatly reduced—that is the fundamental problem on the line under consideration.
In the 33 years since I became an MP, there have been some significant improvements in rail services. In the early 1980s, the Copy Pit line to west Yorkshire was reopened for passenger services. There is now an hourly fast service across the Pennines that, combined with a local stopping service to Colne, gives a half hourly east-west service throughout the day. In 1994, following a great campaign by rail groups in the Ribble Valley, with the support of the MP for that constituency and the county council and district councils, passenger services and stations from Clitheroe to Blackburn were reinstated. The new service has proved immensely popular.
Significant sums have been spent on station improvements. In 2000, Railtrack replaced the old and decaying train shed at Blackburn station with well-designed new station facilities, which were part of a £5 million regeneration project. That set of improvements has been augmented in the past few months by new buildings on platform 4 at Blackburn station, which were made necessary by the increased demand for rail services on both the east-west and north-south lines. Much needed improvements at Darwen station will be completed in April and regional growth fund moneys for the Todmorden curve, enabling direct services from Burnley to Manchester, have just been agreed.
Office of Rail Regulation data show that there has been a 90% increase in rail travel within the north-west in the 12 years from 1995-96 to 2007-08, exceeding by 20 percentage points the overall growth in all rail passenger journeys in Great Britain over the same period. The data also show that east Lancashire has been part of that extraordinary growth in local rail services in the north-west. There has been a 27% increase to 1.2 million a year in the number of passengers going through Blackburn station in the five years from 2004-05 to 2009-10 and an astonishing 46% increase in the number of passengers going through Darwen railway station, which is now 250,000 a year.
Overall, the north-south Clitheroe to Manchester line is forecast to be used by 1.7 million passengers this financial year, the highest patronage ever enjoyed by the route. The service developments that are already taking place at Manchester Victoria will put more stress on the service as connections become even easier to a larger range of destinations, including Manchester airport.
The irony is that alongside that catalogue of significant improvements, the one service that cannot be significantly improved at the moment is the line under consideration. The reason is very simple: the track between Blackburn and Bolton was singled in the 1960s. The result is that the maximum level of service that is possible to run on that line is that run today—basically, an hourly service with a half hourly service in the morning and evening peaks. Even maintaining that pattern of service is difficult as, because of the long sections of single track, delays become amplified, sometimes throughout the day. Overcrowding on the services can be intense, as all of us who use it can bear witness, and the quality of the rolling stock is poor on the whole—it is made up of the old Pacers and Sprinters of the 1970s and 1980s—despite the best efforts of Northern Rail, the train operating company. Essentially, other areas’ cast-offs are “cascaded” —I think that is the polite term—as new stock is brought in not in east Lancashire but elsewhere.
The solution to that systemically unsatisfactory situation is obvious: to double track some, although not all, of the line between Blackburn and Bolton, to lengthen trains and to improve the quality of the rolling stock. A great deal of technical work has been undertaken already on the key issue of doubling the track. The north-west rail utilisation strategy for 2007 put the “anticipated cost” of the necessary infrastructure improvement at “over £20 million”.
The consultants commissioned by the local authorities, Faber Maunsell, concluded in their 2007 report that a
“positive business case is achievable for some of the options”
under consideration. That said, the scheme has not so far scored highly enough on the standard cost-benefit analysis tools to feature in Network Rail’s confirmed investment programmes. The frustration that we all feel—the Catch 22—is that we know as a fact that there has been a huge increase in ridership even given the less than satisfactory frequency, reliability and comfort of the current service and we are convinced that pretty modest improvements in the scale of things would enable there to be dramatic improvements in reliability, frequency and ridership, with major benefits to the local economy. We see proposals elsewhere in the region and in the country whose intrinsic benefits appear to be no greater being more successful in the competition for funds, yet the formulae used do not appear satisfactorily to capture the economic and social benefits that we are sure will accrue from this investment. So, we look forward with optimism and anticipation to the advice from the Minister on how we can break away from the circular trap we are in and progress this scheme.
Jake Berry (Rossendale and Darwen) (Con)
Let me start by congratulating the right hon. Member for Blackburn (Mr Straw) on securing this very important Adjournment debate, which is vital to his constituency and mine. The railway link between Manchester, Darwen and Blackburn needs to be improved. As we have heard, the current service is infrequent and suffers from chronic overcrowding. Despite those problems, it is heavily used. Indeed, I was astounded to learn that there has been a 46% increase in the number of people catching the train from Darwen into Manchester in the past five years.
This evening, the right hon. Gentleman and I ask the Minister for advice on how we can proceed as local MPs in partnership with our local authorities and on a cross-party basis to achieve the doubling of parts of the line between Darwen and Bolton so that we can have a regular half-hourly service that is reliable not only at rush hour but throughout the day. Other works will also be required to improve the service, including the lengthening of platforms to enable longer trains to ease the chronic overcrowding problems. In terms of public infrastructure, the improvements we seek are relatively affordable. Independent estimates have costed them at around £20 million.
I do not want you to think that this is just the Jake and Jack line, Mr Speaker. Improvements would also benefit many other hon. Members of the House and would help residents in Salford, Bolton, Darwen, Blackburn and Clitheroe. My major concern is the Darwen dividend, as the local MP, and I want improvements in the line for my constituents. I draw the Minister’s attention to the overwhelming demand for an improved service, which has already been demonstrated by the increased use. Clearly, demand already exists.
Why is the improvement we seek necessary? Even with the current overcrowded and often unreliable service, 10% of the borough’s work force from Blackburn and Darwen commute to Greater Manchester to work. As a Liverpudlian, it pains me greatly to admit that Manchester is the north-west’s superpower, but unfortunately I have to say that that is correct. Independent estimates suggest that about 60,000 new jobs will be created in Greater Manchester over the next 10 years. That jobs and growth dividend must be shared across Blackburn and Darwen, with my constituents, and across the entire borough. We want this growth dividend in east Lancashire, which has some deprived areas. We need it. Some of the growth in jobs and industry will be linked to MediaCity, and the line we are discussing is vital to servicing that development. It passes through Salford Central, which is the nearest station to MediaCity.
Why would people in east Lancashire want to go to Manchester for jobs? It is simply about economics. People who work in Manchester are more highly paid than people who have a job within the borough. If we want those high salaries to be brought back into our borough by people bringing their money home at the end of the day to spend in our local economy, we need a regular rail service and a rail link that can be relied on. That, I hope, will be the Darwen dividend for growth.
Finally, I urge the Minister to take a close look at the scheme. As I have said, it is affordable and the cost would be outweighed by the social, economic and leisure benefits for all the residents of east Lancashire. We are in a unique position in that our roads are among the most clogged up in the country. Indeed, the M66 was identified in the latest edition of The Sunday Times as the most congested road in Britain. We rely on our rail system and we need it to be improved. I hope the Minister will give that point some consideration.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I start by congratulating the right hon. Member for Blackburn (Mr Straw) on securing this debate on, as he says, a very auspicious day for the rail network in the United Kingdom. While the focus for many today has been on the big project, which is going to be high-speed rail, it is also very important to continue to improve services on our existing rail network, including local services of the sort that we have been discussing this evening. I know how much importance the right hon. Gentleman places on that, as do the other hon. Members who are present today and want to make their arguments heard.
The Government fully appreciate the economic benefits that improving our transport system can generate. That is why we have placed a priority on improving our rail network, even though our budgets are limited due to the need to deal with the deficit. So as well as going ahead with high-speed rail, we have embarked on the biggest programme of rail improvements to our existing network since the Victorian era, and that ambitious programme includes a number of very important projects in the north-west, which I may have time to cover briefly at the end if time allows.
We recognise that capacity has been an issue for a considerable time on commuter train services into Manchester, including services from Clitheroe and Blackburn. The passenger growth figures that the right hon. Gentleman and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) have referred to are indeed striking, and that pattern is reflected on many other parts of the rail network, which is why we have undertaken the programme of capacity expansion that we have. It was welcome news, therefore, when funding for the HLOS—high-level output specification—programme of additional carriages on the whole network was confirmed by the Chancellor in the comprehensive spending review. That programme included extra carriages for the Clitheroe-Blackburn-Manchester line. Since July 2010, three of the seven peak services on that route have been lengthened, providing a 20% increase in the number of seats, and platforms have been lengthened at four stations.
I recognise, however, as do the Government, the local support for other proposals to improve rail services between east Lancashire and Manchester. We recognise the support for the half-hour all day service from Blackburn to Manchester, which many have expressed support for and which is under discussion tonight. That is why the Department for Transport has engaged at considerable length with Blackburn with Darwen council, Burnley borough council and Lancashire county council on finding a way to deliver the service improvements that those local authorities and the local communities want.
I have been asked this evening to give advice on taking forward an improvement programme. The first stage has already been achieved—obtaining the support of the relevant local authorities. It is only when a commitment is made by the local authorities to prioritise these things locally that they have any chance of getting off the ground. It has become clear over recent years that rail service improvements between east Lancashire and Manchester have become a high priority locally, and the work that the councils have commissioned from Network Rail to carry out studies as part of their GRIP—governance for rail investment—process to identify infrastructure requirements is another important precondition for a credible proposal to enhance infrastructure and services. So again we are seeing this process being taken very seriously and important steps being taken, which are essential if there is to be a successful conclusion along the lines that the right hon. Member for Blackburn would like.
The local authorities, I understand, have also been working with Northern Rail to carry out demand forecasting and to estimate operating costs. That kind of foresight and commitment from local authorities has meant that they have been able to take advantage of some of the funding opportunities that have emerged over the last couple of years in relation to east Lancashire services. The most striking example of that has already been mentioned this evening: subject to due diligence, Burnley borough council has secured the funding from the regional growth fund for the Todmorden curve to enable through trains to run between Accrington, Burnley and Manchester. That will provide a considerable boost for regeneration of the Weavers Triangle area, as well as important benefits for businesses and for commuters to access those important job opportunities in Manchester, about which my hon. Friend the Member for Rossendale and Darwen addressed the House. I congratulate the borough and county councils on their success. That demonstrates that such projects can get off the ground if the right work is done.
The Clitheroe-Blackburn-Manchester line currently has an hourly service. We have heard this evening that there is concern locally that that is not frequent enough. It is supplemented by additional services at peak times between Blackburn and Manchester. I am aware that introducing at least a half-hourly service to Blackburn throughout the day is supported by Blackburn with Darwen council, Lancashire county council and Transport for Greater Manchester, as well as right hon. and hon. Members who have spoken this evening.
As we have also heard, much of the route between Blackburn and Bolton is single track. That means that infrastructure improvements would need to be delivered if a reliable half-hourly service were to be introduced in both directions throughout the day. My hon. Friend mentioned the idea of doubling the line. Network Rail concluded that a longer passing loop at Darwen and an increase in line speed capability at Turton crossing were the appropriate improvements, and work is going on to establish how much they are likely to cost.
Since this is a service generating primarily local benefits, it is for the local authority to identify a funding source for the investment needed to make it possible, but one possible source of funding would be the next major local transport schemes budget. This is the kind of project for which it is well worth putting forward a bid to that funding stream. Consistent with our wider localism agenda, we are currently considering how we might enlarge the participation of local and sub-national bodies in the decisions that are taken on how to allocate that major local transport fund, and we continue to engage with key stakeholders on our proposals. We will give further information shortly about the whole major local scheme that we envisage working in the future. We hope that there will be a bigger say for the local and regional stakeholders in the decisions.
If the proposal to introduce half-hourly services on the line were awarded funding under this budget, I am advised that a scheme could conceivably be implemented by December 2016, which might tie in well with the north-west electrification programme and the Ordsall Chord, which we expect to have been completed by that date. Consistent with the approach taken by the previous Government, if additional off-peak services require an ongoing subsidy, that would need to be funded by the local authorities for at least the first three years of operation. It is not clear whether in the long term these services would require additional subsidy, but many such local services tend to require subsidy, certainly in the early years. If the additional services continued to demonstrate a good business case after a three-year period of local subsidy, the Government would consider funding them if funds are available. The local authorities will need to look at that to identify the funding to subsidise for three years any enhanced service that they seek to take forward.
As a further relevant matter, I should mention that we plan soon to issue a consultation document on the decentralisation of decision making in relation to our railways generally. This could provide an opportunity for local authorities and PTEs to have a greater say in policy and decisions on local rail services, such as the Clitheroe-Blackburn-Manchester service. Decisions on this obviously await the consultation and its outcome, but services such as the ones that we have been discussing might be appropriate for devolution to a local body, playing a bigger role in relation to important aspects of the rail service and how the subsidy of those services is allocated within a particular area. But even without further devolution, a process is in place that could enable local authorities to take a scheme forward to enhance the Clitheroe to Manchester service. It does mean that they may have to make choices about whether the scheme is a higher priority than other transport choices in their area, but I can assure the right hon. Gentleman and my hon. Friend that we will continue to provide help and advice to the local authorities as they work with the rail industry further to develop the scheme and identify the funding needed if it is to go forward.
I want to put this debate in the context of the Government’s wider improvements to rail in the north-west. In 2010, as the right hon. Gentleman mentioned, we confirmed the electrification of the so-called north-west triangle of routes, namely Manchester to Liverpool, Liverpool to Wigan North Western and Manchester to Preston via Bolton. This programme of electrification will result in faster journey times on these routes. The first stage, between Manchester and Earlestown, is due to be completed by December 2013, and the whole scheme should be finished by December 2016.
In March 2011, the Chancellor announced the go-ahead for a major element of the northern hub package—the construction of the Ordsall Chord. This important stretch of new line will enable trains from Manchester airport to Leeds and the north-east to serve Manchester Victoria alongside trains from Liverpool, which will be diverted from their present route to operate via the more direct Chat Moss route. This will substantially reduce journey times between Manchester and Leeds and release capacity at Piccadilly station for additional services from the south and east of the city. All those measures should help to open up job opportunities in the way that my hon. Friend referred to and enable more people to take advantage of the economic vitality of Manchester.
In his autumn statement the Chancellor announced that the route between Manchester, Leeds and York would be electrified. This announcement, coupled with the Ordsall Chord and a programme of other line speed improvements already funded, will cut journey times between Liverpool and Newcastle by up to 45 minutes. We believe that those improvements will deliver significant benefits across the north of England, particularly in the north-west, revitalising the Manchester economy to the benefit of the surrounding areas, including, of course, east Lancashire.
As well as cutting journey times and reducing costs, the improvements that we have announced and our programme of electrification will release diesel trains for use elsewhere on the network, making expansion of services on other lines easier to deliver. We will be considering further improvements to our railways in the north of England and other elements of the northern hub package in the high level output specification, which we will be publishing in the summer, on improvements that can be funded by the Government between 2014 and 2019. In the meantime, Network Rail is undertaking further development work on each element of the package to establish with greater clarity how much they would cost and to gauge the strength of the business case.
Our priority is to reduce the budget deficit, but we fully recognise the need to invest in improving our transport network, because of the regeneration and job opportunities that it can deliver. We are also pressing forward with a programme of reform on our railways so that we can reduce the cost of running them to give better value for money for taxpayers and fare payers, and also make it more realistic and viable to deliver the kind of improvements to services that hon. Members have called for tonight.
Question put and agreed to.
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Regional Pay (Public Sector)
(12 years, 10 months ago)
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Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Diolch, Mr Chope. It is a pleasure to serve under your chairmanship this morning and to have the honour of beginning the first Westminster Hall debate of 2012. I thank right hon. and hon. Friends for making the effort to come here on the first morning of Parliament’s return.
The topic of regional pay will increasingly dominate relations between the UK Government and the public sector over the coming year, perhaps even more than the still unsolved dispute over public sector pensions. Back in November, I labelled the autumn statement a panicked response to worsening economic forecasts, rising unemployment and increasing deficit payments. The statement included many interventionist measures for which my party had been calling, particularly increased capital infrastructure investment. The signature policy of the statement was the capital investment programme, which seems remarkably similar to my party’s proposals at the last Welsh general election. I hope that the £25 billion of funds to be raised from pension funds over the coming years will be shared equitably across the nations and regions of the state.
The fine print of the autumn statement contained a deeply worrying request for pay review bodies to investigate how public sector pay can be made
“more responsive to local…markets”,
with the aim that they should report in July this year. After the flurry of announcements that we heard at the beginning of the autumn statement, it took a while for the significance of that announcement to sink in. What the Chancellor was announcing was a wholesale review of the introduction of regional pay in the public sector to be introduced as early as the 2013-14 pay round. I do not want to accuse the Chancellor of being deliberately antagonistic—
Jonathan Edwards
Well, it is the first day back. However, the fact that that announcement was made on the eve of the biggest industrial strike in the UK since 1926 smacks of deliberate bad timing. If the Government think that the proposals for public sector pensions have got state employees and their representatives worked up, they have not seen anything yet. As the debate rages over such proposals, I fear that we are likely to witness increased industrial strife.
After making the announcement in the autumn statement, the Chancellor explained that the review would be a significant step towards the creation of a more balanced economy in the nations and regions of the state that does not squeeze out the private sector. The claim—the theory, at least—is that depressing public sector wages where they are currently higher than those in the private sector will lead to the brightest and best choosing a private sector career over public service and that such an approach will boost the private sector.
What are the Treasury’s intentions? Is it considering a system that extends the London weighting, or is it considering something altogether more far-reaching? In June 2008, the Minister for the Cabinet Office was quoted in the Financial Times as saying that it is the intention of the new UK Government to lower rates of pay in the civil service outside London. That is on top of redundancies and a two-year pay freeze, with the autumn statement freezing public sector pay at 1% for a further two years. May I remind Ministers that a pay freeze at 1% is essentially a further real-terms pay cut for the next two years? My fear is that the Treasury’s proposals are all about saving costs. I therefore cannot see it topping up payments for public sector workers in more affluent areas of the state or reallocating resources. My concern is that the Government’s intention is to reduce pay in the poorest parts of the state across the public sector and to introduce market conditions into public sector workers’ pay and remuneration.
The Institute for Fiscal Studies reported that the public sector pay bill for 2009 was around £182 billion, which represents around 30% of UK Government expenditure and around 13.1% of UK national income. However, based on the 2010 comprehensive spending review, we know that the public wage bill will be significantly reduced by the projected reduction of 400,000 public sector jobs by 2017. In winding up today, it would be helpful if the Minister informed us what the savings will be of the Office for Budget Responsibility’s new projections of more than 710,000 public sector job losses by 2017.
At the risk of offending my friends in the Labour party, based on the policy direction of the previous Government, the Treasury should have the full support of Her Majesty’s official Opposition. What strikes me about politics in this place is that, despite the sporadic changing of the guard at No. 10 Downing street, more things stay the same. The previous Prime Minister had obviously spent too much time in his former post at the Treasury, as he was an avid exponent of regional pay. Indeed, the previous Labour Government introduced regional pay for court workers and the Prison Service.
In the teeth of the trade union movement’s opposition over the coming months to these proposals, the Treasury will justifiably be able to say that the previous Labour Government introduced the principle of differential pay, using the Courts Service as a pathfinder for its wider introduction across the whole public sector. Indeed, the Chancellor made that point repeatedly to the Treasury Committee during the evidence session on the autumn statement last month. To the Public and Commercial Services Union’s credit, it warned exactly of that during the debate surrounding the proposals for the Courts Service in 2007. It said at the time:
“There was a need for a pay and regrading review as workers from the magistrates’ courts have recently been brought into the civil service. But the Department of Constitutional Affairs has gone for the cheapest possible option. If the government brings regional pay in here, it will try to implement it in the rest of the civil service, and then across the public sector.”
I would be grateful to the Minister if she informed hon. Members about the Government’s assessment of the impact on recruitment and quality of service in south-east England of introducing regional pay in the Courts Service. More importantly from my constituents’ perspective, what has been the impact on recruitment, performance and, crucially, morale in those areas where lower rates of pay are offered?
Helen Goodman
The hon. Gentleman is in general making an excellent case this morning, and I congratulate him on securing the debate. Does he agree that there is a real problem surrounding the quality of public services as a result of the fact that, for example, doctors might come out of university with five, six or seven years of debt and be paid less in regions such as the north-east or Wales than in London?
Jonathan Edwards
The hon. Lady makes an excellent point, and I thank her for that intervention. I will come on to talk about the brain-drain element and the polarisation of wealth across the British state.
I say to the Minister that, with the policy in operation across some parts of the public sector already, the Treasury should have the information about its impact at its disposal. That leads us to ask why the autumn statement pledged to hold an investigation into the issue. There is already a wealth of evidence from trade unions about the problems of the policy in the courts and prison services.
Without having sight of the Minister’s speech, I presume that her counter-argument might include saying that it is the Government’s intention to equalise the standard of living for public sector workers. Such an argument might go along the lines that a teacher working in Carlisle or Carmarthenshire has more disposable income than a colleague working in Reading, because of the difference in the cost of living and that that is morally unjustifiable. Superficially, that seems a seductive and attractive argument, but it is essentially a policy aimed towards a race to the bottom.
I hope that the Government do not embark on a divide-and-rule strategy and play public sector workers off against each other, as they have during the public sector pensions debate. Under the proposals, both public and private sector workers in the regions and locations concerned would be losers. The impact of such a policy would not be a geographical or sectoral rebalancing of the economy; it would be a sobering experience, with public sector workers already in fear of their jobs having their pockets picked for pension payments and suffering a prolonged period of wage freezes and real-term cuts.
Hywel Williams (Arfon) (PC)
Does my hon. Friend agree that the arguments about differential costs of living in some areas are sometimes bogus? He will know as well as I do that, for example, transport costs in rural areas are astronomical. People might have to run two cars, as they struggle to maintain a lifestyle that involves travelling to two jobs in different directions.
Jonathan Edwards
My hon. Friend makes an excellent argument. Indeed, following the autumn statement, he tabled an early-day motion on the topic, which I think has been supported by about 18 Members to date. I urge those Members who support the campaign on this issue to sign that early-day motion at the very least.
Public sector workers are facing real-term cuts and that is before we consider the impact on the private sector. In many places, the private sector is reliant on the trade generated by the public sector and the money circulated through public sector employees. In constituencies such as mine, where more than 30% of people work in the public sector, there is a direct correlation between their wages and the cash circulating in the local economy.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on securing the debate. Surely, his point about the direct correlation between socio-economic difficulties in geographical areas—particularly those that are some distance from the south-east such as Wales, Northern Ireland, Scotland and the north of England—and the high dependency on public sector employment is key. Many of those areas have only managed to get through the recession at the moment because of their high dependency on the public sector. If we were to go down this route now, we would find that the problem would be multiplied even more.
Jonathan Edwards
The hon. Gentleman makes an excellent point. We should be considering not depressing the public sector in those areas where the economy is weakest, but improving the private sector.
Since the general election, we have heard a lot about the UK Government’s ambition to geographically rebalance the economy. They have the full support of my party, including the national insurance holiday proposals for small businesses, which I think shows the Treasury’s intent, despite the evidence showing a lack of success. The policy indicates that the Treasury, at long last, realises that countervailing measures are required to address the so-called north-south economic divide. We will, however, need a far more comprehensive approach than we have seen to date. My fear is that this policy on regional pay goes in a completely different economic direction.
One of our major criticisms of UK Governments of whatever colour in the past 30 years has been that the emphasis has been far too concentrated on one small geographical part of the state. Successive Governments have been guilty of allowing regional and individual wealth polarisation at an incredible rate. The average gross value added per person in inner London is 10 times that of workers in the Gwent valley. Inner London is the richest part of the European Union, whereas the communities that I represent—only a few hours down the M4; longer on the train—qualify for the highest form of European convergence aid. Such are the imbalances in the British state that it is now by far the most unequal of all EU member states. Considering the unification legacy in Germany, that is a damning indictment of all successive Governments.
Far from addressing that record of shame, these proposals will further depress those economies that are in desperate need of investment. It is no surprise to anyone that the fiscal consolidation pursued by the UK Government will hit the poorest parts of the state most. The statement by the Prime Minister that we are all in this together is rivalled in its degree of preposterousness only by the previous Prime Minister’s assertion, when Chancellor, that he would abolish boom and bust. My country has the lowest average gross weekly wages in the whole UK. On average, workers in Wales earn approximately £519.40, compared with £629.10 in the south-east of England and £826.40 in London. Take away the consistency of public sector pay—a point made by many hon. Members in interventions to date—and those discrepancies will be far worse.
Grahame M. Morris (Easington) (Lab)
I thank the hon. Gentleman for giving way and for securing the debate. Aside from the unfairness, will he tell hon. Members whether the ability of the fire service, for example, to be resilient in the event of major incidents such as terrorist threats—or flooding, which happens in my region—is likely to be undermined by such a national pay structure? Remember, firefighters will often cross borders to help brigades in other areas.
Jonathan Edwards
The hon. Gentleman makes a valid point about morale and about where public sector workers choose their profession as a vocation. They do so as a lifetime commitment and are more likely to move to areas where they will get better pay. This is a pressing issue about the effect that this proposal will have on the quality of our public services in those areas where we need to be pumping up the public sector because there are problems with the economy.
It would be indefensible, considering that public expenditure per head is far higher in London than other parts of the state, for the Treasury to introduce a policy that further exacerbates the wealth divide. The spending power of people in the poorest parts of the state is obviously far lower, and that has an impact on private sector growth in those areas. In the communities that I represent, more than 30% of the population work in the public sector. Their disposable income correlates directly to cash circulating in the local economy. The move towards regional pay, therefore, is deeply worrying, as it will institutionalise lower pay in poorer areas. It will entrench those deeply socially divisive economic variances that exist within the British state and fundamentally undermine a supposed key objective of the current UK Government.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I congratulate the hon. Gentleman on securing the debate, because this is a very important issue. What would have been the consequence if regional pay had already been instituted and police officers from my area in Cleveland were sent down to London, Birmingham or Manchester during last year’s summer riots? What would have been the consequences for the pensions of those police officers if their annual pay was reduced in certain regions of the country?
Jonathan Edwards
The hon. Gentleman makes a very informative intervention, which shows some of the problems. He is right to point to the recent riots in London, because police forces from his area and mine were sent down to London to deal with those problems. What would the morale in the police force be if there was differential pay in different parts of the British state? In fact, I cannot think of many other policy interventions that would undermine completely attempts to rebalance the economy geographically.
Returning to some of the arguments used to promote the idea, the notion that depressing public sector pay would lead to the brightest and the best leaving the public sector to generate wealth seems a slightly strange one. Public sector workers often make a lifetime commitment to joining a profession and to public service. Rather than seeking work in the local private sector, they are far more likely to seek similar employment in other areas where they will receive better pay. That will result in speeding up the brain drain that has caused so much damage to the communities that I represent.
There are a number of technical problems with the introduction of regional public sector pay. One obvious problem is how to calculate pay. Is the idea to link it with private sector pay? If so, the huge disparities in pay in the private sector between different parts of the UK would be replicated in the public sector. Generally, private sector wages in Wales are only half those in London. Are we seriously saying that a public sector worker in Southwark who does exactly the same job as an individual in Carmarthenshire should be paid twice the rate?
How many different regions will there be? How will boundaries be set, and how often will pay and boundaries be reviewed? In an unusual sign of activity, the First Minister of Wales announced within hours of the autumn statement that if the UK Treasury introduced the policy, the Welsh Government would seek to assume responsibility for public sector pay. I remember being interviewed by the BBC on the steps of St Stephen’s entrance on my response to the autumn statement. I was asked to respond to the First Minister’s comments, which I had not heard previously, that regional pay was
“a code for cutting pay in Wales”.
He continued:
“Ultimately we may have to look at taking over pay and conditions here in Wales. It’s not as easy as it sounds. There are real issues in terms of how that’s done. But if we’re forced into that situation, better that than have people’s pay cut by the UK Government in London.”
That sort of fighting talk, with an alternative course of action, is extremely unlike the current Welsh Government. We normally get a pile of hot air based on Labour-Tory tribalism, but with even the Welsh Government awakening from its slumber, perhaps Ministers here in London should be very wary of the strength of opposition that these proposals will generate.
Susan Elan Jones (Clwyd South) (Lab)
As usual, my Plaid friends always make the case better when they do not mention the word “independence”. Going back to the better part of the hon. Gentleman’s argument, we have a Secretary of State for Wales who happens to represent a Buckinghamshire constituency. Surely, if these proposals were considered logically, the rate of pay for that Secretary of State—if she is still Secretary of State at the end of the week—would be rather different if she represented a Welsh seat. That would be absolute nonsense, and it illustrates how nonsensical this policy is.
Jonathan Edwards
That is a fantastic intervention, if I am honest. Obviously, if we were to think this policy through rationally, it would mean that Members of Parliament should receive differential pay, and I can imagine how that might go down with hon. Members if we had to vote on it.
Hywel Williams
To return to the practical problems that we have in Wales, we share a long land border with England that is rather different from Scotland. There is much less traffic. I am very glad to see that link with England and both sides should profit from it, but it means that public sector pay in the Courts Service in Mold, for example, is different from that in Chester, which is just a few miles down the road, and that is ludicrous.
Jonathan Edwards
That is one of the practical problems that will come from this policy.
As a Welsh nationalist, I of course welcome the statements of the Government of my country that they will look into devolving public sector pay and conditions. Let us hope that if the UK Government continue with this policy, they match their words with actions. My only word of warning is: how will the Welsh Government fund this policy, given that they are reliant on block grant funding, which has been depressed by the Treasury, and that they are paralysed by an inability to raise their own revenue? If we go down this road, we will have to reform the funding formula, which the Labour party was previously cautious about doing.
Every hon. Member will acknowledge that the cost of living—particularly housing—for public sector workers in some parts of the UK is a problem. The chasm between private sector and public sector wages in London, for example, needs to be addressed. That is why my party previously made the case for a maximum wage to tackle the ridiculous earnings and bonuses paid to people in the square mile that do so much to inflate prices for ordinary working people in both public and private sectors. We must consider introducing innovative ideas, such as rent caps, as in New York, to reduce the housing benefit bill and ensure that public sector workers are not priced out of housing.
Rather than take such bold measures, the UK Government prefer to hammer hard-working people in the poorest parts of the state in an attempt to remedy the problems caused by the obsession of successive Westminster Governments with the economic elite here in London. That policy response, based on dealing with the consequences of macro-economic policy, has led to such imbalances across the state, rather than tackling the causes of those imbalances. The argument is that, through regional pay, the differences between public and private sector pay will disappear, but that claim comes about through looking at problems through the wrong end of the microscope. That is the same perspective from which people argued that cutting public sector jobs would lead automatically to their replacement with private sector jobs—and that has since been proven quite wrong, especially in areas such as the one that I represent.
In Wales, as in other parts of the UK, the private sector is undoubtedly too small, and that is sometimes misrepresented by people saying that there is too large a public sector, but that is not the case. The private sector in Wales needs to be given encouragement to grow through tax breaks, Government support for specific industries and infrastructure improvements. My party has been championing such intervention in response to the economic turmoil of the financial crisis in the past four years. I need not remind hon. Members that the Welsh economy under Plaid Cymru was growing faster than in any other part of the UK when we left office.
Sharp cuts in the pay available to public sector workers would have a hugely negative impact upon their ability to spend in the private sector and would probably lead to a vicious downward spiral, with job losses in the private sector and then a further downward impact upon public sector pay to again realign. This is what Blanchflower calls a “death spiral”. The effect of regional pay may be to institutionalise lower pay and create employment ghettos. I am concerned that, despite such significant problems, the twin siren calls of saving money and dismantling the public sector may be too much for the Chancellor to ignore. I hope that I am wrong. Diolch yn fawr.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mr Chope, for calling me to speak on this complex, interesting issue. This is the first time that I have spoken under your chairmanship, and it is a great pleasure to do so. I congratulate my good friend, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). We have discussed this matter once, briefly, on Welsh radio, and I said then that I wanted to speak in this debate. The gist of what I said then, and shall say now, is that we are facing a complex issue. It is difficult to understand how the hon. Gentleman could be so definitive about a response.
There are serious issues here. On 29 November, the Chancellor announced a review of the case for regional pay. We are talking about an announcement that there will be an inquiry reviewing the case; that is not sufficiently definitive to be described as proposals. A number of hon. Members who intervened mentioned proposals, but we are considering something that could have a damaging effect and could distort local markets.
The issue is not new. I first became involved in it 30 years ago, and it was a chastening experience. I am talking about the general, in-principle case for looking at regional pay. I had just become chairman of Montgomeryshire district council, and had very little experience of public work; I had probably been put in that position a little earlier than I should have been. I was a local farmer—a small businessman—and it seemed to me that the local authority was distorting the local market. It was paying a significantly higher rate than the local market. People were being transferred, and local businesses were complaining about losing their best staff.
I went to a conference in Kensington town hall; I was very green and new. My chief executive, who came with me, put me down to speak. When I was on the platform, I made what I thought was an entirely rational point, but I was booed off the platform. I was an independent chairman; I was speaking with a local businessman’s logic about how we could run the business—the local authority—more efficiently and not distort local markets, but I was booed off. That was more than 30 years ago, so there is nothing new about this debate.
I have read some quotes made by the previous Prime Minister when he was Chancellor of the Exchequer, and they were incredibly positive about regional pay. I am sure that when we have this debate in July after the inquiry reports, which will be the obvious time to discuss what might then be considered proposals, his quotes will be mentioned; there are legions of them, strongly supporting regional pay and saying how vital it is for the future of our economy.
Helen Goodman
Labour Members are concerned that there is not an open inquiry, but a collecting of arguments for doing something that the Chancellor already wants to do. Will the hon. Gentleman say who is on the commission, who is undertaking the review, and whether the trade unions are involved with it?
Hywel Williams
The hon. Gentleman says that the debate is on a long-standing, old question from 30 years ago. I thought that the Conservative position on it in Wales was made clear in a debate on 30 September 2008, when Mr William Graham—some hon. Members might not know that he is a senior Conservative Assembly Member—said:
“First Minister, you will know that the Welsh Conservatives firmly oppose the introduction of regional pay for civil servants.”
What has changed?
Glyn Davies
I am sure that Mr William Graham will be extremely honoured to be quoted in a debate in this House. I will tell him about that when I speak to him later today, as I have arranged to do—[Interruption.]—not on this issue, but on another one that will be of particular interest to Welsh Members across the board.
This issue has the potential to distort local markets. That was my view 30 years ago, and I still see that potential now. I should have thought that I would have found a measure of agreement with the hon. Member for Carmarthen East and Dinefwr in our discussions on Sunday morning, because there are significant questions about the difficulty of transferring from one area to another, for example, and whether inflexibilities will be introduced into the market. There are a host of other issues to consider, too.
We need an inquiry. I understand that one or two Opposition Members feel that the inquiry may not look across the board. I would be disappointed if that were so. We need an inquiry that will bring forward the information that all of us, including the Chancellor, need to make a balanced judgment. The appropriate time for that to happen that will be in six months.
Owen Smith (Pontypridd) (Lab)
Will the hon. Gentleman undertake to speak to his boss, the Secretary of State for Wales, and perhaps even the Chancellor, because, as he just learned from my hon. Friend the Member for Bishop Auckland (Helen Goodman), there is not a review? A series of letters have been sent to the national pay review bodies, asking them to consider the matter. Will he take up the challenge and tell the Chancellor that there ought to be a public review, and that trade unions and other bodies absolutely ought to be involved?
Glyn Davies
I thank the hon. Gentleman for that intervention, and as the Parliamentary Private Secretary to the Secretary of State for Wales, I reassure him that all the issues that I am involved with in the House feature in our discussions. When I am asked tomorrow what I have been doing since Christmas, I will certainly point to the debate that I am involved in today. I hope that that satisfies him on his request.
The only point that I want to make in my contribution is that the debate is too early. We need to have it in July, and we will. It will be an issue for the Floor of the House—an important and possibly contentious issue; I do not know. We will have to wait and see what the report says. It is possible that the issue will be contentious, but we must wait to see any proposals. In principle, I do not have any objection to the idea of a flexible labour market. Clearly, however, it must work and must not have a negative impact, and that can be decided only when we see the results of the inquiry, and information on which we can base a proper judgment.
Hywel Williams (Arfon) (PC)
I am grateful for the opportunity to speak in this debate, which is important for my constituency and that of my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), in that we have large numbers of public sector workers. I am glad that my hon. Friend was successful in securing the debate, and I draw hon. Members’ attention to my early-day motion.
Regional pay would institutionalise lower pay in countries and regions of the UK such as Wales compared with London and south-east England, and it would magnify the unfairness of the current economic situation. Whether it is called zonal pay, local pay or regional pay, in the present constitutional position and economic climate, it would go completely against the supposed policy of the UK Government to rebalance the UK economy, which is sorely needed. Regional pay would badly impact on Wales and other countries and regions with a weaker private sector, which is certainly the case in my constituency, as well as in other parts of Wales, the north-east and north-west of England, Scotland and Northern Ireland.
When the Government refer to rebalancing, they are referring to something different from what my party means by rebalancing. When the UK Government refer to rebalancing, they are referring to growth in the south-east, as we have seen from the implementation of various policies such as the huge high-speed rail proposal, which will be outlined today, the Olympics or a number of others, which I will not go into this morning.
Our version of rebalancing is to increase support to sectors of industry and locations that have not benefited in the past from Government benevolence and support, which means support for countries and regions that have lost out over previous decades. As my hon. Friend has said, the economic situation has led to the growth of the financial sector in the City of London to the cost of other industries; in Wales, we look in particular at the decline of manufacturing. We have a much more fragile and non-diversified economy because of the centralisation of the UK economy on London, which has produced the overheating of housing costs and pressures in and around London. Anyone who lives in the south-east knows what I mean, and we have seen an increase in inequality between London and the south-east of England compared with the rest of the UK. If the proposals go through—if they are discussed and decided upon—I fear that that inequality will be exacerbated.
The annual survey of hours and earnings published by the Office for National Statistics last month showed that Welsh workers are already among the lowest paid in the UK, while workers in many parts of London and the south-east earn double our average salary. I would be the first to complain about the large pockets of inner-city poverty that I come across when down here in London, and they are scattered throughout the inner cities of England, Wales, Scotland and Northern Ireland, but generally we have seen the north and west of the UK suffering, while the south-east has benefited. That leads me to what might be a soundbite but which has a certain truth: we have regional pay already, but in favour of the south-east. In part, that is because we have too weak a private sector, which needs support and investment to develop, as we in Plaid recommended in our economic renewal plan.
Support for the private sector in Wales may seem a peculiar position for a lefty nationalist to take, and I can see some eyebrows rising around the Chamber already. Unlike the Unionist parties, however, we see no long-term benefits in being continually tied to fiscal transfers from London. That is not the position in which we want to see our country. We want to be as successful as any other part of the UK or of Europe. It is a mark of the failure of the current Unionist settlement that parts of Wales have a gross value added that is low enough to take advantage of European convergence funding. Many parts of Wales have a GVA of less than 75% of the average, so we get large transfers from Brussels. Such transfers are welcome, but we do not want to be in that position at all. That situation is the result of the major economic decisions made in London, where the main economic levers are held. To thrive, the private sector in Wales needs support for it to grow. We need much better infrastructure and the Government to give the support and advantages that will allow companies the opportunity to develop. That has not happened over a long period, and it requires a broad mix of Government policy and a fair economic wind.
Chopping back the public sector in all the guises introduced by the Government—real-terms pay cuts, 710,000 job cuts according to the Office for Budget Responsibility, and the pickpocketing of pension contributions—will not improve the private sector in Wales one jot. Clearly, as anyone who has looked locally at the economy in Wales or elsewhere knows, there is a strong relationship between the public sector in our areas and the private sector. Cut the public sector and the private sector is hit hard.
The effect of any regional pay policy would be to depress wages in the public sector throughout Wales, which will have a strong knock-on effect on the private sector, because families will have less disposable income. Families with less income will purchase fewer goods and services locally, therefore providing less circulation of income for the local private sector.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I thank the hon. Gentleman for giving way and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) for securing the debate. As well as depressing salaries in the public sector and therefore in the private sector, and given that many of the people affected are already not well paid, will not regional pay cost the state more in working tax credit, housing benefit and the other benefits with which we subsidise low-paid workers?
Hywel Williams
The hon. Lady makes a fine point. As so often with the policies of this Government and at times, I fear, of her own Government previously, there is no apparent understanding that the system is such that if we cut off a large branch, the tree itself will be affected. I agree with her entirely.
Helen Goodman
The hon. Gentleman is absolutely right. In the north-east, the proposal has the potential to take between £500 million and £1 billion out of our regional economy every year, and yet the switch in capital to our regional economy under the Chancellor’s autumn statement was 0.1% or £4.1 million, which is completely unbalanced.
Hywel Williams
Indeed. The hon. Lady’s point is pertinent to the debate.
When cuts were made to wider public sector budgets, the effects were largely on the public sector, of course, but also on the para-private sector—companies that have contracts with the public sector—which is integral to local economies. Similarly, those whose livelihoods depend on services to those in employment will be at risk from the proposals. As well as the local economy, a whole host of small companies that service the public sector in our regions will be affected.
I have great sympathy with Labour Members—I am pleased to see some of them here today—but I appreciate that they will be fighting the proposals with one hand tied behind their backs. It does not please me to make the point about the introduction of regional pay by the previous Government, but the Labour Government promoted the idea. They floated it in 2003, and they introduced it in the Courts Service in England and Wales in 2008, when it was not entirely successful. The Public and Commercial Services Union has told me that regional and local pay in the Ministry of Justice has not been a success, and that with the introduction of local pay in the Courts Service in 2007, there were problems with regional pay zones in the Ministry of Justice. The policy created inequalities and tensions, and it was ultimately unsuccessful and had to be reformed. I hope that lessons have been learned, but I worry that the wrong ones might have been learned.
I conclude by saying that the effect of regional pay will be far-reaching and negative and that it will not improve the private sector. There is a strong likelihood that it will lead to institutionalisation of low pay in some places, and it will certainly make it much more difficult to attract new workers, as my hon. Friend the Member for Carmarthen East and Dinefwr has said. The Treasury must reconsider its stance, and I will certainly contribute to the debate as it develops, as will my hon. Friend and my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd).
I apologise if my final point sounds light. I am pleased to see that Conservatives in Wales are represented here. The comments of the hon. Member for Montgomeryshire (Glyn Davies) were interesting. I appreciate that Scottish Tories may have problems in mustering manpower. It has been said that there are more pandas in Scotland than Tory MPs, and if the London Conservative and Liberal Democrat Government push the regional pay issue through, Tory MSPs in Edinburgh will be rarer than polar bears on the Clyde.
Mr Christopher Chope (in the Chair)
Order. Some hon. Members have indicated to me informally that they wish to participate in the debate. However, I will not call anyone if they do not rise and seek to catch my eye. This is the new year, a time to exercise the muscles and become fitter, so perhaps hon. Members who wish to speak will rise in their place.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to speak under your chairmanship, Mr Chope. I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this debate, and on the many excellent points he made in his introduction. Other excellent points were made by my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Easington (Grahame M. Morris), and for Middlesbrough South and East Cleveland (Tom Blenkinsop), and by the hon. Member for Arfon (Hywel Williams). I do not intend to speak for long, or to repeat the many points made about the implications for regional pay and the regional economy. I intend to focus on what the plans say about the economic policies of this Tory-led Government.
The Tory-led Government talk a good talk about the key challenges facing our economy: the rebalancing away from the service sector towards manufacturing, and away from the south and London towards the regions, including the north-east, where my constituency is. Those challenges are important because of the huge consequences of the financial crisis, which was brought about by an over-focus and over-concentration of the economy on financial services. It will be remembered that when we went into the financial crisis, we had the second lowest deficit in the OECD, but we suffered more greatly because of over-dependence on financial services.
What do the proposals mean for the economy, and particularly for rebalancing it towards manufacturing and the regions? My hon. Friends have made some excellent points about driving higher-paid workers in the public sector away from the regions, and about the impact on the ability of the regions to attract higher-paid private sector workers. I want to focus on what the proposals will mean for those on lower pay.
The evidence shows that the disparity between public and private sector wages, such as it is, is focused on the lower section. The Policy Exchange, in its analysis, admits that the pay advantage, as it calls it, is not evenly distributed and is higher in lower grades, particularly among the bottom 10% of public sector workers. From my experience of working in the public sector as a chartered engineer, I know very well that at the higher end, professional engineers, for example, are much better paid in the private sector than in the public sector. Seeking to equalise pay rates in the private and public sectors in the regions will inevitably reduce the wages of the poorest-paid. What does that say about the Government’s policies and intentions?
We may disagree about the exact causes of the financial crisis, and where the blame for it should lie, but I think we all agree that the poorest people in the country did not cause it, so why are Government policies again targeting the poorest people? The poorest people will pay because, as the hon. Member for Arfon said, depressing wages at the lower end of the public sector will inevitably have an impact on the private sector. Indeed, in their proposals, the Government intend to reduce salaries in the public sector, which must have a knock-on effect on the private sector.
We should remember that salaries at the lower end of the public sector, as in the private sector, are not those on which a family—or often even an individual—can live. The minimum wage is not a living wage, and for that reason, Newcastle city council is working towards a living wage in the most difficult economic circumstances. Low-wage and minimum-wage employers often have to be subsidised by the state, in that working tax credit and housing benefit are needed to enable their employees to live decently, so depressing private sector salaries will cost the state more in benefits.
Let us consider how the private sector will react. We know that the ideological basis of much of the Government’s approach to the economy is that destroying the public sector will provide space for the private sector to leap in, create jobs and new opportunities, and drive the economic recovery forward. I believe that the economic recovery must come from a growth in private sector jobs, but it is clear, after more than a year and a half of this Government, that the private sector cannot create the necessary jobs and growth without the support and partnership of an active public sector, which, by its very nature, includes experienced, well-paid and secure employees who are able to support private sector activities.
I speak regularly to local businesses in my constituency, and they all want to play a part in driving forward growth and creating a resurgence of jobs in the region. People tell me not that wages are too high, but that they need: more public sector support in areas such as skills; investment in shared resources, infrastructure, and transport; and measures to increase confidence and buying power among the public. Reducing the salaries of public sector workers in Newcastle will reduce people’s confidence and lessen the prospect of private sector employers increasing employment and stoking growth.
How can the Minister justify targeting the poorest people in our society to pay back a deficit that is due to a crisis caused by a rampant financial sector? We have had 18 months of an ideological experiment, on a national basis, that clearly has not worked. Depressing local wages will not only drive out more skilled constituents, but will hit the private sector in regions that are already vulnerable and most greatly affected by public sector cuts. This ideological experiment has run its course, and the Government’s proposal yet again takes it too far.
Phil Wilson (Sedgefield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope, and I congratulate the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing the debate. The issue of regional pay is important for people living in Wales, Scotland and Northern Ireland, and in regions such as the north-east of England.
I spoke about regional pay, or the localisation of pay, in a debate on 6 December 2011, and the issue has been on the agenda for Governments since at least the 1980s, when I was a civil servant in Durham. The Megaw report wanted to devolve public sector pay in the civil service on a regional basis, but that proposal did not get anywhere. Introducing local rates of pay is difficult. The previous Government looked at the issue with regard to the public sector, and a Treasury guidance note from 2003 stated:
“At the extreme, local pay in theory could mean devolved pay…to local bodies. In practice, extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”
That is the basic, fundamental reason why devolution of levels of pay in the public sector has not been introduced.
This is a time of austerity. Public sector pay has been restricted and will not be increased for two years, and then it will increase by just 1% for two years. Let us look at markets in the north-east of England; if we had devolved local pay bargaining, people might say that pay should be frozen in that region for another year because of the difference between the public and private sectors. Do the Government believe that public sector workers in some parts of the country should have a pay rise, while those in other places should not receive one, because, according to Government analysis, the pay difference between the public and private sectors is too big?
We should not look at only one region. The difference in pay in the north-east and in the south-east of England is 10%, and we should try to decrease that. Why is it right for a nurse working at St Thomas’ hospital, across the way from here, to be on a different pay rate from a nurse who works at the university hospital of North Tees in my constituency, or in Bishop Auckland or Hartlepool? I cannot see how that can be right if both nurses are doing the same job. Many private sector companies, especially supermarkets and some banks such as Santander, have national pay agreements. There may be some flexibility within those agreements, but they have national pay systems. To say that some public sector workers should suffer austerity measures for longer than others because of where they live is divisive. How can we encourage a public sector worker to move from south-east England to the north-east to do exactly the same job if the rates of pay in the north-east are completely different from those in London?
Tom Blenkinsop
My hon. Friend makes an excellent case. There are institutionalised national bodies that survey and assess prices in supermarkets. How on earth would regionalised public sector pay work in an economy with five or six big supermarkets that are supposed to have national rates for pricing their goods?
Phil Wilson
My hon. Friend raises an important point. One reason why the previous Government did not introduce such measures is because the complexity of having different pay bodies, boards and regions would create unnecessary bureaucracy, which any Government should want to keep to a minimum.
In north-east England, average pay is £19,000 per year, but it is only that high because of public sector workers in the area. How low does the Minister want pay in north-east England to be? Public sector workers maintain the average salary at £19,000; without them it would be much lower. The differential in rates of pay is not a reason for cutting pay or suspending pay rises in the public sector. Instead, we should see how we can increase pay in the private sector.
Tom Blenkinsop
Again, my hon. Friend makes an excellent point, and it would be good to see the Minister thank and congratulate north-east England: although in the rest of the country the manufacturing economy is in the doldrums, the north-east is bucking that trend. Workers in the steel and chemical processing industries would undoubtedly be affected by any reduction in public sector pay.
Phil Wilson
My hon. Friend is absolutely right, and those workers will soon be joined by workers in the train building sector, in the factory in Newton Aycliffe. As I understand, the north-east exports more manufacturing goods than it imports.
The private sector has a major role to play, and we need an increase in private sector jobs. At the moment, however, 67,000 public sector jobs have been lost in north-east England, and unemployment has risen to 11.6%. Where are the private sector jobs? How can we say that the public sector is crowding out private sector jobs when unemployment is rising and there is no growth to make up for the loss of 67,000 public sector jobs? Figures from the third quarter of last year show that the number of private sector jobs in the UK increased by only 5,000. Many regions such as the north-east are losing out.
I am very worried about what will happen. There is a big pay differential between the south-east and the rest of the country. The differential between regions other than the south-east is minor; it is only 1% or 2%, depending on what goods we compare. We talk about social mobility, and about people getting on and wanting to move to different parts of the country; how will that be possible if pay rates are so different across the country?
Also, we will not create regions as we know them; we will create silos. If people work in the public sector in the north-east, that is where they will have to work, because if they want to move to south-east England or somewhere else, they probably will not be able to afford to buy a house there. There is great difficulty with that at the moment. Let us not forget that in London, where there is London weighting, there is a big problem with recruitment in the public sector as well.
The proposal is a knee-jerk reaction that has not been thought through. I know that the Chancellor of the Exchequer has said that this will not be regional pay as perhaps it was outlined in the past, and that it will be based on zones or localities. That may be so, and it may have been tried out in the Courts Service; let us say that it has been tried there. The fundamental point is that the previous Government did not want to implement it anywhere else, because they knew about the inherent contradictions involved in doing that.
North-east England is a great place to live. I have lived there all my life. I see it as a region of the country with a great identity. I do not want it to become a silo, such that if people work there in the public sector, they cannot work anywhere else. I do not want public sector workers in north-east England to have to face extended periods of austerity because they happen to be working in the wrong part of the country.
We need to look at the private sector. I want private sector jobs to come to the north-east of England, and I want those private sector jobs to have good pay rates. This week and over the weekend, every party has been going on about high pay among senior executives. Okay, let us consider that, but let us also consider low pay in the private sector and not just in the public sector, because private sector workers make up the majority of workers in the country. The answer to the problem is not regional pay or localised pay—it is a living wage for all our people.
Owen Smith (Pontypridd) (Lab)
It is a pleasure to speak under your chairmanship for the first time, Mr Chope; happy new year.
I, too, offer my congratulations to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on securing this important debate, which, as he has rightly pointed out, will be one of the defining debates in respect of economic policy over the coming period. He made a series of telling and well argued points. It was slightly ironic to hear a nationalist Member of the House arguing in effect in favour of collective bargaining on a national, British basis right across the UK. Nevertheless, it was a very interesting point.
Jonathan Edwards
I make no apologies for what I said, because at the moment sovereignty over these issues resides in this place, and as someone who has been sent here to represent the ordinary working people of Carmarthenshire, I will continue to do so as long as that is the case.
Owen Smith
I am grateful to the hon. Gentleman for that intervention and pleased that he makes no apologies for what he said. I entirely agree with the arguments that he made in respect of solidarity and collaboration right across the UK for people who have similar interests across Britain, whichever area of the country they live in. I wholeheartedly share his views about that, which is why I am a Unionist, not a nationalist, on today of all days.
I congratulate the hon. Member for Arfon (Hywel Williams), my hon. Friends the Members for Newcastle upon Tyne Central (Chi Onwurah) and for Sedgefield (Phil Wilson), who made a powerful speech, and of course the hon. Member for Montgomeryshire (Glyn Davies), who I am delighted is taking up the challenge of telling the Secretary of State for Wales and the Chancellor of the Exchequer that we need a proper review to address this very complex issue—as he described it—as opposed to a couple of private letters to the heads of the national pay review bodies.
Public sector workers must wake up every morning wondering what this Government will do to them next. We have seen the continuing pay freeze; we have seen additional cuts in wages when inflation is taken into account for the next two years; we have seen the 3% additional effective cut in wages as a result of the changes in public sector pensions; and 710,000 public sector workers, up from the 400,000 previously admitted to, are waiting to see whether they will be in a job at the end of this spending period.
Against that backdrop, there was the bombshell in the Chancellor’s autumn statement that regional pay will be re-examined. The Chancellor said that the evidence suggests that regional pay should be considered, because there are disparities between pay bands in the public sector across the UK. As we know, the Chancellor is very keen on evidence-based policy, so I thought that I would assess the evidence in respect of regional pay to date, because we have some experience of it.
London weighting is well established. It is a means of trying to deal with the problems, particularly in respect of housing, for people working in London on lower public sector wages. The previous Government sought to expand that by looking at key worker status and further help for key workers in London. As several hon. Members have said today, and as the Chancellor said repeatedly when he appeared before the Treasury Select Committee, we also have the experience of the Courts Service. However, the Chancellor has been slightly less than fair with the facts in respect of the Courts Service. The fact is that the Courts Service changes that were introduced in 2008—the previous Labour Government introduced zonal pay and five zones across the UK—were a significant improvement on the disparities that existed hitherto. The Courts Service came together in 2005. There was a merger involving the magistrates courts, the county courts, the Crown court and the Supreme Court. Before that point, more than 50 rates of pay were being applied across the Courts Service, so we went from 50 to five. The reality is that despite protestations by some of the unions at the time, most members happily opted into that service; indeed, more than 95% did so.
Opposition Members, who believe in evidence-based policy, would like the Government properly to review the experience of workers in the Courts Service. They should consider retention, rates of pay and the way in which the system has facilitated movement or otherwise across the country, and bring that to the table as part of the evidence for the current proposal.
Glyn Davies
It has become fashionable for Opposition Members to disown the policies of the previous Government and, in fact, to disown their own policies at the start of this Government. I have listened to the hon. Member for Pontypridd (Owen Smith), who has discussed the five regional zones and evidence-based policy. He has described the current proposal as a bombshell, which indicates to me that he has no interest in the results of the inquiry. All we are hearing is knee-jerk opposition to make a point before we have even heard the facts.
Owen Smith
For the third time, I have to tell the hon. Member for Montgomeryshire that there is no inquiry. A couple of letters have gone from the Chancellor to the heads of the pay review bodies asking them to come forward with evidence on how local pay might reflect local market conditions, which is not an open inquiry. I thought that the hon. Gentleman had taken up the challenge to appeal for an inquiry.
The world has changed since the policies were implemented in 2008 on the Courts Service, which took place in an economy that was growing right across the UK. The world has changed. When the facts change, we reconsider our views, and we are doing that right now. We are thinking about the meaning of the Government’s proposals on regional pay and what the evidence shows us. We will come to a considered view when we know what the Government are proposing, but let us look at the evidence.
Of course, it was a previous Tory Chancellor, in the 1990s, who first talked about introducing regional pay on a much wider scale. What happened in the NHS? Local bits of the NHS were given the right to conduct local bargaining, but they lacked the necessary experience and were unable properly to assess local market conditions. As a consequence, there was more than a year’s delay before regional pay bands were set. When regional pay bands were set, the differential across the country was 0.1%. The rationale for that was, of course, that managers understood that, given the problems and complexity that widespread differentials would throw up, a collective agreement right across the country was the best possible option. The Chancellor agreed, and a year later he took back the power, concerned that there might have been spiralling costs had the situation continued.
Owen Smith
I will give way in a moment.
NHS trusts have the capacity to engage in a greater degree of differentiation, but by and large they do not do so, because they accept that it would be unfair and lead to unintended consequences. We saw some such unintended consequences when the police looked into regional pay. In the London Metropolitan area, there was an agreement a few years ago to offer a much higher rate of pay to Metropolitan police officers. The unintended consequence was that officers transferred in droves from the areas around central London, and outer metropolitan boroughs consequently had to set higher rates themselves. Such a policy leads to unintended consequences and involves significant risks, so the Government need to think carefully before they pursue it.
Hywel Williams
I do not want to dwell on the policies of the previous Government, because I think that those of the current one are infinitely more damaging, but before we leave 2008, will the hon. Gentleman confirm that the previous Government were not considering regional pay in any other part of the public sector apart from HM Courts Service? Was it just the Courts Service?
Owen Smith
The hon. Gentleman knows that I was not in the House in 2008, but as far as I am aware, we introduced the policy in the Courts Service and there was further consideration. The former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), certainly talked about regional pay, but we did not introduce it in other areas. At the end of our period in government, there had been some experimentation in respect of the Courts Service, but we did not introduce the policy elsewhere.
Let us look at what happened at the Courts Service and consider where we go from here, because there are significant risks. At the time, the Government, and certainly the Treasury, understood that there were risks. My hon. Friend the Member for Sedgefield has mentioned the Treasury paper in 2004-05, which stated that
“extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”
That takes us to the motive: why have the Government now decided to bring this forward? If it was not a good idea a few years ago, why is it a good idea now? The reason is, of course, found in the two issues that they have with the public and private sectors. First, they believe in a totally outmoded, almost Manichean split—the public sector is bad, bloated and inefficient and the private sector is good, lean, hungry and eager to work. That is their understanding.
Secondly, the Government have a thoroughly outmoded notion that cutting the public sector and effectively forcing people to transfer to the private sector—through actively cutting jobs, as we heard was the strategy in the Budget, or through reducing regional pay, as we now hear might be the strategy—will somehow inflate the private sector. There is absolutely no evidence to support that. It is a totally misguided prescription, and one I fear that the Government will repeat.
The Treasury has said that the reason for looking at getting rid of national pay bargaining is to produce
“an economic reform to boost regions of the economy that are over-dependent on the public sector. All the evidence is that flexible public sector pay to reflect local labour market conditions will allow the private sector to flourish.”
Show us the money and show us the evidence, because we cannot see it at the moment. We can see a pamphlet with a lot of inflammatory language about the Manichean split between the fat public sector and the lean and hungry private sector from a think-tank which is pretty close to the Prime Minister and which some would say is a free-market, right-wing organisation, but apart from that I do not see a lot of evidence to support the position.
I suspect that the Minister will come out with some inflammatory comparisons, but I hope that she will not. We have heard so often about paramedics earning 16% more in the public sector than in the private sector, and I hope that we will not hear such unnecessary and unfair comparisons now. As the Institute for Fiscal Studies itself has said, such comparisons do not take into account the fact that there are invariably older and more experienced workers with better qualifications in the public sector. When such factors are taken into account, the differential between the public sector and their private sector counterparts is perhaps only 2%.
Jonathan Edwards
The hon. Gentleman makes a very important point. This morning, the Bevan Foundation responded to the debate by stating that the IFS figures do not compare like with like and that it is deeply misleading to use the figures in that way.
Owen Smith
I entirely agree. The evidence is shaky and a leap of faith is required—just as we were meant to believe that cutting the public sector would lead to a flourishing private sector. As we have heard, there is no reasonable basis for making that leap of faith. On job creation in the public versus private sector, we learned that in the last quarter, for every 13 jobs lost in the public sector, only one was created in the private sector. That is the reality of what is happening in the economy. We should not take, with any degree of faith, the Government’s reassurances that changing regional pay will make a key difference.
On both sides of the House, we have come to understand that fairness is an important theme in modern politics. In politics, we seem to be tussling daily over who can be the fairest, and the Government have to stand against the test of fairness on this issue. They need to answer the question whether it is fair to target public sector workers once more to pick up the bill for a crisis in our economy that they did not cause. Is it fair for the Government to implement a policy that will once more impact disproportionately on less affluent areas that have greater health problems due to the legacy of heavy industry and other issues? Is it fair to implement a policy that will suck demand out of their economies and further reduce the incomes of people living there?
The Government have a manifestly failing economic strategy to reduce the deficit that has led, on their admission, to an increased level of borrowing— £158 billion extra is being borrowed as a result of the their policy. That is why they are thrashing around looking for extra savings and why they are countenancing further unfair and destructive measures. They need to think hard about the policy, conduct a proper review and provide evidence to substantiate their dangerous claims.
The Economic Secretary to the Treasury (Miss Chloe Smith)
Happy new year, Mr Chope. I am sure that it is an honour for us all to take part in the first debate of 2012, so let us enjoy ourselves for that reason. I thank the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) for securing what has been a thorough and interesting debate. It might not be a new debate, as my hon. Friend the Member for Montgomeryshire (Glyn Davies) said, but it is extremely important none the less.
The policy is not about saving money—I shall pause for the hon. Member for Pontypridd (Owen Smith) to draw breath—but about supporting economic growth, and I will go through the reasons why the Government believe that the policy could do that. A simple fact of life that needs to enter the debate is that public and private sector organisations compete for employees in different markets across the UK. There is no way around that fact. Equally, there is no way around the fact that private sector pay is, on the whole, set locally and that public sector pay is usually set nationally. I will set out two effects that those differences can have before going on to the meat of the debate.
The differences can do three things. First, they can hurt private sector businesses that have to compete in certain places with higher public sector wages. Secondly, they can also lead to unfair variations in the quality of public services—something on which I am sure that we would all have more to say, had we another hour and half in which to debate it. Thirdly—this is crucial—if a higher than locally desirable wage bill is set, public sector money is not always allocated as effectively as it could be within local areas. That has a knock-on effect on what the public sector can do with its remaining budget, which has a further knock-on effect on the number of jobs that the public sector can support.
Hywel Williams
To the contrary, given the problems of mobility of public service workers that would inevitably arise with regional pay, what consideration are the Government giving to the direction of labour in the public sector?
Miss Smith
If I have understood that correctly, it is about what definition the Government are giving to labour in the market. I beg the hon. Gentleman’s pardon—
Hywel Williams
The direction of labour. It is a good old-fashioned socialist policy.
Miss Smith
Absolutely—which I am clearly not ready for at 10 to 11 on a Tuesday morning.
The point that I was going to make, which is the most important one that I want to leave behind in this debate, is that the Government have set out no detailed proposals at this stage. As I think all hon. Members know, the proposal that has been made so far, through the autumn statement and subsequently, is only to ask the experts how public sector pay might better reflect local markets. I, for one, do not have a problem with that being done by letter. I hear what hon. Members have said about that. However, I am also particularly delighted that the hon. Member for Pontypridd changes his mind when facts change. I hope that in this case also he will wait for the evidence.
Owen Smith
Does the Minister accept that the Chancellor has clearly indicated that he is in favour of the reform? He spoke before the Treasury Committee, and no one can be in any doubt that he thinks it is a good idea.
Miss Smith
It is perfectly possible to think that something is a good idea and then to ask experts how it could happen.
Helen Goodman
Does the Minister therefore accept that all that has happened is that the Chancellor has asked how the idea could be implemented and how it would work and that no consideration is being given to the proposal’s overall economic impact?
Miss Smith
The best possibility of dealing with the overall economic impact will be when facts and data have been received. That is the point of the process that the Chancellor has laid out.
To move on to the content that we need to get through, hon. Members should be in no doubt about how important the public sector is and about the fact that the Government share that view and the desire for all parts of the economy to do well in the coming years. However, fiscal consolidation is a vital precondition for growth and part of the sustainable foundation that will let all sectors and all parts of industry do well and do what they need to. It is also part of achieving even growth across the country. It is right that public sector pay restraint should play a part in that fiscal consolidation. Public servants do a crucial job in delivering the high-quality services that we all look for, and it is right that we continue to offer the kind of rewards that attract the most skilled people to the public sector. However, it is incontrovertible that public sector wages on average continue to compare extremely generously to those of private sector workers. The Institute of Fiscal Studies, which has already featured in the debate, suggested that there is on average a 7.5% premium to working in the public sector over comparable jobs in the private sector. That makes a strong case for public sector pay bill restraint.
I want to discuss the rationale for the policy suggestion that has been made and the Chancellor’s effort to seek views on how it can be carried out. We must ensure that public sector pay is set at the right level for each labour market in the long term. I want to make it clear again that the proposals are not about generating savings, but about supporting economic growth by ensuring that wages are set at the level in individual localities. Indeed, a significant reason for the disparity between public and private sector pay is due, as I have mentioned, to the difference between pay that is set locally and pay that is set nationally. Typically, private sector pay is more subject to the rates paid by local competitors, the local cost of living and perhaps, in some cases, local turnover rates. However, public sector pay is usually set on a one-size-fits-all basis nationally. Accordingly, public sector workers can often be paid more than private sector workers in similar jobs in the same area. That has potentially damaging consequences for the economy. For example, private sector businesses, perhaps such as the one that my hon. Friend the Member for Montgomeryshire once ran, which are looking for staff to help them to set up or grow, need to compete with much higher public sector wages in the same area. That is the ultimate crowding-out argument within the debate.
I want to refer briefly to the system of zonal pay in the Courts Service, which has been mentioned. It demonstrates that it is possible for pay to be responsive to local labour markets within a national bargaining framework. Of course, those zones did not simply conform to regional boundaries, but took into account the local economy by, for example, putting Norwich, Exeter and Newcastle in the same zone. The debate has a misnomer at its heart. In the autumn statement, the Chancellor announced local pay, not regional pay, so we are not talking about something that might take effect at the level of Wales. We are talking about something that may, depending on what the experts say, happen at a lower level.
Miss Smith
I will just have to repeat myself on this point: depending on what the experts say, it will be at a more local level. That is what I, for one, look forward to from those experts, as, no doubt, do all those people who like facts.
The Government are not setting out detailed and prescriptive proposals. The hon. Member for Sedgefield (Phil Wilson) would no doubt like me to give a quote, but I shall not give him that pleasure this morning. Public sector work forces have a variety of pay structures, as has been mentioned. The Chancellor has therefore written to the independent pay review bodies to ask them to consider how to make public sector pay more responsive to local labour markets. They will report back with interim findings by July. That will include union evidence, to answer the question of the hon. Member for Bishop Auckland (Helen Goodman). I shall be absolutely clear about who will be included in the scope of the relevant body: it will be the NHS, excluding doctors and dentists—again, to respond to a point made by the hon. Lady—and it will include teachers, prison officers and the senior civil service. To respond to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), it will not include the police, who, as he knows, will be subject to the Winsor review.
The Minister for the Cabinet Office will co-ordinate and assist Secretaries of State in exploring how local, market-facing pay could be introduced in civil service Departments. As to the devolved Administrations, public sector pay in devolved areas is a matter for them, except for those areas where workers are covered by a national pay review body. That said, we are keen to see local market-facing pay introduced across the UK, and we urge all devolved Administrations to consider issuing separate remits for the relevant pay review bodies within devolved areas.
The hon. Member for Carmarthen East and Dinefwr asked me about an impact assessment on how the approach taken in the Courts Service turned out. Very speedily, I can offer him a couple of points about what happened across that experience. First, staff adoption was at 97% over a year later. Secondly and more broadly, analysis conducted after the reforms showed that the majority of locations had a healthy turnover and that the Ministry of Justice was able to recruit and retain staff throughout the country. He also asked me about the Office for Budget Responsibility costs of the public sector work force. If he would let me have that question in writing, in more detail, so that I can answer him as accurately as I can, I would be happy to do so; but I must finish a couple of other points in a very short time.
Public sector pay restraint and reforms to local pay policy are a key step to supporting local economic recovery and growth. Indeed, supporting regional private sector growth has been at the heart of the Government’s growth strategy. Hon. Members may want to consider, for example, the £30 billion of investment in infrastructure projects across the UK set out in the autumn statement, enterprise zones and the regional growth fund. We need to look at the aims and the areas and communities that are dependent so far on the public sector to support them in making the transition to private sector-led growth and prosperity.
Hon. Members have rightly talked about the need for fairness. As we all know, many families face difficult prospects. That is why the Government have taken practical steps to provide support, including—as the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) will welcome—having gained more from a tax on bankers every year than the previous Government did in a single year. She will also welcome the protections for the lowest paid during the public sector pay freeze, the deferring of January’s scheduled fuel duty increase and the decisions that have lifted more than 1 million out of income tax altogether.
The Government have already taken considerable action to achieve strong, sustainable and balanced growth that is more evenly shared across the country. By moving towards local public sector pay, we can ensure that we have high-quality public services across the UK and do not crowd out private sector recovery.
History Teaching
(12 years, 10 months ago)
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Chris Skidmore (Kingswood) (Con)
I thank the Speaker for selecting this subject for debate and am grateful to have a second opportunity to talk about history in schools. When I raised the topic during the Christmas Adjournment debate, I said that if I were to choose one Christmas present, it would be to make history compulsory to the age of 16 in schools. I might have been a bit too hasty in making that wish, however, because the national curriculum review is set to continue for another two years.
Today is a good opportunity for Members to discuss the teaching of history in schools and whether it should be compulsory to the age of 16, as it is in most other countries in Europe. As I said in the Adjournment debate, it is a mark of shame that we, along with Albania, are the only European country that does not teach history in some form beyond the age of 14.
In the Adjournment debate, I mentioned a report that I have written, “History in Schools: A School Report”. I am happy to give a copy to any Member who is interested in reading it; the Minister already has one to hand. Essentially, my report highlights the state of history in schools today, and it does not seek to make party political points. In 1997, a paltry 36% of pupils studied history GCSE. Last year, the number dropped below 30% to 29.5%. Those figures, however, hide what is happening with history across the country. Instead of uniting us as one nation and allowing us to have a coherent national identity, the subject has divided us into two nations of haves and have-nots.
In my report, I break down all the figures by local authority and show the number of pupils taking and passing history at GCSE. In 77 local authorities, fewer than one in five pupils is passing history GCSE. However, the situation is even worse than that. In local authorities such as Knowsley, fewer than 8% of pupils are passing history GCSE.
Sir Bob Russell (Colchester) (LD)
The hon. Gentleman has given us the headlines. Does he share my concern that at local history level, the figures are even worse? Pupils do not know what has gone on historically in their own local areas.
Chris Skidmore
I agree with the hon. Gentleman, and I will come on to that topic later. First, as a good historian, I want to set out a narrative of what has gone on in the country so far and then to debate what we should do about it. I entirely agree with the hon. Gentleman that local history should feature more prominently in the curriculum, but more on that anon.
In 77 local authorities, fewer than one in five pupils are passing history GCSE. In one local authority, Knowsley, the figure has gone down to 8%, with just four pupils out of 2,000 passing history A-level.
Kevin Brennan (Cardiff West) (Lab)
Let me understand what the hon. Gentleman is proposing. Does he think that the teaching of history post-14 should be compulsory in academies?
Chris Skidmore
I was going to get on to another figure. In 159 schools, not a single pupil is being entered for history GCSE, which includes academies and comprehensives—it is roughly balanced between the two. We must have an honest debate about the curriculum. The national curriculum in the 1990s intended to make history compulsory to 16, and we should be looking to do that in academies, comprehensives and all other schools.
Bob Stewart (Beckenham) (Con)
Is it my hon. Friend’s intention to make sure that every student studies history until GCSE level? If students are taking GCSEs, which presumably most of them are, they will therefore take history at GCSE, which is something that I totally support.
Chris Skidmore
I want history to be compulsory in some form to 16. I will come on to the important issue of the qualification later. Just as maths, English and science are compulsory in all schools, so too should history. Education is about not simply providing skills, knowledge and requirements for jobs, professions and universities—or whatever route or career a pupil may decide to take—but creating a canon of knowledge. I want every pupil to leave school not only with the basics but with an understanding of the basic principles of our constitution and history. They should have a rounded education and history plays a vital role in that.
Kevin Brennan
By what mechanism would the hon. Gentleman like to make history compulsory in academies, given that academies are exempt from the national curriculum?
Chris Skidmore
I am startled by the hon. Gentleman’s response. He was a Minister once.
Chris Skidmore
The hon. Gentleman knows very well that although academies are exempt from other subjects in the national curriculum, pupils still have to study maths, English and science. Those subjects are compulsory, and academies are bound by law in academy frameworks and agreements to provide them. Under my proposals, history would be included in the same way.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate my hon. Friend on securing this very important debate. I studied history at A-level. Let me suggest where we should go from here. Certain schools, such as Chatham grammar school where I am currently a governor, have now brought in the E-bac system in which the humanities, history or geography, have to be taken by students up to the age of 16 for GCSE. That is the way forward. Under this Government, people are being pushed to take history and there is a recognition of its importance in our curriculum and in our understanding of our country.
Chris Skidmore
The E-bac is a welcome development, but we must go further. When looking at grammar schools and selective schools, it is interesting to look beneath the statistics. In comprehensive schools in 1997, 169,298 pupils took history GCSE. That figure has now dropped to 155,982. [Interruption.] The hon. Member for Bishop Auckland (Helen Goodman) is chuntering. Would she like to say something?
Helen Goodman (Bishop Auckland) (Lab)
Will the hon. Gentleman tell us why there has been this decline in the study of history? What is his analysis of why this has come about? Is it to do with the interest of the pupils?
Chris Skidmore
The decline has been a slow one. I do not wish to make party political points during this debate. David Cannadine’s excellent new book, “The Right Kind of History”, shows that these debates have been going round in circles since the early part of the 20th century and that lamenting the decline of history is nothing new. What is new is that we are competing in an international market against other countries, the pupils of which are being rigorously taught and assessed in all subjects and are driving forward in a way that our pupils are not.
There are some schools in which pupils take history to 16. My hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) has mentioned a grammar school in his constituency. It is of interest to me that while the numbers taking history GCSE have been declining in comprehensive schools, they have been increasing in grammar schools since 1997. Although we have 29.5% of pupils in comprehensive schools taking history GCSE, we have 55% of pupils in grammar schools taking history and 48% in independent schools. The gap between grammar schools and comprehensive schools in terms of the proportion of pupils who are taking history GCSE has increased from 17.4% in 1997 to 24.9% in 2010, which is a real problem. The growing divide in education is no longer just about standards in different parts of the country but about the subjects that we choose to take at school. I worry how that will affect our national identity.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I thank my hon. Friend for securing this debate and pursuing the topic. Does he agree that part of the decline began in the 1970s? Let me declare an interest here; I was a teacher in the 1970s. History teachers were almost compelled to change the nature of what they were teaching to encompass what is known today as the schools history project. Instead of teaching the narrative, teachers were forced to try to teach 11, 12 and 13-year-olds to become historians. What happened then was a loss of confidence and interest in what history teachers were trying to do.
Chris Skidmore
When we look at the nature of the curriculum itself, we see that there have been historical problems. My hon. Friend was a secondary school history teacher before he entered this House and therefore has a wealth of experience—probably more than me—of what actually happens in schools with teaching history. He also knows that, although we may talk about the curriculum and assessment and examination structures, if we are going to make history compulsory to 16, for pupils themselves history will only be as good as the teachers who teach it, which is obviously a crucial issue. We all remember our great teachers when we were at school. I had great history teachers, which was one reason why I ended up on the road to becoming a historian before I entered this place.
The Ofsted report, “History for all”, showed that history teaching was “good” or “outstanding” in 63 out of the 83 primary schools that Ofsted assessed, and “good” or “outstanding” in 59 out of 83 secondary schools that it assessed. Nevertheless, the report expressed genuine concerns about the quality of the subject training for teachers.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this issue to Westminster Hall today. As he has said, history is not just about dates and events, because it is about more than those things. It is also about learning the lessons of lives that were well lived and the lessons of lives that were poorly lived, and perhaps about telling the difference between the two. Does he agree that education in history is much more important than just teaching the facts, figures and dates of history?
Chris Skidmore
One of the reasons why I wanted to secure this debate was to try to get some form of agreement and to have a discussion about more than the nature of history. We can talk about “what” history or “whose” history—whether it is local or national history—and we need to talk about history in terms of the curriculum and examinations, but let us start from a baseline that we can never deny, namely “why” history. Historians have probably come at things from the wrong end, in that they are, as Isaiah Berlin would have put it, foxes rather than hedgehogs. We often focus on the minutiae, and so we start focusing on what should be in the curriculum and how we should frame it without coming to an agreement that we should have history to 16, as most other countries in the world do. That is where I want to get to, and then let us fill out things and colour in the blanks.
Rehman Chishti
I want to follow the question put by the hon. Member for Strangford (Jim Shannon). With regard to teaching history, it is linked to the use of essays, in promoting critical thinking, vocabulary and one’s communication skills. Nowadays, however, modern assessments are much shorter and therefore essays are not used, so the communication skills and increased vocabulary that a student would otherwise have got from writing history essays are not there.
Chris Skidmore
That is a very good point. When we look at the curriculum and the historical content that is being taught, at the moment history teaching obviously finishes for most people at 14. The problem with that approach is that trying to fit into the syllabus the broad span of British history becomes almost impossible and in fact we get a situation where, instead of having a narrative and chronological approach, there is a sort of “Dr Who” time travel fantasy of going from the Tudors back to ancient Egypt, forward to the Romans and then to the Victorians. As a Tudor historian myself, I know that the wars of the roses are rarely taught in schools. Equally, I see that we have a civil war historian in our midst today, the hon. Member for Stoke-on-Trent Central (Tristram Hunt), and he will probably agree that the protectorate is rarely taught in schools and neither is the Glorious Revolution. Unless students have some broad form of a chronology, it is impossible for teachers to get across a genuine interest in history. If history is taught in bite-sized chunks, we are not only doing history a disservice but history students, because they cannot understand the very framework of history itself.
We need to look at that issue, and I believe that making history compulsory to 16 would aid that process of creating a chronology, because for the first time we would then be able to integrate key stage 3 and key stage 4. When we were at school, we actually learned more British history in key stage 3 and even in key stage 2 than we did later on. At the moment, I am writing a book about the battle of Bosworth, an event that is a compulsory part of the curriculum in key stage 2; students have to learn the dates, the framework and what happened then. However, the battle of Bosworth is not part of key stage 3; instead, in key stage 3 students go back again to the mediaeval period. I think that key stage 3 covers the iron age to mediaeval times, with no reference to the Anglo-Saxons or to the Vikings. We need to look at that issue. We should leave the detail up to the national curriculum review within the framework of history being compulsory up to the age of 16.
Helen Goodman
I am grateful to the hon. Gentleman for giving way to me for a second time. I am interested in the examples that he has given, because the interesting thing about Britain and our modern identity is surely the fact that, for the past four centuries, our history has been an imperial one and that is one of the most important things about Britain. I am not denying that 1066 matters, but the hon. Gentleman did not mention that whole imperial period, and he needs to foreground it.
Chris Skidmore
Yes—absolutely. I now want to talk about the GCSE itself with that point in mind, because we currently have a situation where students stop studying history as a compulsory subject at the end of key stage 3, and then some pupils start their history GCSE as an option. However, the GCSE itself does not necessarily focus on British history; often it focuses on the Third Reich and Stalin’s Russia. There is also the schools history project, which is the history of medicine, but that is a very narrow subject to be assessed on.
Although we can debate what should be in the curriculum, we cannot get away from the fact that in our age examination and assessment drive learning in schools. In addition to history being made compulsory to 16, what we need is a narrative British history GCSE that teaches the whole span of British history, and our imperial history to boot, right up to whatever we would like to call the cut-off period of history. Such a GCSE would give pupils the option to study in depth every period of British history and to be assessed on their knowledge of those periods. Again, I do not want to say what the exact nature of the exam for such a GCSE would be, and a lot of work would need to go into preparing it. However, the GCSE in its current form does not allow narrative British history to be taught. So, in addition to making history compulsory to 16, we also need qualification reform.
I will conclude now, as I am sure that other Members want to speak in this debate; I am delighted to see so many Members in Westminster Hall today—happy new year! This is the first debate for me in this new parliamentary term. We should come to a common conclusion and common ground, so that we can discuss what should be in the history curriculum and what type of examination we should have. We cannot deny that there is a serious problem in our nation. As I said earlier, a subject that should unite us as one nation is becoming a subject for two nations—the haves and have-nots, or whatever one wants to call them. In certain areas of the country, history is becoming a dead subject in schools. I want that situation to end, and I therefore propose that history should be compulsory in schools until the age of 16.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Thank you very much indeed, Mr Chope, for allowing me to speak. I congratulate the hon. Member for Kingswood (Chris Skidmore) on securing this valuable debate, which has really put into practice his excellent skills of research, data analysis, econometrics and geography. All those skills have been brought together today, showing that he is a superb historian.
It seems to me that what we are discussing today is not really geography; we are discussing the two-nation divide in terms not of the north and south, but of a class divide, based on the traditional Disraelian notion of two nations.
I agree with the hon. Member for Strangford (Jim Shannon) that history has a particular locus and place within schools. In many ways, I was opposed to the push under the last Government for citizenship teaching, because it seemed to me that, first, citizenship teaching took a chunk out of the syllabus and more often than not history teachers were forced to teach citizenship and that, secondly, we should teach citizenship through history. A study of the past is the best mechanism for understanding one’s role in the present. Obviously, one can divert into the constitution, the judiciary and all the rest in terms of the modern world, but in terms of understanding both our place as citizens and the role of Britain, it seems to me that history is the best place to do that. At one point, we actually had a review that said we should teach history as part of citizenship, which seemed to me to get things slightly the wrong way round.
As we have heard, history is also a very effective academic subject. The Education Secretary likes to draw on the case of Mark Zuckerberg studying ancient Hebrew and then founding Facebook, but one can also point to many innovative entrepreneurs, successful public servants and business people who studied history and benefited from the rigours that studying history brings.
It seems to me that the subject is not necessarily in crisis. The hon. Member for Kingswood mentioned David Cannadine’s new book, which points to this perpetual debate about the nature of history and, without being too partisan on the first day back after the break, I suggest that this is a crisis within the Conservative party. The party likes to talk about the teaching of Britishness and of British history and our understanding of it, partly because of its own various problems with the nature of modern Britain, and it retreats into a debate about the teaching of British history often, it seems, as a vehicle for other more contemporary debates. Of course, historically, the role of history is to retreat into the past to analyse the present.
Figures for the take-up of history at GCSE level hover around 30% to 35%. The percentage has gone up and down over the years, and I think it stands at around 33% at the moment.
Chris Skidmore
I will send the hon. Gentleman a copy of my report, so that he has the accurate figures. I came to this debate not wanting to make party political points, but the percentage has not hovered; it has gone down consistently every year in comprehensive schools since 1997, and it has just gone below 30%, which was partly the trigger for my calling this debate and writing the report.
Tristram Hunt
I am grateful for that intervention. I was referring to the national figures, and let me now come on to the specificities of the hon. Gentleman’s debate.
There seems to be a class divide—a worrying schism in what our children are taught. As the hon. Gentleman suggested, it is more than the loss of an academic subject; it is the loss of a patrimony and of a broader understanding of citizenship and identity. By not teaching history in many of our disadvantaged communities, we could be losing some brilliant future historians. We are very good at history in this country. Indeed, we are often accused of being too obsessed with the past, but we produce a good number of scholars, often from disadvantaged backgrounds.
Over the past 10 to 15 years, we have faced an unacceptable shunting of children from disadvantaged communities away from academic subjects and, more often than not, on to semi-vocational ones. That has boosted grades for schools but has sold these kids, who have wanted to go on to sixth form and university, a pup. There has been an ethos that in certain communities such subjects are too difficult, and that has presaged league table results.
We can all relate anecdotes of young people being pushed away from subjects that they should be encouraged to take up. We need a rethink. We are all in favour of proper training in vocational subjects, but it should come after a detailed and solid academic training. That is the German model, and the Alison Wolf report importantly suggested that we should get the grounding right and then allow young people to make the decision about which way to go, with either businesses taking on the training or it being continued in schools.
We should not shunt children from disadvantaged communities off academic subjects; nor should we allow schools to merge history and geography into a humanities subject in which pupils appreciate no element of the discipline. That is particularly a problem in certain academies, and Ministers are slightly shifty on the subject, not least because it is very difficult to get data out of the academies about what is being taught. I have tabled endless questions, which have been answered in different ways, but it seems that in the push for league table results certain academies are disfranchising children.
This also raises an interesting point about the ambition of the Secretary of State for Education for a national story of Britain and Britishness. If the Government’s policy is for ever greater pluralism in educational provision, with free schools and academies, where will we get the national cohesive story from if every school tells a different story about history and if every school is encouraged to talk to its own student make-up? The Government have an interesting tension between a traditional conservative belief in a national narrative and their open-market approach to schools and what they teach.
The problem is not the syllabus. Key stage 3 teaches empire, industrialisation and a narrative story of British history. It is a pretty good syllabus if it is done well and, crucially, if it is given the time, but the average 13-year-old in a British school gets only one hour a week to study history, and with such timetabling—only 33 or 34 hours a year—it might not be possible to develop the skills, understanding and narrative. There are cries about there being no Nelson, Wellington or Churchill in the syllabus. That is not true, but there needs to be the space and context within which those characters and their history can be taught.
History teachers do not regard the syllabus as the problem, and the old divide between skills and narrative is not so much the problem any more either, because the best history teachers combine them—one of the advantages of modern information technology and teaching mechanisms. It is exciting if teachers can get kids to use the internet to look at mediaeval roles, the Magna Carta or the Bill of Rights, and that also teaches a narrative history.
Chris Skidmore
Ofsted’s “History for all” report found that the quality of subject training for teachers was inadequate in one in three schools and that teachers in those schools did not fully appreciate progression in historical thinking.
Tristram Hunt
The hon. Gentleman makes a very good point. We all know that inspired and inspiring teachers are key. With numeracy and literacy over the past 10 years, it seems that in certain circumstances teachers got bored and that children could sense it. If teachers are not inspired and children are not inspired by them, we do not get the learning, and we need much more focus on ensuring that teachers are inspired and that they are up to date with the latest scholarship and understand progression.
In Stoke-on-Trent, I would like to get Keele and Staffordshire universities together with the local teachers to ensure that the latter are up to date with the scholarship and are still inspired by it. As my hon. Friend the Member for Cardiff West (Kevin Brennan) said, if a teacher is inspiring—as he was in his classroom—the children come alive, and are passionate and interested in the subject.
I will end here because I know that many other Members want to speak, and I apologise for doing so, because I have to meet a constituent later this morning. I am still in two minds about the push towards compulsory history to 16. I have an open mind about it. We risk damaging interest in pursuing the subject if we make it compulsory for huge swathes of children who are simply not interested. That will affect learning in the classroom.
I appreciate the broader issue about history’s role in citizenship. I also understand the point about learning and over-learning certain elements of our national past, such as the Third Reich and dictators. That has much to do with the commerce of education. Once we have history textbooks and the machinery of learning, it is difficult to get out of the rut of learning and teaching the same things over and again. It is challenging to get undergraduates who are almost trauma victims, having studied the Third Reich three times, to appreciate broader European or British history.
Jim Shannon
When I was at school, I had the opportunity to learn Irish history, which is probably most unusual for a person from a Unionist tradition. It did not make me any less of a Unionist; indeed, it cemented my Unionism and made me stronger in my beliefs. That is an example. I learned something else, but remained a Unionist.
Tristram Hunt
Those of us who are privileged to have read W. E. H. Lecky’s “A History of Ireland in the Eighteenth Century” will know that, although we might think that studying the history of Ireland will push us one way, it can take us in a very different direction.
I conclude by paying tribute to the hon. Member for Kingswood for his research and for bringing the matter to national prominence. Class and social division are an issue. We must ensure that schools in disadvantaged communities and areas allow their pupils the opportunity to study history in all its wonderful manifestations.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate my hon. Friend the Member for Kingswood (Chris Skidmore) on his well-chosen topic to start off the year. I am slightly in awe of the two fantastic historians in the room. It makes me rather nervous to offer any contribution, but in for a penny, in for a pound is the only attitude to take.
People with an interest in history cannot help realising that discussions about why we study it and what we should study inspire more vitriol among the historian community and more ink on the pages of our opinion magazines and newspapers than almost any other subject. My hon. Friend has set his topic commendably wide, but rather than rehearsing the undergraduate essays on “Why study history?” that I wrote for my Oxbridge preparations, I will focus on why and how we should study it.
We all have a personal view on what history is, why we study it and why we learn it. After 10 years of studying it, just as I was about to leave university, it finally taught me how to think properly—a useful lesson that I like to think that I have carried with me into this place, although opponents may disagree. History is also a study of the consequences of human nature. As a subject, it is not unique in teaching us how to think properly, form an argument and judge and assess evidence—other topics can do that, too—but it brings an additional benefit: it comes with a body of knowledge that allows us to understand why we are where we are, which is fundamental.
I realise that there are some, perhaps wishing to make mischief, who define the Conservative party as a bunch of conservatives with a small c obsessed by our narrative history and constantly seeking that golden thread. That does not interest me. I would far rather focus on what history should not consist of. I have no desire to see children sitting in a classroom chanting their regnal dates as though they were times tables. It is like having a wardrobe full of coat hangers with no clothes hanging on them. I am not sure that I could recite the kings and queens of England with any great accuracy.
Sir Lewis Namier identified elections as the locks on the great canal of British history. He was right, but there is no point in being able to recite every significant general election if we cannot talk about the water that flowed through those locks and the changes that came with them. I would love to see Sir Lewis Namier applying his comparative biography techniques to the current Government and Opposition Front Benchers. He might show some interesting comparisons with what we occasionally read in the press.
Nor should history be only about entertainment—horrible histories, blood and gore, and who killed whom in the Tower of London. That is entertaining, but what does it teach us? I am not sure that it teaches us much, other than how to have fun. History is not about teleology, a national story or just a narrative, and it is certainly not about emoting. I despair when students who visit the House of Commons are asked to write essays about what it might have felt like to be a roundhead, a cavalier or a soldier in the trenches and so on, but have no idea of the context of what they are being asked to empathise with. If they are writing as a soldier in the trenches, they do not know why they are there, what led them there or the end result; it is all about empathising. I sometimes suspect that it is almost an excuse to go on a day trip to the Imperial War museum.
History can be a useful tool. It should not just be about great men and personalities. I hold my hand up as being guilty of studying Weimar Germany for GCSE, A-level and my degree. By the time I took my degree, I could almost recite the name of every Reichstag member in 1932. That was not exactly helpful; it simply showed that it is possible to end up as an anorak, knowing more and more about less and less.
What we admire in good history writing or a good university history course is not necessarily what we should admire in a school syllabus. Often, it is hard to throw off what we acquired in our later years when thinking what we should be trying to achieve in our school system. I spent a happy Christmas indulging myself in the 24-hour existence of Carpatho-Ruthenia, which lasted for most of my Boxing day reading. Although it is a fantastic piece of historical research from Norman Davies, it is not something that I would want to inflict on a group of 11-year-olds.
The question then becomes: should we compel certain periods or topics on a history syllabus? Do we believe that history has a didactic purpose? It is fair to say that many people who teach history have strong, often political views and that, naturally, part of what they want to communicate to their pupils is an enthusiasm for the topic and the period. I cannot remember a single one of my history teachers who did not allow a slight degree of political opinion to sneak out in whatever period they were teaching. Perhaps that is understandable, and it is not always a bad thing, but there are dangers in trying to use school history teaching to communicate values. That is my big fear. Ultimately, history is not about communicating values; it is about communicating skills.
The first, last and only time that I ever studied Anglo-Saxon history was during my first week at secondary school, when we spent a week trying to work out who was buried at Sutton Hoo. I think I came down in favour of King Raedwald. I was probably wrong; we still have no idea, I am sure. I have no desire to go back and read anything more about Anglo-Saxon history, but that one week reminded me that what we are trying to do is assess evidence, reach conclusions and construct an argument. Those are the basic and essential skills that we must absorb when we teach history in schools.
Rehman Chishti
I support my hon. Friend’s point. In society now, a fundamental concern is the failure in literacy over the years. Does he agree that history provides a vital opportunity to develop a sustained, lengthy argument, which helps improve literacy?
Paul Maynard
I entirely agree. One of my great frustrations in life is that I discovered how to write an essay only in my last term at university. Unfortunately, it came a bit too late to enhance fully my learning experience during my entire education.
We have to be careful that we do not turn our history lessons and our final history exams—after all, what matters ultimately is what we test—into some sort of quiz or series of multiple choice questions. I have grave reservations about some A-levels. It is to my eternal shame that I got a grade A at A-level politics by just walking in off the street and sitting the exam. I failed to study the subject during the sixth form; I just took it for the fun of it and thought I might get a grade E. It seemed like a fun thing to do. I shocked both myself and the school’s head of politics by getting an A, largely because the exam was based entirely on general knowledge as far as I could make out. It asked questions like, “Tick next to the date of the last general election,” but I do not think that that was something that needed to be studied.
I think that the skills that history teaches us should be made compulsory up to the age of 16. I support my hon. Friend the Member for Kingswood entirely on that point. It is a tragedy that far too many children miss out on the opportunity to study history. We do not need to make history frightening or scary, or obsess about the clichés and the grand narrative of the golden thread of British history.
I represent two seaside towns, the history of which, if we tried to comprise the whole of British history, would not start until 1800, because before that not much was built on Blackpool North and Cleveleys, other than a few mud huts here or there. The hon. Member for Stoke-on-Trent Central (Tristram Hunt) is pulling a face at me as though to say that I am wrong—that would not surprise me—so perhaps the correct date is 1730. None the less, there is immense enthusiasm in Blackpool for local history. We have community heritage champions who, although they are often older people who did not have the chance to study history in the way that we would all perhaps like to do so, get really excited at the chance to learn new oral history techniques.
My constituency has a Jewish cemetery. We no longer have a Jewish community to speak of, but people are fascinated by the cemetery and what it tells them about the sort of people who were active in Blackpool in its heyday. It would be a fantastic tool for local children to learn about the area in which they live. I am a strong supporter of using local history as a way of making history interesting for those who study it.
As ever, however, we cannot look at just the baubles on the Christmas tree. There is no point in teaching children about the things that interest and entertain them unless they understand those lock gates on the canals of both British and European history. Until we understand how it all links together, I do not believe that history will achieve the goal that it should be setting itself. We should interest people, but we should not exclude them from fully understanding what makes the country in which they live what it is today.
Sir Bob Russell (Colchester) (LD)
I congratulate the hon. Member for Kingswood (Chris Skidmore) on securing the debate and on setting the scene, along with the other two previous speakers. Following on from my intervention, I want to emphasise the importance of local history. We have just heard the hon. Member for Blackpool North and Cleveleys (Paul Maynard) say that although his area has only been in existence for some 200 years, it has its own rich, distinct history. I represent Britain’s oldest recorded town. Indeed, parts of the western boundary of my constituency are ancient earthworks that predate the Roman invasion.
I pay tribute to all those schools and history teachers who enthuse young people; the issue is that too few do. I want to place on record my appreciation for my history teacher at St Helena school 55 years ago, Mr Brian Barton, who for some reason was known to his contemporaries as Dick Barton, and who, 55 years later, is a tour guide in Colchester. He is not the only one. We are blessed with contemporary historians, such as Andrew Phillips and Patrick Denney, and Philip Crummy of the Colchester Archaeological Trust, who bring history alive. Two thousand years ago, we had the only Roman chariot circus in Britain; Philip Crummy discovered its remains only in November 2004. That is local history in a national context, and in the context of the Roman empire. I want such aspects of local history to be introduced in schools throughout the country, because I passionately believe, as the hon. Member for Blackpool North and Cleveleys said, that if we can enthuse young people about local history they are more likely to develop an interest in history as a whole. I share the concern that linking history and geography under the heading of humanities dilutes both.
My town is bidding for city status, so perhaps I will be allowed the opportunity to fly its flag. Colchester was the first capital of Roman Britain, and it is the only city of the Roman era that is not a city today. There is no record of that city status ever having been removed, so I hope that Parliament will conclude that we should keep it.
Rehman Chishti
On history, places and future city status, Medway was home to Lord Nelson, and the flagship Victory was built in the historic dockyard in Gillingham. There is a lot of responsibility not only on schools to promote local history, but on local authorities to promote it in partnership with those schools. Does the hon. Gentleman accept that, along with Colchester, there are other richly historic places, such as Medway?
Sir Bob Russell
There are indeed. I am grateful for that intervention. If I were a Norfolk MP, I would point out that Nelson came from the royal county of Norfolk long before he ended up in Kent.
I am concerned that, in my home town, not everybody is aware of our patron saint, St Helena, whose badge I proudly wear, or indeed of the history behind her; that is a bit of local history. We are also the home of the fictional character, Moll Flanders—a local girl who did quite well. In fact, she came from the very part of Colchester in which I grew up, Mile End. I think it is time that my home town promoted Moll Flanders, because she was a lively lass and I think she would attract tourism to the town.
Another local historian, Joan Soole, unearthed incredible Colchester connections with the battle of Waterloo, and those local connections brought alive the history of that battle for a completely new generation. We are a famous garrison town and one of the four super-garrisons, but before we became a garrison town, we had a strong Royal Navy connection with that famous battle. We are also the town in which the world’s most famous nursery rhyme was written. In 1805, the Taylor sisters wrote “Twinkle, Twinkle, Little Star”. Again, these things should be promoted locally. Every community has local history to promote.
Chris Skidmore
I am enjoying the hon. Gentleman’s brief potted history of Colchester, but with respect, I called for this debate to talk about whether history should be compulsory in schools at age 16 or not. I do not know about the views of other Members, but I would appreciate it if the hon. Gentleman would stick to the subject.
Sir Bob Russell
As the three previous speakers have said, the point that needs to be made is that we need to instil enthusiasm in our young people and get the education system to embrace history, because I regret to say—the hon. Gentleman’s statistics prove this, and it has not been denied—that interest in history has declined over the past 30, 40 or 50 years. I was lucky with my schoolteachers, first in my Mile End primary school and then at secondary school, and with my parents. It is all to do with giving encouragement, and getting teachers to be enthusiastic about teaching history.
Tristram Hunt
There is an important point to make about how we attract primary school and early secondary school pupils to the subject, so that they have a passion about the past. At its best, local history is not parochial; it goes from a local story to a national and then international story, but it is very difficult to begin to tell and teach children an international story without those building blocks. Colchester seems a good example of a story about a global imperium.
Sir Bob Russell
I will conclude in a moment, because with one intervention, the hon. Gentleman, to whom I am grateful, has embraced precisely the point that I have been trying to make. We can have anything we like in post-14 or post-16 history, but unless the foundations are there, the rest will not happen. It is up to the Government to provide the enthusiasm and direction. Since my education, experience has shown me that many teachers can be enthused and are enthusiastic. They provide that enthusiasm, and they must not be stopped.
Gareth Johnson (Dartford) (Con)
I add my congratulations to those given to my hon. Friend the Member for Kingswood (Chris Skidmore) for securing the debate. It is certainly a very interesting subject, and it has given rise to different opinions around the Chamber.
We have heard about people’s experiences with their history teachers, and how teaching particular subjects can create the opposite effect to that intended. Perhaps I should prefix my speech by saying that I was taught not only history but politics by my local Labour party leader. Consequently, I am a Conservative Member of Parliament who knows very little about history. It is perhaps surprising that although we are in the most historic place in the United Kingdom, we are having to remind ourselves about the importance and relevance of history in education. It is something of a cliché, but I strongly feel that it is only by learning from the past that we can understand the present and plan for the future.
Much has been said about the approaches of different countries. My hon. Friend the Member for Kingswood talked about the teaching of history in Albania and other countries. It is right for history to be taught in different ways in different countries, because that enables each country to see history from its own perspective. It is therefore right that we should learn history from a British perspective. Unfortunately, the hon. Member for Stoke-on-Trent Central (Tristram Hunt) is no longer in this Chamber, but I take issue with his concerns about the patriotism that Conservative MPs often display when talking about history. It is not just Conservative MPs who take a sense of pride in their British heritage; it cuts right across the political spectrum. Britain has the richest history in the world. If any country needs to prioritise history teaching, it is ours, because an understanding of history helps us to formulate national identity, pride and confidence in who we are.
Kevin Brennan
I am as patriotic as the next man, but does the hon. Gentleman not see that the statement that Britain has the richest history in the world is ludicrous and would not be made by anyone who knew anything about history?
Gareth Johnson
No, I do not agree it is ludicrous at all. More than any other country, Britain has had influence across the entire globe; the fact that English is spoken in more countries than any other language demonstrates the influence that this country has had throughout history. Some of that history is good, and we are very proud of it, and some of it we perhaps do not talk about as much as we should. However, nevertheless, we should be proud of our heritage because it is very distinct. It is certainly the richest of any country I have ever studied and it has influenced more countries than that of any other nation.
Yet it is right to say that the teaching of history in this country is patchy. In some areas, more than three quarters of students do not learn history after they are 14 years of age. We heard about the difference between classes that some people claim exists in relation to the teaching of history. Certainly there are differences between, for example, grammar schools and some comprehensive schools; the teaching levels are not comparable. The teaching of history varies around the countries, too. Although more people are passing GCSE history, fewer students are taking up the subject, which is a great shame.
The treatment of the subject is less patchy around Europe; it is compulsory in most European countries. As I said, my hon. Friend the Member for Kingswood mentioned Albania. That keeps cropping up, because it appears to be the only country in Europe that takes a similar approach to England with regard to history teaching. I do not know whether it is a fair comparison, but it certainly seems that there is less mandatory teaching of history in England than anywhere else in Europe. The rest of the UK fares little better.
Mr Gregory Campbell (East Londonderry) (DUP)
Does the hon. Gentleman agree that part of the problem is trying to ensure that history is relevant to young people? Often the teaching of the subject leaves young people either ostracised or simply feeling that it is not relevant to them today. This is not an either/or. Local history needs to be taught, based on its relevance to young people, so that they can understand their place in the national psyche and get a grasp of history.
Gareth Johnson
The hon. Gentleman makes an excellent point. It is a case of ensuring that students understand that history, and what has gone on in the past, is relevant to what they are doing now. I think that we would all accept that history at its best is the most fascinating subject on the educational spectrum. However, at its worst, it can be one of the dullest. A lot depends on the person in the classroom, and whether they can inspire pupils and convince them that history is relevant to them, as the hon. Gentleman correctly points out.
[Jim Sheridan in the Chair]
To be fair, the Department for Education is doing a lot of good work. The academy innovation goes from strength to strength. We have more protection and support for teachers, with regard to the anonymity that is extended when there are unfounded allegations; also, there has been a withdrawal of the requirement to give notice of periods of detention. In addition, spelling tests are coming back, and we are allowing grammar schools to be expanded.
I would like “more history teaching” to be added to that list of achievements. However, I am the first to accept that the Department for Education faces a dilemma, because it rightly does not wish to be too prescriptive about the curriculum. One of the Department’s aims is to make the curriculum more streamlined. Clearly, the challenge is for the Department to give good schools as much autonomy as it can while ensuring a structured education system for children. Therein lies the future difficulty for the Department in relation to history teaching.
The desire for more British history teaching is not about misplaced patriotism; there is no xenophobic agenda. However, we should not shy away from teaching British history with a sense of pride. For example, the history of the British empire should not be taught with any sense of shame or vitriol. We should allow students to embrace history as seen from a British context, because we will fully understand ourselves only when we learn where we have come from. National identity is incredibly important, and much of that identity is determined by our history.
John Pugh (Southport) (LD)
I congratulate the hon. Member for Kingswood (Chris Skidmore) on initiating the debate. He rather gallantly tried to separate two issues: first, how much history should be taught and, secondly, what is taught. However, I do not think he can do that because the case for more time must be related to the subject’s inherent value and the contribution that it makes to pupils.
When I was a young man, I had a passionate interest in history; in fact, it was the only subject that I was particularly good at in school. I lost my enthusiasm when I discovered that the more facts that I managed to acquire to settle historical disputes, the less availing they were as they were assimilated to different theories. I became generally interested in theory and fact, lost my passion for history and acquired a passion for philosophy.
I never taught history when I was a teacher, although I might have had the opportunity to do so, but I was appalled by what I saw and the narrowness of the curriculum. One of my sordid secrets is that I taught for many years in an independent school. Lots of people did history. They just did the Third Reich over and over again. Therefore, what a subject contains has a lot to do with whether it should be taught or taught to everyone. The reasons for that were quite crude in many respects. Putting the Third Reich on the syllabus meant more pupils and more sets. The headmaster often found that there were better results, too. Therefore, there was an incentive that had nothing to do with teaching history; it was all to do with the promotion of teaching careers, if I can put it as crudely as that.
As a result, some people who have done history leave school knowing very little history. They know very little about the development of their own culture and the nation’s culture, and have to pick it up through TV or books later on in life. There is an enormous and insatiable appetite out there for history as a form of entertainment—we all know that there is a history channel—but it is regrettable that people who study history can do very little on the Tudors and Stuarts, do nothing on the 18th century and have the most prejudiced views about the mediaeval period.
I think that we all have to accept that, within the space of a school year, people need to be selective. There has to be a selection about which bits of history will be taught. Any full story will, perforce, be something of an outline, but I am concerned about the principles that dominate selection in the school curriculum. Selection is often done on dubious grounds. We moved, slightly, on to that ground in the previous contribution. It can be done simply to reflect a nation’s favoured narrative of itself. History then becomes, to some extent, an exercise in self-justification. History can be a bit like autobiography—just a representation of what one would like the world and oneself to believe about the past. Many Governments in the world fall into the trap of sanitising their history curriculum, so that it becomes a very pleasing narrative about how all the things great and good came from their nation. I am sure that if we were in the French Parliament talking about history, we would have similar perceptions—different perceptions, but similar kinds of perception.
Moving away from the Nazis and the Third Reich, therefore, does not necessarily solve what should be in the curriculum. I have concerns about bolting back to what I was familiar with in my schooldays—the Whig narrative of history, where British history is represented as a seamless path to freedom, starting with Magna Carta, which, regrettably, very few people have actually read. When one actually studies it, it entrenches baronial privileges to provide their own courts and armies. A case was made in those days for choice and diversity. There was choice and diversity in who could provide the army, or who could provide the court, and that is found within Magna Carta. History can be selective in omitting all sorts of things that we would rather not touch on, such as the British role in slavery, or working-class history—the worst aspects of the industrial revolution. They are touched on, but they can be omitted, if we choose from the curriculum.
There are therefore inherent dangers in being too prescriptive about what sort of narrative falls into the curriculum. It may be unusual for me in this context, but that is why I genuinely favour choice and diversity in the history curriculum and making children self-conscious about the whole process of the writing of history—how these stories come about and how we reflect our narrative. History is very rarely written by the losers. The history of the mediaeval period was written by the Church and therefore those kings who gave the Church a bad time—King John is a classic example—got a very bad press.
History should contain an outline, but it should also contain opportunities for intelligent history teachers who care for their subject to choose selectively in a way that suits their candidate interest and aptitudes, but also covers what they think good history should be. I am in favour of making children, through the history curriculum, critically sceptical. If it does that, it is no bad thing.
Kevin Brennan (Cardiff West) (Lab)
What an interesting seminar we have had this morning on teaching history in schools. There has been a very high standard, as one might expect with so many eminent historians and hon. Members present here to debate the subject. As was revealed earlier, it is true that I taught history, alongside economics, in a comprehensive school for 10 years. In fact, I tweeted that I was going to participate in this debate and one of my former pupils, Cerys Furlong, who is now a Labour councillor in Cardiff—she was indoctrinated well when I was teaching history—tweeted back that she remembered the days when I was an actual history teacher.
I took O-level—as it was in those days—history back in 1976, and I took A-level history in 1978. I always remember one teacher saying to me that I would prefer A-level to O-level because it is about not only regurgitating facts, but understanding, interpretation and so on. I still have, in a cupboard at home, several green exercise books containing the notes from my history A-level lessons, which consisted mainly of our teacher—I will not name him unfairly—standing up for the first half of the lesson and giving an A.J.P. Taylor-type lecture. The second half of the lesson consisted of our writing down the notes that he dictated into those green exercise books. I sometimes wonder whether that is what the Minister with responsibility for schools has in mind when he talks about the sorts of changes he would like to see in our schools and whether, in his mind’s eye, he sees rows of pupils sitting down at their individual desks in their short trousers writing down whatever it is that the teacher has asked them to copy down off the board—perhaps in the manner which the hon. Member for Blackpool North and Cleveleys (Paul Maynard) deprecated in his speech of copying down facts about the kings and queens of England from the board. I accept that that is a parody, but the reason why I love history, and I think the reason why a lot of people love history, is not because of rote learning, but because of the interest in finding out that people in the past were just like us.
The idea that a diet of key facts and an officially sanctioned version of state history will inspire people or serve their interests is fanciful. We need to ensure that we do not go back to the approach taken when I was learning history at A-level in the 1970s. It was not the regurgitation of facts that caught my imagination about history, but the fascination of how people in the past, who were exactly the same as us biologically, acted in the face of the beliefs, culture, values and political power structures of the time, and what that told us about ourselves now. For me, that was the reason to study history.
As has been said, by the time I came to do a PGCE in history in 1984, the subject had changed a lot, which has been reflected in today’s debate. The Oxford history project and various other initiatives that were taken at the time involved talking about the skills needed to be a historian, assessing the reliability of evidence and, even for young pupils, thinking about what being a historian involves—being a kind of detective of the past. All those initiatives had come into the teaching of history, which was for the good. I looked recently at a careers guidance page for the university of Kent. One interview question for potential history teachers asked how they felt about a skills-based approach versus a factual approach to teaching history. That question, which seems to dominate a lot of the debate about the teaching of history in our schools at the moment, is fairly ludicrous, because teaching history cannot be skills versus facts. It has to be about having the skills to be able to learn, understand and interpret the facts. There is a legitimate concern about a loss of the sense of the narrative of history, which has been picked up in several of the contributions today. However, it would be a big mistake to turn history teaching into the dissemination of a patriotic narrative. It is interesting that there was not unanimity between colleagues from all parties on that.
We should not look at history as a way to mould our citizens into compliant people. We need to go beyond a simple glorification of the past, which I felt the hon. Member for Dartford (Gareth Johnson) might have suggested. We need students to be able critically to engage with the past and understand how it affects them now, as individuals, and their community and country. In respect of studying history, the emphasis should not be placed on a particular narrative based merely on a political agenda. We should study history to have a sense of identity beyond race and religion and understand something of a common culture, so that we learn about the past and ourselves as individuals and members of British society.
Sir Bob Russell
I was hoping that the hon. Gentleman would touch on local history, because clearly national exams will only deal with national history. Where does he think that local history fits into the teaching of history in schools, bearing in mind that we are a diverse country and within a county there will be different local history characteristics?
Kevin Brennan
I agree with much of what the hon. Gentleman said, and with what my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), who is no longer here, said: local history is a way of engaging the interest of pupils and students and enables them to spread out beyond that into a much wider historical context. Like the hon. Member for Colchester (Sir Bob Russell), I come from a town—in south Wales—where there are powerful remnants of the Roman empire, including an amphitheatre and a barracks of the second Augustan legion based at the Roman town of Isca, which is now Caerleon. Some 5,000 Roman troops were stationed there in a town that probably does not have a population as large today. It was fascinating for me, as a young person, to think about what it must have been like 2,000 years earlier in the area in which I grew up.
Although the title of the debate is not, “Should we make history compulsory to 16”, I think that is what the hon. Member for Kingswood (Chris Skidmore) wanted to focus on in his speech. I congratulate him on securing the debate and on raising that important subject.
One problem with, and paradox of, the Government’s approach to this matter is revealed, in a sense, by what the hon. Gentleman and the hon. Member for Dartford said. The Government say that they are seeking to decentralise education and to have schools that are effectively autonomous and exempted, with choice about what they teach, and if the Government get their way, by the end of this Parliament most schools will be exempt from a national curriculum. Yet they are undertaking a review of the national curriculum and will, presumably, at some point, advance detailed proposals about the national curriculum. Some interim information on that has been provided by the Government. However, by the end of this Parliament, if the Government proceed in the way that they are going at the moment, most schools will not be compelled to teach the national curriculum. If the hon. Gentleman is advocating, on top of that, that more subjects should be made compulsory up to 16—in this case, history—I do not understand the transmission mechanism by which his ambition might be achieved. Exultation is fine, as are nudge-theory approaches, such as the English baccalaureate, but ultimately the hon. Gentleman will not achieve his aim of making history compulsory if it is not possible to implement a transmission mechanism to compel schools to teach that subject.
Chris Skidmore
On transmission—I agree in part with the hon. Gentleman on the curriculum—the point of the curriculum is secondary to assessment, which is increasingly becoming the driver of standards in schools. Parents and their children will look at schools offering high-quality examinations and at the standard that is achieved in those examinations. This relates to my point about creating a narrative of British history GCSE, because I believe that that would be the lever by which parents would be able to look at all schools offering history GCSE—just as they can in respect of GCSE maths, English and science, which all schools have to offer. If history joined that cadre and we were able to ensure that all pupils studied the equivalent of a western canon, instead of a GSCE that focuses only on the Third Reich or Stalin’s Russia, we would have one that allowed pupils to study the narrative of British history.
Kevin Brennan
The hon. Gentleman is right. Many parents will do what he described, but not all of them will. That is why education itself is compulsory: it will not happen just through exhortation or because the Government say that they would like it to happen, or even by the Government employing little nudge mechanisms, such as the English baccalaureate.
I am reserving judgment on whether history should be taught compulsorily up to 16, because I, too, have a fairly open mind about that. History has never been compulsory. When I was 14 years of age, we had to do either history or geography, and we could not opt for both because of the tightness of the options in the school that I attended.
Kevin Brennan
That was common, as I can see from the reaction of the hon. Member for Colchester.
Kevin Brennan
I took a long intervention and do not want to eat into the Minister’s time. I apologise to the hon. Gentleman for not being able to give way one more time.
The Third Reich came up quite a bit during our debate. I confess that teaching that subject started during the time when I was teaching history. I taught up to about the end of 1994 and even back then the Third Reich was a major component of O-level history, which then became GCSE during the time I was teaching. It seems to have generated itself into a kind of educational industry over that period. My daughter, who is doing A-level history, is studying the Third Reich, having studied it at GCSE as well. I share the frustration of other hon. Members about that. Really, schools should not be doing that. I understand why they do it—teachers gain expertise and resources, and so on, and want to give their pupils the best opportunity to pass exams, which is only natural—but it should not be studied over and over, as hon. Members have described.
I shall conclude, because I want to give the Minister an opportunity to respond. We have had an interesting debate with some excellent contributions. First, I am interested to hear the Minister set out his plans and say whether he has any intention of making teaching history compulsory up to 16. If that is not his intention, perhaps he will make it clear. Secondly, what is the transmission mechanism by which he is going to get the national curriculum taught if most schools are exempt from it?
The Minister of State, Department for Education (Mr Nick Gibb)
I congratulate my hon. Friend the Member for Kingswood (Chris Skidmore) on securing this debate, which has been of high quality throughout. All contributions to it were valuable. My hon. Friend is a firm supporter of recognising the importance of history in schools and has played an active role in highlighting some key issues relating to this subject, including in his excellent recent report, which paints a worrying picture of the decline of history in our schools.
I strongly agree with my hon. Friend’s view that teaching history should form a key part of a child’s education. As young people develop, taking on the rights and responsibilities of adulthood, they need a good understanding and appreciation of how and why our systems of democracy and justice were developed and established. They also need to understand the aspirations and values that motivated our predecessors to create the society in which we live today.
I agree with my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who made an excellent, gripping contribution to this debate, that history is a body of knowledge that allows us to understand where we are. The study of history is also an important academic discipline in primary schools and at key stages 3 and 4 at secondary school. As well as providing knowledge, as my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) set out in interventions, it helps to develop pupils’ skills at reading, précising text and essay writing, which cannot just be left to the English curriculum in a school. It is about developing the skills of scholarship, which are important in a school career.
My hon. Friend the Member for Kingswood has written a number of excellent history books, including studies of Edward VI and Queen Elizabeth I. He would therefore have been as shocked as me to find that, in a survey of history undergraduates entering a Russell group university, only one in three knew who the monarch was during the armada. In the same survey, almost 90% of the undergraduates could not name a single British Prime Minister from the 19th century. Professor Matthews, who conducted the survey, said that the students were
“studying at one of the Russell group of universities, on courses where the entry requirement is an A and two Bs at A level, which probably places them in the top 15% of their generation in terms of educational qualifications. This implies that, all things being equal, 85% of my undergraduates’ age group know even less than they do. In other words, we are looking at a whole generation that knows almost nothing about the history of their (or anyone else’s) country.”
As my hon. Friend highlighted in his report, the decline in the number of pupils taking history GCSE in this country is a matter of concern. In 1995, more than 223,000 pupils, representing nearly 40% of pupils, were taking history GCSE. By 2010, this figure had dropped by more than 25,000, so it is now only 31% of pupils, or just less than a third, taking the subject. If we scrutinise that decline further, as my hon. Friend has, we see a worrying trend around the clear divisions in GCSE take-up between different types of school and pupil background and in whether they are eligible for free school meals. As the hon. Member for Stoke-on-Trent Central (Tristram Hunt) said, a potential class divide is being created in this country with the subjects that are being studied.
For example, nearly 20% more pupils in the independent sector study history than pupils in maintained schools. My hon. Friend’s report also highlighted the links to deprivation reflected in the take-up of history at GCSE. For example, in 2010 only 25% of black pupils took history GCSE compared with 31% of white pupils; only 18% of pupils eligible for free school meals studied the subject at GCSE level, which is 13% less than the percentage take-up for pupils overall, at 31%. The decline in the study of history has also been reflected in further and higher education, with the proportion of students opting for A-level history remaining static for a number of years. Enrolments in history at university are well below the average compared with other subjects.
I agree with my hon. Friend that the current history curriculum does not give pupils a grasp of the narrative of the past. Last year’s Ofsted survey of history teaching in schools, to which he referred, supports that view. It found that in primary schools, although pupils generally had good knowledge of particular topics and episodes in history, chronological understanding and the ability to make links across the knowledge gained were significantly weaker. It is also clear that many schools are spending less time teaching history. In the recent Historical Association survey of secondary school history teachers, lack of teaching time was the most frequently cited issue that teachers raised about key stage 3, which the hon. Member for Stoke-on-Trent Central, who I am glad to see is back in the Chamber having met his constituent, mentioned in his excellent contribution. Part of the problem is that GCSE history is too narrowly focused, with exam choices clustering around certain topics such as the American west 1840 to 1895 or the Third Reich, which has been referred to by many hon. Members. Exams have a significant influence over what is taught, so it is no surprise that pupils have huge gaps in their knowledge of our national story and a disconnected sense of narrative.
There are also issues with teacher training. Last year’s Ofsted report also cited that in most of the primary schools visited, there was not enough subject-specific expertise or professional development to help teachers to be clearer about the standards expected in the subject. I hope that we agree that it is fundamental that a greater emphasis is needed on knowledge and content in the current school curriculum, which is why we have launched a review of the national curriculum.
Mr Gibb
There are all kinds of reasons why the decline has happened. It could be, for example, because of the move to a more skills-based approach. History might be regarded as a tougher subject in which to achieve the grades that a school feels that it needs to achieve to maintain or increase its position in the school league tables. We have had a concern for a number of years about the move to what are called softer subjects in order to boost league table positions, and history could well have been a victim of that process.
The new national curriculum will be based on a body of essential knowledge that children should be expected to acquire in key subjects during the course of their school career. It will embody for all children their cultural and scientific inheritance, and it will enhance their understanding of the world around them and expose them to the best that has been thought and written. We are engaging with a wide range of academics, teachers and other interested parties to ensure that the new national curriculum compares favourably with those of the highest performing countries in the world.
Sir Bob Russell
As yet there has been no reference to the importance of local history being taught in our schools. How will that fit in, when schools are clearly being directed towards history that fits the exams?
Mr Gibb
Those are precisely the issues for consideration by the national curriculum review.
I know that my hon. Friend the Member for Kingswood would like history to be compulsory to 16, which is one of the things that the national curriculum review will consider. As I said at the outset, it is clear that some subjects, such as history, which all pupils should have a good grasp of, have been less popular choices at GCSE. The Government therefore want to encourage more children to take up history beyond the age of 14, particularly among disadvantaged pupils and certain ethnic groups. That is why we introduced the English baccalaureate, which will recognise the work of pupils who achieve an A* to C in maths, English, two sciences, a language and either history or geography, to encourage more widespread take-up of those core subjects, which provide a sound basis for academic progress.
The English baccalaureate has already had a significant impact on the take-up of history: according to a NatCen survey of nearly 700 schools, 39% of pupils sitting GCSEs in 2013 in the schools responding will be taking history GCSE, up eight percentage points and back to the 1995 level of history uptake. There are clear benefits to pupils in taking the subjects combined in the E-bac. Pupils who have achieved that combination of subjects have proved more likely to progress to A-level than those with similar attainment in different subjects in the past. They have also attempted a greater number of A-levels and achieved better results. We are also committed to restoring confidence in GCSEs as rigorous and valued qualifications. We will reform GCSEs to ensure that they are more keenly focused on essential knowledge in those key subjects, and with exams at the end of the course to support good teaching and in-depth study.
To refer to the questions of the hon. Member for Cardiff West (Kevin Brennan), what we want to achieve from the national curriculum review is a curriculum that is so good that the academies will want to adopt it, albeit not being compulsory. The national curriculum also does feed in to statutory testing, in maths and English at the end of key stage 2 and the GCSE specifications.
Kevin Brennan
Is the Minister considering writing into funding agreements the requirement that academy schools should teach the national curriculum?
Mr Gibb
No, that would obviate some of the freedoms and the whole essence of academy schools. The funding agreements require the teaching of maths, science and English to 16, thus making them compulsory, but the application of the national curriculum is not compulsory for academies, although it feeds into the specification that determines what is tested and assessed through the GCSE system. In that sense, there is an imperative for schools to teach those subjects.
The essence of the national curriculum review is to produce a curriculum that is on a par with the best in the world, based on evidence of what is taught in those jurisdictions that have the best education systems and against whom graduates from this country’s schools will be competing for jobs in the future. The national curriculum, which will be published and available to parents, will be of such a quality that it will become the norm and the benchmark against which parents will judge the quality of their schools.
Finally, I want to touch on the part that teachers play in our school systems as far as history is concerned.
Millennium Development Goals
(12 years, 10 months ago)
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Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I secured this debate because I am interested in finding out: what the Government are doing to help galvanise international action to secure a global development agreement for 2015 onwards; what they are doing to engage European Governments, not least through the upcoming EU budget negotiations; and their view of the process proposals and goal ideas in circulation at the moment.
I understand that a task team of senior technical experts from the United Nations Development Programme and the UN Department of Economic and Social Affairs have begun preparing work on the UN’s vision and road map for post-2015. Similarly, I understand that the UN Secretary-General is expected to appoint a high-level panel of eminent people to advise on the post-2015 framework, so the agenda is likely to gather momentum in New York. Next year, Britain will chair the G8. With the UN millennium review summit due in September 2013, which is arguably the key moment for agreeing a post millennium development goals agreement, UK Ministers will bear a heavy responsibility for progress—or a lack of progress—on achieving a post-MDGs accord. Thus far—I say this gently—there has been little sign from the Government of serious political leadership or engagement on the issue.
As the Government’s policies are putting a considerable squeeze on family incomes in the UK, and as Ministers are so obviously out of touch with the consequences, a debate about poverty in poor countries—and particularly about whether new targets for tackling poverty overseas are required—will seem to some people to be misplaced. However, tackling poverty in the world’s poorest countries is surely not just morally right, but fundamental to Britain’s long-term interests. We live in an interdependent world, and jobs in the UK, the level and types of disease in Britain, and migration patterns to the UK are all affected by what happens to the world’s poorest people. Indeed, the rise of the Taliban and their decision to shelter al-Qaeda in Afghanistan is a powerful example of what can happen when progress in tackling poverty is going in the wrong direction, when states are fragile, and when those for whom poverty is an irrelevance are what passes for being in charge.
The millennium development goals have been remarkably successful in galvanising political leaders, civil society organisations, parts of the private sector, trade unions and donors in the pursuit of tackling poverty. They were launched back in 2000 and are due to be achieved by 2015, and it is likely that the headline goal of halving extreme poverty will be achieved. There has been substantial progress in many countries towards achieving many of the individual goals.
Tony Cunningham (Workington) (Lab)
Does my hon. Friend agree that a key to those goals is education? It is difficult for young people in developing countries to get an education. It is more difficult for a girl, and almost impossible for disabled people. We must get to grips with the issue.
Mr Thomas
My hon. Friend is absolutely right, and I hope that the Minister will take advantage of his intervention to bring the House up to date with what the Government are doing to drive progress towards meeting the education millennium development goals.
Some countries have achieved all the millennium development goal targets, and others will have made significant progress by 2015. Clearly, not all countries will achieve all the goals, and some of the poorest—usually but not exclusively those that are, or have been, affected by conflict—are a long way from achieving them. Significant shortfalls remain in the delivery of international commitments to support the achievement of the goals. However, a joint report by the Overseas Development Institute and the Millennium Campaign on progress on the MDGs concluded that although it is not uniform across all countries,
“the rate of progress in reducing poverty and in increasing access to basic health, education, water, and other essential services is unparalleled in many countries’ histories.”
Britain undoubtedly played a significant role in galvanising the progress made towards meeting the MDGs through its ministerial support for, and engagement in, the process that saw the MDGs adopted. It maintained pressure for progress up to and beyond the 2005 G8 summit at Gleneagles, and in the UN General Assembly discussions in 2008 and 2009. That support has continued in more recent years, and I acknowledge the role that the Minister and his colleagues have played while in office.
Britain played a crucial role in keeping European aid directed at achievement of the millennium development goals, with the European development framework clearly targeted at the needs of the poorest.
Chris White (Warwick and Leamington) (Con)
I congratulate the hon. Gentleman on securing this debate. In the spirit of co-operation that he has shown in his work with me on my private Member’s Bill, does he agree that four years is a very short time in international politics, and that it is crucial that the UK starts to lead the debate on the formation of post-2015 goals for global development, and particularly on putting more emphasis on millennium development goal 8?
Jim Sheridan (in the Chair)
Order. That is a long intervention. Does the hon. Gentleman have a question?
Chris White
Does the hon. Member for Harrow West (Mr Thomas) agree that particular attention should be paid to goal 8, which is specifically about creating better governance so that we maximise the impact of aid spending and ensure that the gains that we make are not undermined by poor planning and corruption?
Mr Thomas
I agree with the hon. Gentleman. Governance is crucial, and I believe strongly that it needs to be part of a post-MDGs framework. The key question for this debate is what comes after the millennium development goals, from 2015 onwards. Where do Ministers stand on that agenda? Do they support the UN Secretary-General’s ambition for a new generation of sustainable development goals, and if they do, what action are they taking to make such an agenda happen?
The Minister will be cautious, understandably, about saying today what should be included among a new set of international goals, but Ministers could help to galvanise the process of agreeing an accord by supporting and encouraging international debate on what a post-MDGs agenda might look like. To date, we have heard remarkably little from the Secretary of State on this issue. Has a policy team of civil servants been set up within the Department to corral ideas, and to engage with those in civil society, the UN and other national Governments, particularly in Europe, to drive the UK’s involvement in the preparation of such an agenda?
Elsewhere in the UK, among the Catholic Fund for Overseas Development, the Overseas Development Institute, the Institute for Development Studies, Christian Aid, and the Beyond 2015 coalition of non-governmental organisations, there has been real interest in the question. Indeed, the Beyond 2015 coalition has published an interesting and thoughtful set of essential must-haves for a new global development framework, focusing on how a process might work and stressing the importance of the MDGs review summit next year, and the Rio plus 20 process in June this year. That interest in UK civil society is mirrored by a growing interest throughout civil society in developing countries.
Both CAFOD and the excellent Overseas Development Institute have noted how significant the “how” will be in reaching an agreement, and the importance of “what”—that is, what such an agreement should contain. I would welcome hearing how the Minister thinks an agreement could be reached, and what he plans to do to assist.
Civil society interest is clearly key in framing debate, and in involving those in developing countries and developed countries, but Governments must reach agreement. Vital to that is active dialogue within Government, between Governments and their civil society groups and, crucially, at intergovernmental level. That is where the British Government could do more. Although in recent years the G20 has become more prominent, discussions between G8 leaders still matter hugely. Britain will chair the G8 next year in the run-up to the review summit, and it could put a post-MDGs agreement at the centre of the debate between the richest nations in the world.
International negotiations require considerable time and effort, and they make progress only when leaders and national politicians are engaged. A G8-driven agenda to replace MDGs is likely to stir up scepticism and concern, so any agreement must be—and I believe will be—UN-led. It would, however, be a mistake to think that an agreement will be reached without the richest nations on board. As a result of its record and its forthcoming role, Britain is uniquely placed in the G8 to support the UN more visibly in working towards a post-MDGs accord.
There have been a series of initiatives to consider the post-2015 framework. Early suggestions included the roll-over of existing MDGs to 2020 or 2025, or an “MDG plus” agreement that could take some existing core goals in education, health or nutrition, and add three or four new, locally defined, goals. The so-called one world approach would have new goals based on issues such as resilience and climate change. More recent proposals include a gross national happiness index, such as that currently used by Bhutan, for measuring national progress; the UN General Assembly has expressed qualified interest in that. Measuring happiness has begun to be of interest in the UK and in France, and in a series of state governments in the US. A Sri Lankan economist has proposed a series of consumption goals to target under-consumption by the poorest countries and over-consumption in richer countries. The Colombian Government have proposed a series of sustainable development goals that I understand also have the support of Brazil. Those are due to be discussed at the forthcoming Rio plus 20 meeting in June, and focus on addressing global climate change and development. I would be interested to know what the Minister thinks about those ideas.
The Overseas Development Institute has suggested three principles for a new post-MDGs agreement. First, the principle of universality and inclusiveness goes with the grain of existing anti-poverty measures in developing countries such as Mexico, Kenya or Sierra Leone that deal with social protection, education and health care. Such measures create minimum standards of provision that are now within range of many more developing countries than was the case when the MDGs were originally conceived.
The ODI’s second principle is that of building resilience and reducing vulnerability. That could provide a focus for the use of renewed G8 and G20 development interest in growth and infrastructure to help tackle inequality and address issues such as capital flight and tax avoidance, as well as other critical environmental issues such as climate change, which reduce a community’s resilience and increase vulnerability. Finally, the ODI suggests a principle of building national economies—a key concern of Governments in developing countries, and one that increasingly reflects debate in many developed countries about what should be the priorities for overseas aid.
Perhaps the most interesting specific proposals come from the International Committee of the Red Cross and the Centre for International Governance Innovation. They have proposed 12 new goals that seek to build on existing MDGs while reflecting the changed international context, and they include new methods for devising targets and accounting for progress. As well as arguing for the inclusion of further indicators to improve the living standards of the poor, reduce diseases, eradicate hunger and ensure access to safe water supplies, they also suggest new indicators concerning access to and quality of education—that point will be of interest to my hon. Friend the Member for Workington (Tony Cunningham). They urge a new focus on the reduction of violence, particularly against women and children, the promotion of gender equality, and better access to basic infrastructure, such as energy, information and financial services. They also support indicators of environmental sustainability, access to justice, trade rules and the transparency of Government budgets—that will be of interest to the hon. Member for Warwick and Leamington (Chris White).
At the moment, that list contains too many suggestions to achieve the simplicity that has helped to drive the continuing appeal of the MDGs, and there is perhaps not enough focus on job creation and growth. In my view, however, the proposals merit further serious debate and attention, and in that spirit, I commend them to the House.
Time is ticking, and a new post-MDGs agreement would be a huge prize, with regard to our efforts to tackle global poverty and improve sustainability. Britain could—and I believe should—once again occupy a pivotal place in the debates, and I look forward to hearing the Minister’s plans to achieve that goal.
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)
I thank the hon. Member for Harrow West (Mr Thomas) for securing this debate on an important topic. Securing global agreement on a framework that updates the millennium development goals is a major priority for the coalition Government and the Secretary of State for International Development. We are now in 2012, and I welcome the chance to begin talking more openly about the key leadership role that the UK is playing—and will continue to play—on that agenda. Just as MDGs are at the heart of Government development policy, a successor framework should be central to all that we do, which means shaping it to ensure that any future global agreement reflects what we know about achieving results in the fight against global poverty. As one of the leading countries on development issues and with the legitimacy that comes from the coalition Government’s commitment to spend 0.7% of gross national income on overseas development from 2013, the UK will play a leading role.
The MDGs set a benchmark for global development policy, and over the past decade they have helped to galvanise efforts to improve the lives of millions of the world’s poorest people. The coalition has augmented and built on the previous Government’s commitment to put the achievement of MDGs at the centre of the UK’s development efforts.
Tony Cunningham
We have spoken a lot about international dialogue and my hon. Friend the Member for Harrow West (Mr Thomas) mentioned the G8 and G20. Will the Minister touch on our relationship with Europe and the European Union? Europe has a key role to play and the dialogue between the UK and the European Union will be crucially important.
Mr O'Brien
I do not plan to talk about Europe on the basis that the hon. Member for Harrow West—quite rightly—focused the debate on the UN. This is an international issue. There will, of course, be continuing discussions vis-à-vis Europe, but the primary focus must be on the UN and driven by the broad international community, not least because of the focus on moving to the post-MDG world and the emerging powers and other bodies that can be brought into a greater international political consensus to help in the battle against poverty.
The coalition is making every effort to accelerate progress with the current set of eight MDGs and particularly with those most off track. The UK’s aid effort has been designed, particularly over the past 18 months, to deliver the following key results by 2015, the first of which is to secure schooling for 11 million children—more than we educate in the UK but at 2.5% of the cost. That aim is particularly important for girls, as noted by the hon. Member for Workington. Other aims include vaccinating more children against preventable diseases than there are people in the whole of England; providing access to safe drinking water and improved sanitation to more people than live in Scotland, Wales and Northern Ireland; saving the lives of 50,000 women in pregnancy and childbirth; stopping 250,000 newborn babies from dying needlessly; and helping 10 million more women get access to modern family planning.
Mr O'Brien
I will not give way, as I want to make some progress and there is a lot to get through.
Tremendous progress with MDGs has been made globally. As my right hon. Friend the Secretary of State for International Development and the USA’s Raj Shah showed in the MDG countdown event at the UN last September, countries such as Brazil, Zambia, Peru and Nepal have demonstrated how political commitment, good policies and targeted resources can make a real difference to the lives of the poorest people.
Over the next four years, we will continue to showcase and celebrate the successes that have been achieved. Of course, that is very important in building and maintaining broad public confidence and consent. However, in 2015, millions of people around the world will still be living in conditions of extreme poverty. It is important that we do not lose the momentum created by the MDGs: 2015 will be the moment to update the framework, building on the success of the current one, so that it can reflect the new challenges and opportunities that we face in a world that has changed dramatically since 2000. The process of building global consensus on that updated framework is starting now.
The MDGs have played an important role in generating global political consensus on development and worked well as a communication and advocacy tool, both with the UK public and internationally. The framework, with its tightly focused set of targets and indicators, has also helped to strengthen the availability of data in developing countries and thereby made it easier to put a greater focus on results. However, the MDG framework has had its limitations.
A number of critical themes and issues were not included—the importance of economic growth or conflict and fragility, for instance. There are concerns that in some cases the poorest and most vulnerable have been neglected and not even explicitly referred to or focused on. An example is people with disabilities—another point mentioned by the hon. Member for Workington. There are concerns that the plight of the poorest and most vulnerable has often been masked by the average success rates in countries where progress has been very uneven.
Ownership of the MDGs at country level has been patchy and has not always been closely linked to a country’s own plans and objectives. In some cases, the framework has also created perverse incentives. For example, it has incentivised a focus on measuring school attendance, rather than the quality of education or retention of students in education. It has also made it more difficult to deal with critical problems that are best tackled multi-sectorally.
An updated framework will need to deal with the weaknesses, while capitalising on the strengths of the current MDGs, ensuring that we retain the simplicity of the current goals, intensifying the political imperative to focus on poverty reduction and building on the progress achieved so far. An updated framework needs to reflect the new global context. Of course, the world has changed since the original MDGs were created: it is no longer as easy to divide the world into countries that we would classify as either developed or developing. India alone has more poor people than all of sub-Saharan Africa, but India faces rich-world and poor-world problems at the same time.
An updated framework will need to resonate with the Governments and citizens of emerging powers such as India, as well as dealing with the needs of low-income countries. Moreover, in parts of the world, aid is likely to become a much smaller share of external financing for development in the future. As aid dependence falls in certain countries, a development framework that focuses mainly on targeting aid will be less relevant.
The principles for an updated framework are fourfold, so people are not being quite as cautious as the hon. Member for Harrow West feared. Four principles seem to be emerging from the discussions about post-MDGs. The Secretary of State is considering whether those principles would help to take forward the revision of the framework. I can confirm that we have already set up a team of officials in the Department for International Development’s policy division. That involves the most senior officials. Ministers are already having regular discussions with international counterparts on the post-MDG question.
The first principle is that the process to agree an updated framework needs to involve new powers and engage citizens, especially those who are most vulnerable and marginalised. Last time, the OECD-led process meant that ownership at country level was weaker than it should have been.
Secondly, there is a need to retain a simple set of global goals, but to enable greater ownership and accountability at national level, allowing nationally defined indicators and targets. National targets should still link into a global agenda that enables us to get a sense of overall progress.
To pick up one of the ODI points referred to, the third principle is universality. There is a strong view that, after 2015, we will need goals that resonate with the aspirations and challenges of citizens in emerging powers and OECD countries, as well as those in poor countries. However, there is also the view that we need to seek universal outcomes to ensure that the poorest and most vulnerable are not neglected and, indeed, that inclusiveness applies.
Fourthly, an updated framework must incentivise action beyond aid. Goals should recognise that we are talking not only about aid transfers, but about all financial flows, including domestic public and private revenues—a framework that incentivises better resource allocation and helps to measure results. That is vital to the points on governance and anti-corruption measures that my hon. Friend the Member for Warwick and Leamington (Chris White) rightfully highlighted. It is a useful point to make that the international Open Government Partnership, which the UK is chairing with Brazil, will provide opportunities to build alliances to ensure that governance and transparency are incentivised as part of the successor framework to the MDGs.
The discussions about what should happen to the MDGs after 2015 are getting going on the international stage. We are in the early stages of the process, but the coalition Government are already actively engaging with old and new partners to shape the debate. Thanks to the all-party consensus on the 0.7% and the UK’s broader credibility and status on development issues, we have the potential to play a critical leadership role on this agenda internationally.
The Secretary of State has spoken to the UN Secretary-General, indicating our readiness to continue to play a leadership role. The Rio plus 20 sustainable development conference in June will provide a key occasion for the UK to further the debate. We are seeking opportunities on every occasion to develop consensus on a post-MDG framework. We are doing that with others in the UN and the G8, with other Governments, with foundations and with the private sector.
Mr Thomas
I specifically asked the Minister what discussions he has had with colleagues in Europe. Let me ask him even more specifically whether European International Development Ministers, at the regular formal meetings that take place, have discussed the post-MDGs summit and whether a British Minister from the Department for International Development will go to Rio plus 20. One would expect someone from the Department of Energy and Climate Change to go, but surely a Minister from DFID should attend as well.
Mr O’Brien
Of course, discussions have been happening both at the formal level and in the informal like-minded group—the hon. Gentleman will be aware that those are also very important meetings. They are broad discussions, but in relation to establishing the principles for the post-MDG framework, the primary focus has been on the more international, UN-driven bodies. Of course, he is right to identify—to some degree, this answers the point raised by the hon. Member for Workington—that discussions are going on around Europe, but as yet it has not become a critical focus. It is something that we are trying to lead and push on, as we have those various meetings.
Particularly with regard to the UN, it is important to recognise that the discussions are held with other bilaterals, groups of countries and key Governments such as Brazil to ensure that the interest in the sustainable development goals, to which the hon. Member for Harrow West referred, and the post-MDG agenda are brought together. That is a cross-Government agenda involving DFID, the Department for Environment, Food and Rural Affairs and the Foreign and Commonwealth Office. Given that cross-Government basis, the hon. Gentleman is quite right: of course there will be ministerial attendance at Rio. I am not in a position at the moment to confirm which of the Ministers will attend—that would be premature—but I can certainly assure the hon. Gentleman that the matter is being given the very high importance that he would expect.
We hope that there will be broader engagement by all interested parties, the UK public, the private sector and others to help us to define the agenda for international development for the next generation, not least because the MDGs were very useful in setting not just the advocacy but the aspirational drivers that supported it politically.
The four principles that I articulated, which are the key to ensuring that the post-MDGs are framed in the correct way, are the ones that the Secretary of State in particular and personally is taking forward. Those principles are that the updated framework on development needs to be legitimate, that it needs to balance better the relationship between the global and the national, that there needs to be universality and inclusiveness and that the updated framework must incentivise action that will be owned at country level.
I am thinking about the example that the hon. Member for Workington gave about education. Looking at education in relation to the post-MDGs, we will want to build on the dramatic progress on enrolment, but also to shift the focus on to incentivising learning outcomes. This is not just about retention and particularly getting girls into school and enabling them to sustain their education to secondary level, but about ensuring the quality of education and the attendance of the teachers and ensuring that that is sustained throughout. I do not know whether the hon. Member for Workington would like to make a short intervention now; there is about two seconds to go.
Tony Cunningham
I wanted the Minister to deal with the issue of disabled children; that was all.
Mr O’Brien
I covered the disablement point, which was one of the few notable absences in the original drafting of the MDGs. I hope that that can be rectified in the post-MDG framework, with a focus on the most vulnerable and the poorest. All of us who have travelled around various countries in the poorest parts of the world will know that one of the hidden but great concerns relates to the access to services that disabled children have.
School Transport
(12 years, 10 months ago)
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Nicky Morgan (Loughborough) (Con)
It is a pleasure to lead today’s debate under your chairmanship, Mr Sheridan. After my question to the Minister in November on school transport, I am sure that he was not entirely surprised to see my name associated with the topic today, and I am pleased that he is here to answer this afternoon’s debate.
If all politics is local, nowhere does that seem to be more true than on the vexed issue of home-to-school transport. My interest in school transport policy arises from the decision of Leicestershire county council on the provision of a bus service to take pupils from the village of Sileby to Humphrey Perkins school in Barrow upon Soar in my constituency. A smaller number of families in Mountsorrel are also affected, but I will particularly focus on Sileby today. The objection in my case arises from the council’s view that the proposed walking route from Sileby to Barrow is safe and the strongly held view of almost everyone else that it is not.
Before I dwell on local matters, I feel duty bound to explore why the Minister and the Department for Education should have an interest in the subject despite the fact that the assessment of walking routes and decisions about the provision of home-to-school transport and on appeals made by affected families are all matters for local authorities. I firmly believe in localism and that local authorities and elected local members should make decisions about school transport routes—as long as they are made fairly and transparently.
National legislation, namely the Education Act 1996, as amended, governs the duties and powers of local authorities in England to provide home-to-school transport. In addition, case law on school transport and “Home to School Travel and Transport Guidance”, published by the then Department for Education and Skills in 2007, contains detailed guidance on the provision of school transport. In March 2011, the Department for Education commissioned a review of efficiency and practice in the procurement, planning and provision of school transport across England. Section 509 of the 1996 Act states:
“A local education authority shall make such arrangements for the provision of transport and otherwise as they consider necessary, or as the Secretary of State may direct, for the purpose of facilitating the attendance of persons not of sixth form age receiving education…at schools”.
The 1986 case of Rogers v. Essex County Council was one of the most significant brought in recent years on available walking routes. In its ruling, the House of Lords stated that for a route to be available within the meaning of the 1996 Act, it must be a route
“along which a child accompanied as necessary can walk and walk with reasonable safety to school”.
A route does not fail to qualify as “available” because of dangers that would arise if the child remained unaccompanied, but the Court also held that a route is available even if the child would need to be accompanied along the route, as long as it is reasonably practicable for the child to be accompanied. Local education authorities can therefore take into account parents’ capacity to accompany their child. Following that judgment, the law was changed so that in considering whether a local education authority is required to make arrangements in relation to a particular pupil, it shall have regard to, among other things, the age of the pupil and the nature of the route or alternative routes that they could reasonably be expected to take.
Hon. Members must forgive me, because I am afraid that I am showing my background as a lawyer, but the history is helpful. In George v. Devon county council 1988, the High Court took the view that
“For an ordinary child whose home is within walking distance, but who applies under”
the relevant section
“a local education authority should consider: the age of the child and the nature of the route which he could reasonably be expected to take; the question should the child be accompanied on the route or alternative routes? If the answer is ‘no’, then normally there”
is
“no case for free transport. If the answer is ‘yes’, then”
the next question is
“whether the nature of the route or alternative routes is dangerous for the child if accompanied. If the answer is ‘yes’, then normally there would be a case for free transport. If the answer is ‘no’, then: the question”
is
“whether it is reasonably practicable for the child to be accompanied. If the answer is ‘no’, then normally there would be a case for free transport.”
Consequently, local education authorities must consider section 509, together with the various legal rulings, in defining their policies on the provision of school transport and the eligibility of individual pupils for free transport. Pupils, parents and families are encouraged to turn to the Directgov website for views on national policy. It states on its home-to-school transport page that
“Safe walking routes are those which usually include road crossings, good lighting and well maintained pavements and footpaths. LAs are required to assess the suitability of walking routes.”
Having set out the national policy background, I will turn to my local issue. Leicestershire county council stated its view on the Directgov approach in a letter to me dated 20 July 2011 from the assistant director of transport:
“‘Safe’ is a very absolute term and it is not possible to guarantee that anything is absolutely safe, so it is an unreasonable stipulation. The law requires that a walking route be ‘available’ for a child accompanied as necessary by a responsible adult and it is this criterion that we apply.”
As I have mentioned, however, a route also has to be reasonably safe, and therefore the dangers of a particular route should be taken into account.
In February 2011, a Leicestershire county council scrutiny review panel reported to the council’s cabinet on the council’s home-to-school transport policy. The panel was asked to consider, first, how available walking routes are assessed and the appropriateness of the current method of assessment, and, secondly, what are known in Leicestershire as “historic exceptions” and whether such services are still justified. Historic exceptions are bus services provided free to children despite the route length being under the statutory distance and despite a route having subsequently been assessed as available for children to walk. Children using services on those historic exception routes will continue to receive free transport until September 2012. The Sileby to Barrow route is not an historic exception.
Andrew Bridgen (North West Leicestershire) (Con)
I thank my hon. Friend and neighbour for securing the debate on school transport, which is also a major issue in my constituency. Does she agree that under current guidelines common sense sometimes appears to go out of the window? In my constituency, there have been instances of older children retaining free bus passes, while younger children in the same household are asked to walk to school. Does she appreciate how frustrating it can be when a household is judged to be outside the three-mile limit and gets free bus travel, but the next-door neighbour is judged to be within the limit and their children are asked to walk to school? Surely we need discretion and common sense in such cases.
Nicky Morgan
I entirely agree with my hon. Friend. Common sense has been lost as part of the debate and in reviewing the routes. I have exactly the same situation in Mountsorrel, where apparently older children already at the Humphrey Perkins school will continue to receive free bus passes and younger children starting at the school will not.
In undertaking the review, the scrutiny review panel was asked to have regard to the financial, environmental and health implications of any proposed changes to existing policies in the context of the legal obligations placed on the county council. The overall review was conducted as part of the council’s medium-term financial strategy. The panel did not consider the Sileby to Barrow route and nobody with an interest in the route, such as the headmaster, the families or local councillors, was asked to give evidence to the panel. In reaching its conclusions, the panel decided that the width of a footpath and the lighting of a route did not need to be considered when a route is assessed, which is where common sense has gone out of the window.
In May 2011, parents of pupils in Sileby and Mountsorrel due to start at Humphrey Perkins school in September 2011 were written to and told that free school transport would be available for their child. Imagine their surprise, and the surprise of the head teacher, who also knew nothing about this, when in late June last year they and the families of children already receiving free transport, because the route was deemed to be unavailable, received a letter saying that that would no longer be the case and that because they lived less than three miles from the school and there would now be an available walking route, they would not be eligible for free transport and instead would have to pay for a school bus service. It was at that point that a campaign group was formed and I was made aware of the problems that the 53 parents in Sileby face.
Annette Brooke (Mid Dorset and North Poole) (LD)
I congratulate the hon. Lady on securing the debate. We have many problems in Dorset, and I want briefly to share some similar stories. I consider age to be a vital factor, in so far as a 13-year-old would not wish to be accompanied, so it is not a matter of the availability of somebody to accompany them. A rural lane with fast traffic is incredibly unsafe. I hope that she will expand on the point that notifying parents at the last possible moment or halfway through a sixth-form course, given that a choice will have been based on previous information, is unacceptable.
Nicky Morgan
I entirely agree with my hon. Friend and congratulate her on the early-day motion on the topic, which has been signed by hon. Members from across the House. She is right that the safety of routes has not been considered and another frustrating point is the manner in which notifications have been sent out.
As I have said, a campaign group was formed in Sileby. To cut a long story short, the council admitted shortly afterwards that insufficient notice of the change had been given. The decision to withdraw transport was postponed for a term, and I was promised that a new assessment of the route would be conducted once the clocks had gone back in the autumn.
Why do we all consider the route to be dangerous? My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) has mentioned some of the dangers of such routes, but much of the Sileby to Barrow route has a footpath on only one side of the road, so that children—and adults—returning from school have their back to oncoming traffic. The footpath is narrow and there are several pinch points where everyone has to walk in single file—we are talking about 11-year-old children not messing about on the way to and from school. The speed limit along the road is 40 mph, and it is regularly exceeded. There are industrial estates, a deep ditch and a conveyor belt for a nearby quarry. The road is also so narrow at points that if two large vehicles pass each other the wing mirrors overhang into the footpath at head height.
Alas, the promise to wait for the next assessment to be conducted after British summer time ended and before any further decisions were taken was not fulfilled, and parents received further letters in October to say that as the necessary cutting back of vegetation had now happened along the walking route the free bus service would no longer be offered to them from this month. Meanwhile, despite my urging the county council to work with the school to examine alternative services, no contact was made with the headmaster between July and late October 2011. The council has since then had contact with the school about an alternative service, but that would be at almost double the cost of the service now procured by the headmaster. The council has also indicated that, when the school becomes an academy, home-to-school transport will no longer be its concern. I hope that the Minister can address that point. On a practical level, today, on the second day of term, the service for children living less than three miles from the school has been withdrawn, and some will now be using the train to get from Sileby to Barrow. I expect that others will be driven to school, which will increase congestion, and some will walk that route.
The walking route that some children will have to use remains, in my opinion, highly dangerous and therefore not “available” as the legislation requires, because even an accompanied child cannot walk along it with reasonable safety. The real question for us, as a national legislature, is whether the national legislation and guidance reflects the realities of modern Britain, or whether the safety of our children is at risk, when a route can be deemed to be available when it is clearly unsafe.
Priti Patel (Witham) (Con)
Does my hon. Friend agree, having touched on the safety of children going to school, that parents of children with special educational needs, in particular, are deeply worried? A case of mine concerns Melanie Green, whose 7-year-old son Aaron Green is given no support in going to school. I would welcome it if the Minister were to look at that case. In modern Britain, with our children’s changing needs, the area in question is one that must be considered thoroughly. Local authorities in particular must pay more attention to it.
Nicky Morgan
I entirely agree. I am sure that the Minister has heard and will hear representations about the particular case that my hon. Friend has mentioned. She is right about the need to return to a common-sense approach and consider the needs of individual families, whether it is the parents or pupils who are affected. There are parents with disabilities who cannot accompany their children to school, because they just do not have the physical ability to do so, yet somehow they are deemed to be able to accompany their children. This is a huge issue for many hon. Members, across the House, and I am glad to have the opportunity to allow them to express their frustrations and views today.
George Freeman (Mid Norfolk) (Con)
Does my hon. Friend agree that at the heart of the question is the issue of one size not fitting all, and legislation not working in rural areas in the same way that it does in urban ones? In cities, many of us will have seen happy gangs of schoolchildren walking and cycling safely to school in a morning. In rural areas, increasingly both members of couples are working, and at rush hour families who commute are affected by the cost of fuel and the higher speed of traffic. There is much more traffic on rural roads, and many people in mid-Norfolk live more than two or three miles from a local school. School rush hour in rural areas is a real problem. Norfolk now provides 24,000 free journeys a day, which has been described as the tip of the iceberg. That is a problem across rural areas, and I urge the Minister to see whether the criteria can be reviewed to take account of the important change that has taken place in the past 40 years.
Nicky Morgan
My hon. Friend is right. He is concerned for parents, I am sure, across the country, but rural areas are particularly badly hit. My constituency example involves two villages and the route between them, which is rural and unlit. I shall discuss working hours as well, and I am sure that the Minister has taken my hon. Friend’s comments on board.
As I mentioned at the start of the debate, the Leicestershire county council test is that
“a route is available if it is a route which a child, accompanied as necessary, can walk with reasonable safety to school.”
We have talked about the reasonable safety point, and I will not labour it, in view of the time, but I want to deal with the question of the child being accompanied. To assume that children will be accompanied is surely to ignore the reality of much of family life—many parents now work—and the way in which the school day interacts with the working day. To walk three or more miles to a school will take an adult at least 45 minutes. When I walked the Sileby to Barrow route with the head teacher, the local PCSO, a parent, the leader of the county council and local councillors, it took us more than an hour, and we had no children with us. The policy therefore assumes that the relevant adult has between three and four hours spare walking time a day to accompany the child. Clearly that is totally unachievable.
My example in Leicestershire is not an isolated one. The Campaign for Better Transport has revealed that 38% of councils are reviewing or cutting transport to faith schools, and 46% are reviewing or cutting transport to schools other than faith schools. I fully understand the need to make savings in light of the appalling economic legacy left by the previous Government and the tough choices that that means for our local authorities, but there are some changes in services that have potentially devastating consequences.
I want to ask the Minister to address the following points: first, will he update the Chamber on the progress made on his Department’s review of efficiency and practice in the procurement, planning and provision of school transport across England? Depending on the stage that has been reached, will the review team consider how the safety of travelling children is being assessed by councils?
Secondly, will the Minister, perhaps in conjunction with the Department for Communities and Local Government, consider whether there is scope for issuing advice or guidance on how local authorities should handle decision making around the withdrawal of transport services? In particular, I think there should be advance consultation requirements, minimum notice periods and an obligation on local authorities to work with schools and colleges in relation to the provision of alternative services before services are withdrawn or fundamentally changed.
Thirdly, what is the position of those schools that become academies? Does conversion mean that an LEA is relieved of all its obligations in relation to home-to-school transport?
Finally, will the Minister, perhaps as part of his consideration of the responses to the review, consider whether the time has come for a clearer statutory test on whether a route is or is not available? In particular, is it time to drop the assumption that children will be accompanied, and should not child safety be considered above all other factors when considering whether a walking route is now available?
I am grateful to all the hon. Members who have attended today for their attention and for their support.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
I have barely 12 minutes in which to take up all those questions, and I have a horrible feeling that I am not going to finish what is a fairly long and technical speech. If that happens, I shall give my unsaid comments to my hon. Friend the Member for Loughborough (Nicky Morgan). I congratulate her on bringing this important subject to the Chamber. I agree with all the considerations that she raises. She made some important points, and I pay tribute to the way that she has rolled up her sleeves and seen the situation in her constituency, as a good MP should.
Other hon. Members presented their points well. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) described the inconsistencies over the three-mile limit and different treatment of people in the same family and said that common sense was required. That is a fair point.
The point about late notification made by the hon. Member for Mid Dorset and North Poole (Annette Brooke) is particularly relevant. I have come across that problem in my constituency, when parents have been told at the very end of term that, from the following term, the bus will not be available. We must do a lot better on that front.
My hon. Friend the Member for Witham (Priti Patel) mentioned considerations about special educational needs, which I shall discuss if I have time. We need greater flexibility there. There are examples of local authorities that will pay or subsidise parents, where they can, to provide the transport for those children themselves, rather than using expensive chaperoned taxis or school buses. Certainly flexibility is a requirement with SEN.
My hon. Friend the Member for Mid Norfolk (George Freeman) also talked about considerations in rural constituencies in particular and the one-size-fits-all approach, which clearly will not work. We must ensure that we have a school transport system that reflects people’s lifestyles in the 21st century, as well as changes in education and educational establishments.
By saying all that, I have eaten into my time. My hon. Friend the Member for Loughborough has asked for clarity on four key points, and I will endeavour to provide that during my response. I agree with the broad thrust of her remarks. First, school transport is one of those areas where local decisions really do affect local people, and it should not be for Whitehall to dictate such decisions.
Secondly, in my position as Minister for Children, I hear from parents that the safety of their children is one of their paramount concerns. I have been holding discussions with my colleagues from the Department for Transport, particularly with the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), because we have a joint interest in this matter. This is clearly an area in which more work needs to be done, and this debate will be a useful addition to the wider discussion. I shall include hon. Members who are present today and others in the work that we will undertake in the coming weeks and months.
Thirdly, local authorities are having to make difficult decisions and to prioritise the services that they provide, but that cannot and should not be at the cost of the safety of children and young people.
In responding to my hon. Friend’s points, I intend to set out the legal basis for home-to-school transport, including the status of guidance available from Government. I want to give details on how it is funded, what routes of redress are available to parents and others and briefly to update the rather slow progress of the review of efficiency and practice commissioned by the Department.
We are debating the Government’s policy on home-to-school transport. Like many areas of education policy that we have inherited, this policy has grown over the past 20 years into a bureaucratic, costly source of frustration for many parents. Local authorities are now spending well in excess of £1 billion a year, yet some are not able to say exactly how many pupils they support or whether that support is meeting the needs of the children who need it most.
As communities have grown and evolved, the links between schools, transport and communities have, if anything, become more fragmented. yet I do not wish to paint too bleak a picture. Some authorities have risen above the challenges and are making savings to their budgets, but without the fuss and furore described by my hon. Friend and other colleagues in the Chamber today. The East Riding of Yorkshire, a predominantly rural authority, has developed an in-house software system combined with Ordnance Survey’s geographical information system to review the efficiency of all its bus routes. The resulting efficiencies arising from the planning and rerouting of a number of existing services, over three years, led to more than £1 million of savings.
The Department decided to start a review to identify and promulgate those very learning points from and for local authorities. Before launching the external review, officials from the Department undertook a review of the legal position to examine whether it required any amendment. The coalition has at its heart an ambition to reduce the inequalities in attainment that we still see in our education system. Too many young people’s destiny is governed by their family background and too few quality places are available to all parents. Only when every school is a good school can parents feel that they have a real choice from which to express a preference. Obviously, school choice is relevant to the transport issue, especially for people who do not live in urban areas.
Increasing the supply of good places is paramount to the coalition, which is why we have expanded the academies’ programme and established the free schools programme, with the first 24 schools now operational. The theory is quite simple: rather than bus the child to the school, bring the school to the child, and give parents and teachers the power to establish a school in their community and reduce the reliance on transport as far as possible. With that rather simple mantra, we concluded that the current legislative basis, while not perfect, is sufficient to meet the Government’s policy ambitions. Our decision was further strengthened by the experience in Northern Ireland, where changes such as revising the statutory walking distances were considered but not proceeded with on the basis that they would have significant funding implications—communications, assessments and so on. Given our economic situation, we were not willing to commit to such a cost.
The legal basis of school transport remains unchanged. Local authorities must provide free home-to-school transport where a child is attending a school beyond the statutory walking distances of two miles for pupils below the age of eight and three miles for those aged eight and over and no suitable arrangements have been made by the local authority for the child to attend a school closer to their home.
The Education and Inspections Act 2006 amended the legislative framework by inserting a number of transport provisions into the Education Act 1996. Of relevance for today’s debate are sections 508B and 508C and schedule 35B of the Act. Section 508B places a duty on local authorities to provide transport for eligible children. Eligible children are defined in schedule 35B. They include those children who are unable to walk to school because of their special educational needs, mobility problems or where they cannot reasonably be expected to walk because the nature of the route. Certain children from low-income families are also eligible under schedule 35B. Such provisions are often referred to as the extended rights.
Section 508C of the Education Act 1996 provides local authorities with discretionary powers to make travel arrangements for those not covered in 508B and make financial provision, in full or in part, for travel under such arrangements. Those provisions apply irrespective of whether the school the child attends is a maintained school, a foundation school, or as my hon. Friend has asked, an academy.
I have told hon. Members that my contribution would be technical, so I will have to continue at this pace. How is this duty funded? Without going into copious details, local authority transport duties are funded through a combination of revenue support grant and local generated council tax. In respect of the extended rights, the Secretary of State for Education provides an additional funding stream which for 2011-12 and 2012-13 amounts to £85 million. As this funding is not ring-fenced, it allows local authorities to work with their communities and set their priorities accordingly.
As my hon. Friend has stated, local authorities have already begun to tackle their spending. However, not all have approached it in the same methodological manner, and I have had a number of letters from concerned families who say that bus routes have been changed or cut and that they have to find, in relative terms, quite significant sums of money. Many decisions are driven solely by financial constraints, but there are examples where the local authority has saved money, managed the communications well and established a sustainable process for future changes. Departmental officials are now working hard to finalise the report and shine a light on those case studies. It is clear from the review that local authorities must make savings and can do so without the effects on provision that many of us have seen and heard about.
Leicestershire’s allocations were £640,000 in 2011-12 and £795,000 this year. Those are not insignificant sums. I am aware that in some authorities this non-ring-fenced funding is proving to be generous, and having met their statutory responsibilities, some authorities are using their discretion in how they meet any demands that they face. That has included making transport arrangements for children who are not entitled to free transport.
I also want to set out the legal basis in respect of safety. I want it to be clear that responsibility for road safety, even in school transport, actually rests with my ministerial colleagues at the Department for Transport. We are as one in our determination to make our roads as safe as possible, while ensuring that common sense is applied. There is a statutory duty on local authorities to ensure that suitable travel arrangements are made for eligible children for the purpose of facilitating their attendance at school. We are quite clear in our statutory guidance that local authorities are under a duty to make travel arrangements where the nature of the route is such that children cannot walk along it in reasonable safety—accompanied as necessary—where the distance is within the statutory walking limit.
In assessing route availability, authorities are obliged to conduct an assessment of the risks that children may encounter on the route. They include the volume and speed of traffic along roads, overhanging trees or branches and ditches, rivers and so on. The age of the children must also be considered and any assessment should take place at the time of day that children are expected to use the route. That is common sense, but it does not always happen. Many local authorities follow the guidelines provided by Road Safety GB, which is the national organisation that represents local government road safety teams across the UK and works with them in fulfilling their statutory role.
While ensuring that children remain safe, local authorities should, quite properly, take advantage of improved measuring technology and route availability that takes into account new building and infrastructure developments, in identifying new and suitable walking routes where previously there was no right of way. That is where the use of new technology, such as the public sector mapping agreement, which provides authorities with free digital geographic mapping data, has resulted in authorities being able to plan more efficient walking and school bus routes. That has led to significant efficiency savings without authorities having to withdraw services. The draft report will recommend better use of freely available public sector data to build a picture of service provision and use.
The processes followed by Road Safety GB are accepted as the industry norm, and that best practice has been built up over many years. Indeed, Road Safety GB is in the process of refreshing its guidance, and although we await the final outcome, I am informed that substantial changes are unlikely. The guidance will continue to reflect both case law and education legislation requirements. It will be amended to be easier to use and follow and to accommodate legislation changes, but there will be no additional pressure on assessors to make walking routes available.
In conducting an assessment of a walking route, there will be an element of subjectivity, given the wide range and mix of roads and surrounding terrain. That makes it difficult to advise on every eventuality and capture the subtleties in a definitive statutory instruction. However, Road Safety GB considers that the guidance sets the parameters appropriately, drawing on case law and education legislation, so that any personal judgment required by assessors is not too great. In the light of those safeguards, further intervention by the Government into assessment practice will simply be a bureaucratic burden, which is something that we are actively trying to resist.
On the subject of local consultation and local decisions, I understand that when proposing changes there is a need for sensitivity and reassurance over children’s safety and that there is an opportunity for parents to challenge and debate with the authority. That is why the statutory guidance states that local authorities should consult widely on proposed policy changes and that at least 28 days, in term time, should be set aside for the process to be completed. Local authorities should also have in place, and publish, a robust appeals procedure for parents to follow should they have a disagreement with regard to the provision of transport. As I am not satisfied that we have such a procedure, I will take the matter away and reconsider it.
Deregulation
(12 years, 10 months ago)
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Dr Thérèse Coffey (Suffolk Coastal) (Con)
Thank you, Mr Sheridan, for calling me to speak. It is a pleasure to serve under your chairmanship in this important debate about Government policy on deregulation.
I secured this debate partly to publicise the Government’s desire to slash red tape for businesses—and, indeed, in every walk of life—but also to encourage businesses to be very specific, and to participate in the review of red tape so that we do as much as we can to get rid of the red tape that is strangling parts of our industry.
If I were giving a termly report, I would say to the Minister and his colleagues, “Good progress so far, but could do even better.” I agree with others that many huge strides have been made. Understandably, the topic of red tape has the full attention of the Prime Minister and No. 10 Downing street, but it is important that it has the attention of all Departments, covering every industry possible.
My challenge to the Minister and his colleagues is to go further and faster, because in many cases deregulation is free; in fact, it will often save businesses and Government money. Even more importantly, however, we all know that regulation often drives cost. That relates not only to implementation by businesses of measures such as the waste electrical and electronic equipment directive, but the bureaucracy, including inspection to check that measures have been implemented. Regulation is a self-perpetuating industry. We know that the forces of conservatism are entrenched when it comes to ensuring that we have good regulation, which often means a lot of regulation. However, the Minister and I know, as do many other Members, that it is not a case of having no regulation; often, it is a case of having better regulation and less regulation.
It will take great will-power to wrench aspects of bureaucracy into the post-bureaucratic age. Take a simple thing like the requirement for companies to keep six years’ accounts or VAT records. If there are not going to be tax losses, why do we not trim that requirement down to two or three years? There is a desire by Government to make sure that companies have information, just in case. There are other aspects of administration that require businesses to provide information constantly to the Government, whether it is to the Office for National Statistics or other bodies. Frankly, all those things add very little value to a business in its own microcosm; basically, they provide information for free to the Government; they are a way of generating data. In the macro-economic sphere, they may seem good, but if businesses are employing people just to generate statistics or other information for the Government, just in case it is needed, or to comply with a policy, or to satisfy an insurer, and so on, the risk is that businesses will use that talent and those resources not seeking to grow, but seeking to comply.
Of course the European Union has been a huge source of the regulations that have been brought into British law. The majority of the regulations imported from the EU have been generated as a result of the single market and the EU continuing to issue directives. Although I think that we are all great supporters of the single market, I am sure that many of us are not particularly enamoured of how much regulation the single market has brought to our shores. In particular, I am thinking of aspects of certain environmental directives, such as the habitats directive or the water directive.
In a recent statement, the Chancellor said that we want to review quite a lot of those directives, not only to check that they are having the desired effects—the UK Government would not have signed up to them if they did not wish to see a more general approach in particular areas—but to ask whether we are being over-zealous in our interpretation of the directives. Are we getting the balance right between what is in the interests of people and what is in the interests of nature? Are we getting the balance right between consumer and producer? It is critical that we ensure that we have a harmonised approach to understanding how directives should be implemented; we certainly should not gold-plate them in their implementation.
Just last week, I met farmers from my community who are worried about the water directives, how they have been implemented, and the risk that implementation causes in terms of abstraction. That matters because Suffolk is a great producer of many of the crops that we all enjoy around the UK. Suffolk has three potato seasons a year, and it also produces other root vegetables. If Suffolk was not producing that quantity and quality of food, we would basically have to start importing a lot more food. We must ensure that we get the balance right. Elements of food security matter, but so does the environment. We have to respect the environment, sustaining it for the future, and our own farmers know that better than anybody else; they do not want to put themselves out of business overnight. A balanced, sensible, common-sense approach, which involves farmers as much as possible, is needed.
There is another community initiative in my area that has recently been affected by regulation. Plans for a community transport bus are being frustrated at the moment because of a restriction that means that people who passed their driving test after 1995 can carry only a certain amount of weight. That is another European directive that was probably common sense when it was introduced, but it has meant that fewer and fewer people can volunteer to be drivers, or can get their expenses back. That is because the allowable driving weight limit was set some time ago. Of course, those who drive people in wheelchairs, or something similar, around will know that those pieces of equipment have often since become heavier as more technologies are installed in them. As a consequence, fewer people than we would like are able to fill the important role of volunteer driver.
Of course, it is not only European directives that we have put into our regulation; many directives are home-grown, and they often come about in reaction to particular events. Dare I say that the “something must be done” brigade see something happen, and may react by saying, “Something must be done about it; let’s regulate to try and change this behaviour”? We all know that it is not necessarily possible to change behaviour by legislating. We can try to criminalise certain activities, but what is really important is having more positive indications of how we want people, companies and indeed our own councils to behave, rather than simply having a rule whereby they must do something.
Elizabeth Truss (South West Norfolk) (Con)
Does my hon. Friend agree that quite often the regulations that we are discussing have a disproportionate effect on small businesses? For example, farmers in South West Norfolk who are struggling with the natural habitats directive have had to have endless meetings with the local council, Natural England and the Department for Environment, Food and Rural Affairs to sort things out, which is a huge burden on their administrative time. Moreover, quite often, large businesses, particularly in the banking and energy sectors, lobby Government and support them in introducing more regulation, because they see regulation as a barrier to entry for smaller businesses that are trying to enter those important markets.
Dr Coffey
My hon. Friend makes a fair point, and on the subject of energy, the energy red tape challenge will close in less than an hour, according to the Twitter feed on the red tape challenge.
I understand my hon. Friend’s point completely. There is an interesting balance to be struck in legislating for safety by introducing regulations. I agree with her that we do not want unnecessary regulations introduced to try to keep cartels or oligopolies going. Whether it is in response to the REACH—registration, evaluation, authorisation and restriction of chemicals—directive or the herbal products directive, which we are busy trying to implement at the moment in response to European laws that have been passed, there is an argument for allowing people to make their own decisions and choices, rather than having regulation decide things for them.
I also wanted to refer to my hon. Friend’s work on child care. She has done quite a lot of policy work about the cost of child care, and how costs that have been driven into the industry mean that child care becomes exceptionally expensive for parents who want to go to work, but who sometimes cannot afford to, or for whom work seems only to pay for the costs of child care. The question is rightly being asked: what is driving that cost? Looking after children of course takes skill, but it need not take a graduate degree. Over the years, we have ended up with various regulations, leading to a situation in 2009 when two police officers were told that they could not look after each other’s children for more than so many hours at a time because, as they were not registered as child minders, the activity was deemed illegal. The Government looked into the matter, but this is another example of common sense being replaced by some bright spark’s desire to ensure that children are looked after only by child minders, rather than by their parents’ friends or colleagues.
Another issue that comes up regularly is the portability of the Criminal Records Bureau check. Someone going into a school might need five different CRB checks, depending on the activity they want to do. I know that the Government are looking into such issues but, as I said at the start of my speech, I encourage them to go much further, much faster. Not only will that help their constituents, but it will free up Government time to focus on what really matters—assisting people at home and helping businesses to grow and to employ people.
The Prime Minister is reported to have said in the past few days that he is looking for Ministers to ensure that their Bills pass the U-turn test—in other words, to ensure that there are no U-turns. Some of this is about drafting simpler legislation, but a lot of it is about not trying to regulate for every possible scenario. One of the challenges that our country has been facing—this is no criticism of the people involved—is that an openness to having everything in regulation means that measures can become a lawyers’ picnic, with everything open to judicial review. The constant desire to put everything in statute is a huge challenge, because people almost cannot turn for the risk of being taken to court or to judicial review. That is not to say, of course, that people should not have recourse to action when something is patently unfair, but we all, as Members of Parliament, need to consider whether we will end up with lawyers and judges deciding what is right and wrong, rather than Parliament deciding on that through better laws.
Priti Patel (Witham) (Con)
I congratulate my hon. Friend on securing the debate. Businesses, certainly in my constituency but also across the country, definitely welcome the Government’s agenda of deregulating much more, but does she agree that small and medium-sized businesses are still deeply sceptical and concerned about the constant battles they face, including legal judgments and even with local authorities, which seem to think they know best, when it is the businesses themselves that know how to get on and make the right decisions to thrive and grow?
Dr Coffey
My hon. Friend makes an excellent point, especially about the role of local authorities. With her pedigree in a family business and through her subsequent work, she knows about the challenges that people in our constituencies face every day. I will mention one case.
To my surprise, my local district council has responded in an over-the-top way to a deemed health and safety risk. In one part of the country, problems were identified with a commercial building’s liquefied petroleum gas tank, and that led to a measure, across the country, to investigate every such LPG tank. That led to a series of visits, and to changes having to be made. Tanks have not exploded and no risk has been identified, but the tanks must now have cages and there must be a clearing away from the site. There was also a two-page detailed submission by the council officer, essentially telling people that they had to provide details, written instructions, training, and a sign to explain how to call the emergency services, instead of allowing our local pub to use common sense: “If there’s a fire, I’ll tell you what: you just call 999.” I was told: “Well, that business might not have mainly English-speaking people working in it.” For God’s sake, let us use our common sense, so that council officers are talking to their businesses and not issuing two-page template instructions about how to dial 999.
I appreciate that setting out laws represents an ambition—a way of ensuring that we do things in a certain manner—but I encourage the Government to try to not only take the scissors to red tape, as they are already doing, but to get out the shears and really start hacking back. This is about supporting common sense and having simpler legislation. I have every confidence in the Minister, but please, let us go for as short a haircut as we can.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I certainly need a haircut. I congratulate my hon. Friend the Member for Suffolk Coastal (Dr Coffey) on securing this debate and on her excellent contribution. In particular, I accept the argument, “Good progress, could do better,” not because I am unambitious, but because it is important to be realistic. Businesses have heard a lot of rhetoric from politicians of all parties on this issue, but the reality on the ground has often been of a lesser degree, so wanting to ensure a consistent approach has been crucial to our stance.
This issue has vexed Governments for many years—throughout my lifetime, in fact. The previous Administration had a strong rhetoric on the issue, but in the end were delivering the equivalent of six new regulations every working day, which is a daunting inheritance. As my hon. Friend rightly pointed out, the problem lies partly in that natural tension between the wider social and political agenda of any Government and how we deregulate. It is true that when a tragedy occurs—my hon. Friend alluded to this when she talked about something needing to be done—the public pressure on parliamentarians and Government can often be overwhelming, even when, looked at objectively, evidence for new laws is thin. This debate is constantly held in Government.
We as a Government have taken a different approach. Rather than find 200 or 300 regulations that we should get rid of and leave it at that, we are trying to be systematic. Our approach recognises the tension between the wider goals of any Government and the purpose of deregulation and seeks to change the very culture of Whitehall, so that regulation becomes the last resort and not the first option. To do that, we first sought to establish a system to cap the cost of new domestic regulation—the one-in, one-out system, which I will discuss in a moment. We then matched it with a systematic review of all existing regulations, through the red tape challenge, which I will update Members on in a moment.
Those policies are supplemented by an intention to sunset new regulations, to establish a regulatory moratorium on micro-enterprises—that addresses the point made by my hon. Friend the Member for Witham (Priti Patel)—and by our recently announced review of regulators and local enforcement. I will come on to that as well, because very often it is not the legislation but how it is enforced that drives the small business crazy. Alongside that domestic agenda, we have sought to reduce the burden of regulation coming from Brussels, first by ending the routine habit of gold-plating everything that comes from there and, secondly, by actively seeking an exemption from EU legislation for small businesses, and I would like to update Members on that point.
I shall look at each element, to bring the core points together and to answer some of the points raised by my hon. Friend the Member for Suffolk Coastal. Turning to new regulations, last January we introduced the one-in, one-out system to cap their cost, so Ministers have to balance the cost of new regulations by making a commensurate reduction in the existing regulatory burden. We think, as businesses have to, about the picture in the round, not just about the single measure that we have been charged with getting through Westminster. That is important, because when running a business it is not the single measure that breaks one’s back but the cumulative burden of regulations.
When we began the process in January of last year, 157 regulations were in preparation, 119 of which would have imposed a cost on business, and many more have come through the system in the past 12 months. The one-in, one-out system has had the effect of rejecting many of those measures and forcing Whitehall to change its habits, and by the end of last year, we had got to the point of only 89 new measures being agreed, only 19 of which would impose any cost on business.
In the first year—I say this with caution—one-in, one-out has started to have an impact on the flow of new regulations, although it is far from perfect. I want to ensure that the message from the Better Regulation Executive and me, as the Minister with responsibility, is clear. We have made an encouraging start, but, as my hon. Friend the Member for Suffolk Coastal rightly said, we could do better. We need to strengthen and enhance that.
There have been substantial changes in some areas. One-in, one-out has helped to get Departments to think about the picture in the round. For example, the Department for Business, Innovation and Skills has launched its own employment law review. There has been a package of changes on employment tribunals, on commissioning an independent review of managing sickness absence, which is a critical issue for business, and on launching an employers’ charter to rebalance the agenda.
We have agreed to create a universally portable Criminal Records Bureau check that employers can view online instantly, thus reducing the duplication in the process and making it easier to access. Naturally, it will maintain the minimum check that we want to ensure that children are safe, but it will reduce the ridiculous paperwork embroiled in the process.
Similarly, on health and safety, we intend to implement all Professor Löfstedt’s recommendations, which include exempting up to 1 million self-employed people from many health and safety rules designed for multi-nationals. My hon. Friend the Member for South West Norfolk (Elizabeth Truss) made an excellent point about rules being set, possibly conveniently for large businesses, that are disproportionate for the self-employed and for smaller firms.
The red tape challenge and the question of Europe are related. The red tape challenge matches the wish of the one-in, one-out policy to examine systematically what is already on the statute book. It is not easy to be exact, but we think that the statute book incorporates approximately 21,000 measures, 11,000 or so of which have a direct bearing on business. It is a mammoth task, as Members will appreciate. We intend systematically to review and cull unnecessary, burdensome or ineffective regulations.
We have grouped regulations into themes to make it easier to see the picture in the round. The website has featured 13 themes, and the Star Chamber, which goes through regulations item by item with civil servants from all the relevant Departments, has examined five themes completely. The environmental themes, to which my hon. Friend the Member for Suffolk Coastal referred, are before us at the moment. The points that she made have been mirrored in many of our discussions. I welcome her contribution. If she wants to add to it after the debate, I shall be happy to ensure that her comments are incorporated into the process.
Of the 1,200 measures that we have considered so far, more than half will be either scrapped or substantially improved. On 15 December last year, 84 defunct regulations were removed from the statute book by the House. The process in law has begun in Westminster, not just in Whitehall. To reverse the situation, we must ensure that the sausage machine is put into reverse and that we regularly remove measures from the statute book. Key measures include overhauling employment tribunals, replacing 12 sets of consumer rules and laws with a single consumer Bill of Rights, implementing a wholesale deregulation of entertainment licensing and simplifying poisons licensing. Some of the most serious poisons are on the same list as fly spray. My hon. Friend rightly described the rather crude way in which significant and minor risks are lumped together, sometimes for all the wrong historical reasons. That must be addressed, and poisons are a classic example.
We are cutting the number of different sets of food labelling regulations from a rather dazzling 31 to 17, and maybe we need to do a little more. We are removing needless energy rules that currently tie up the process of short-term holiday letting, which is important in East Anglia. We are also scrapping 80 of the 107 regulations considered in the hospitality, food and drinks sector. Those are important changes.
We have incorporated the habitat and wildlife directive into our consideration of environmental law under the red tape challenge. How could we not? However, the red tape challenge cannot rewrite set European legislation. What we can do is ask ourselves, “Are we implementing this in a minimal way and a way that is reasonable for those whom we seek to regulate? Is the information that we seek from those organisations in a form and of a scale that it is reasonable to expect them to fulfil?” It is easy for a large department of 2,000 people not to realise that a three-person business finds it a heck of a challenge to fill in endless survey forms and still earn a living.
On Europe, we recognise that we need to deal with the issue fundamentally. That is why we started last year with a new set of guiding principles. The first was to end the routine gold-plating of EU laws. My hon. Friend the Member for South West Norfolk is absolutely right that large, well-established lobbying voices can argue that it would be really good for Britain to have enhanced rules—just slightly more than the minimum standard, as they might describe it, in Europe. “It would be good, Minister,” they say, “to make things crystal clear by setting out all 74 possible circumstances in legislation. That would be really helpful. Clarity would be brought.” That is the natural argument presented.
To prevent that, we have put in place a principle saying that the default position is that we will simply copy what is in the agreed directive into UK law unless that would clearly affect UK interests adversely. That is a fundamental shift from the default position. It does not mean that no measure will ever be gold-plated, but it does mean that the Minister in question will have to bring it before their Cabinet colleagues to justify why. That is an important deterrent.
We also need to go back further in the policy-making process in Europe. That is why, last March, the Prime Minister wrote to President Barroso and Herman Van Rompuy, the President of the European Council, calling for new burdens on business to be offset by savings elsewhere. Members can see that the principle of the cumulative burden has been introduced. Since then, we have secured a commitment from the European Commission to reverse the burden of proof when including micro-businesses in the scope of EU legislation. The EU must justify why a micro-business should be included, rather than assuming that it should. That is an important first principle. To illustrate, we have agreed with EU Ministers to exempt micro-businesses from certain EU accounting rules. We think that that will save UK small businesses approximately £150 million to £300 million in annual costs. That is an important shift, and it sets a precedent. Once it is seen that that can be done in that field, there is no reason why it cannot be explored elsewhere.
It is not just the Commission or the Council with which we must concern ourselves; often, it is also the European Parliament, where there are also strong voices similarly in favour of saying “Something must be done.” That is why, working with Members of the European Parliament across the coalition, we have secured the European Parliament’s agreement that it will conduct independent impact assessments on its substantive amendments. It has also set up a specific unit to consider that work. In other words, when a measure is introduced, the European Parliament can now say, “Hang on a moment. What will that cost?” The cost can be judged independently. That is an important start, although we need to go a lot further. Now that we have those matrices, the next step is to ensure that they are implemented.
In conclusion, rather than just finding 50 popular measures to get rid of and leaving it at that, we have tried to address the root problem. During the next week or so, I will set out for the House the details of what we did in 2011, so that people can see measure for measure, item for item and cost for cost exactly what has gone, what is going and what will stay. Over the past 12 months, we have sought to turn the oil tanker around, change direction and ensure that we not only cap the cost of new regulation and reduce the burden of existing regulations, but tackle the burden of EU regulations and how the UK implements them. Together, those things will make a good start, but as my hon. Friend the Member for Suffolk Coastal rightly said, we recognise that there is much more to be done.
Question put and agreed to.
Written Ministerial Statements
(12 years, 10 months ago)
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Finance Bill
(12 years, 10 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Finance Bill will be published on Thursday 29 March.
Explanatory notes on the Bill will be available in the Vote Office and the Printed Paper Office and placed in the Libraries of both Houses on that day. Copies of the explanatory notes will be available on the Treasury’s website.
Department's Work (Christmas Recess)
(12 years, 10 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I would like to update hon. Members on the main items of business undertaken by my Department since the House rose for Christmas recess on 20 December 2011.
Community budgets
Decentralisation of funding and ensuring greater value for taxpayers’ money are key goals for my Department. On 21 December, my Department announced 14 new community budget areas that will be able to combine resources into a locally co-ordinated funding pot with greater local control that will help improve services for local people.
Four “whole place” pilots will create a joint team with local partners to establish devolved budget proposals with decision-making structures for a locally run operation during this year. This will help achieve significant public sector savings, cut red tape and improve policy making.
Ten “neighbourhood level” areas have also been selected to develop smaller scale community budgets that will give residents a micro-local level say over the services they want and use. The local community will play a leading role, working with councils and professionals, to shape local services so they work from a customer’s perspective.
Council reserves
Reflecting our commitment to greater local government transparency, on 29 December, my Department published detailed figures for council budget reserves based on revenue budget forecast returns for 2011-12 provided by local authorities. Overall, English local authorities expect to be holding £10.8 billion in reserves on 31 March 2012. Their forecasts a year ago on 31 March 2011 totalled £11 billion.
Determining the level and use of reserves is a matter for individual local authorities, taking into account local challenges and priorities. However, this demonstrates many councils have room for manoeuvre with their finances that can help them deliver more efficient local services in future years.
Local audit arrangements
Following the decision to abolish the Audit Commission, the Government sought views last year on a new, more transparent and accountable local public audit framework that would reduce the cost of public audit and maintain high standards of scrutiny over public money.
On 4 January, my Department published proposals for its next steps for the audit of local public bodies. The new framework will free local bodies to appoint their own independent auditors from an open and competitive market. It will be based on the private sector audit model with transparent regulation overseen by the Financial Reporting Council and the National Audit Office. Separate arrangements will be developed for smaller bodies like parish councils.
The Government intend to bring forward legislation to formally close down the Audit Commission and introduce the new framework as soon as parliamentary time allows. A draft Bill will be published for pre-legislative scrutiny in the spring.
Supporting home ownership
In November 2011, my Department published an ambitious housing strategy to tackle the housing shortage, boost the economy, create jobs and give people the opportunity to get on the housing ladder.
The housing strategy included an announcement of our plans to increase the right to buy. Right to buy can promote opportunity and boost social mobility for social housing tenants but restrictions on discounts in recent years have limited the impact of the scheme. To ensure that there is no reduction in the supply of affordable homes any additional home bought under the right to buy will, for the first time, lead directly to the provision of a new affordable home for rent on a one-to-one basis. On 22 December the Department published our proposals to increase the discount cap under the right to buy scheme to £50,000, making it easier for social tenants to buy their homes.
Also on 22 December, my Department announced further details of the £420 million get Britain building fund. The fund will help builders with planning permission get back onto housing sites that have been shut down because of problems accessing development finance. Over the next two years, this £420 million fund is expected to unlock up to 16,000 homes on sites that are currently stalled, and help create up to 30,000 jobs in construction and related industries.
The Government want to see investment and support right across the housing sector to improve the rental market and opportunities for homeownership. On 23 December, my Department confirmed that Sir Adrian Montague will lead a review of barriers to investment in rented homes. The review will examine how best to encourage greater investment in rental properties—helping support the rapid growth of the private rented sector by increasing the supply of affordable homes.
Social housing
On 5 January, my Department published new allocations guidance for consultation that will release councils and housing associations from the shackles of the current tick-box approach for allocating social homes.
The new freedoms will ensure councils and housing associations can reward achievement and encourage housing mobility—so scarce and precious social homes go to people who genuinely need and deserve them the most, such as hard working families and ex-servicemen and women.
At the same time, housing providers will be able to tackle the tenants who are able to work but do not take up opportunities for jobs. For too long there has been a sense of unfairness over who gets to live in social housing, with a common belief that tenancies only go to those who know how to play the system.
Several councils have already indicated they want to introduce a new flexible approach to manage allocations—Westminster, Southend and Manchester councils will prioritise those who show responsibility and make an effort to find work, and in Wandsworth those tenants on new flexible contracts who do not make an effort to find work will risk losing their tenancy.
Homelessness
On 21 December, my Department announced an additional £20 million to provide single people facing homelessness more housing options to ensure they do not have to spend time on the streets. This funding is in addition to the £400 million preventing homelessness grant.
A new programme will also be introduced to help local authorities improve their homelessness prevention process for single people.
Some £8 million from the homelessness transition fund, which was set up to help support the national rough sleeping strategy, has been allocated to 19 communities across England to support a national roll out of London flagship “No Second Night Out”. The initiative works with local communities to help provide the accommodation and support for rough sleepers.
Helping the elderly
On 3 January, the Department for Health announced a one-off additional £150 million will be allocated to primary care trusts in England, for immediate transfer to local authorities for investment in social care services which also benefit the health system. For those needing adaptations to their homes, the Government have confirmed an additional £20 million for disabled facilities grants—bringing the total to £200 million for 2011-12 alone.
We are also providing £51 million towards home improvement agencies, who will provide help and advice including:
housing advice, including help to move to more suitable accommodation if needed;
handyperson services, including small home repairs, home safety and security adaptations;
energy efficiency advice; and
arranging for adaptations and home repairs to be made, including grab rails, stair-lifts and major work such as ground floor extensions.
These agencies also offer hospital discharge services—ensuring older people leaving hospital care are given the support they need to be able to recuperate in the comfort of their own homes.
We are also providing £1.5 million funding for FirstStop, which provides independent advice to older people looking to plan their future housing needs—whether in their own homes, or in care homes. This is in addition to work already underway to look at new and innovative ways in which elderly people can fund their future care needs without having to resort to selling their property.
Traveller sites
On 7 January 2012, my Department announced the successful outcome of bids for £60 million of funding that will provide new authorised pitches and better facilities for travellers on official sites. The Homes and Communities Agency have completed their assessment of bids and have recommended offers that will deliver over 750 new and improved pitches at a cost of £47 million. The remaining fund will continue to be considered and the agency will help those who did not see their bids approved to resubmit improved offers.
This support for official traveller pitches goes hand in hand with action against unauthorised traveller sites. Through the Localism Act, the Government are introducing stronger powers for councils to tackle the abuse of retrospective planning permission. These strengthened powers are helping councils tackle any form of unauthorised development. The new authorised travellers’ sites will provide help to reduce the number of unauthorised sites, which create tensions between travellers and the settled community.
The last Government’s approach was ineffective because traveller site funding was allocated but often remained unspent. By imposing top-down targets for traveller sites, local councils were compelled to encroach onto the green belt and open countryside, harming community relations and further leading to an increase in the number of unauthorised sites.
Flag flying regulations
On 6 January, my Department set out proposals to allow a much wider range of flags to be flown without the need for planning permission. Under current planning rules, only a select group of flags can be flown without express permission from councils and a fee of up to £335. Under the new rules, people will be able to fly a much wider range of flags including the flags of football and cricket teams or towns and villages. It will also allow communities to show support for our armed forces by easing rules on flying local regimental flags.
If people want to celebrate something that is important to them by flying a flag they should be able to do so without having to fill in forms or paying town hall officials for the privilege. This will make it easier for people to celebrate their allegiance to a cause, a county or a local organisation if they choose to do so.
I am placing the press notices and documents associated with these announcements in the Library of the House.
Youth Sport Strategy
(12 years, 10 months ago)
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The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
Today I am announcing a new youth sport strategy, designed to create a sporting habit for life among young people.
This Government are committed to creating a lasting sporting legacy from the Olympic and Paralympic games and making good on the original promise to use the London 2012 Olympic and Paralympic games to inspire a new generation and create a deep and lasting legacy of sports participation in every community.
However, since 2005 when we won the bid to stage the games, participation rates in sport in England have fallen, particularly among young people. Our new approach aims to arrest this decline and will have a strong focus on providing the necessary opportunities and infrastructure for young people to develop a sporting habit for life. Over the next five years £1 billion of lottery and Exchequer funding will be invested to ensure that young people are regularly playing sport and continuing their participation in sport into their adult life. This investment has been made available through the Government’s lottery reforms that have resulted in more lottery money going to sport.
We are seeking consistent increases in the proportion of people regularly playing sport and, in particular, we want to raise the number of 14 to 25 year olds who take up sport as a habit for life.
We will do this, in partnership with Sport England, by building a lasting legacy of competitive sport in schools through the school games; improving links between community sports clubs and schools, further education colleges and universities—with the five biggest sports (football, rugby league, rugby union, cricket and tennis) leading the way; working with the sports national governing bodies (NGBs) and ensuring that they focus their funding on activities that promote sport as a habit for life among young people; putting significant investment into new and upgraded sports facilities, including funding schools to enable them to open up their sports facilities to the public; and working with local authorities, voluntary and community groups and clubs to make the broadest possible sporting offer to young people.
We will institute a new performance management regime, with a strict payment-by-results system. For sports that do not deliver on their ambitions, funding will be withdrawn; for those that are delivering well, they will be able to access more funds in order to expand their good work. Value for money will be a key consideration and NGBs will need to demonstrate how they will have an impact on participation at the local level. NGBs must also meet high standards of governance and financial control. All public funding allocated will be published and meet Government transparency guidelines.
Falkland Islands
(12 years, 10 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I would like to update the House on the British Government’s response to statements made in south America regarding the Falkland Islands during the Christmas recess.
On 15 December the Government of Uruguay declared that they would deny access to their ports to ships flying the Falklands flag. This was followed five days later by a statement from the summit of the Mercosur group of countries (Argentina, Brazil, Paraguay and Uruguay, with associate members including Chile) that echoed the Uruguayan announcement.
Our response has been justifiably robust. The Uruguayan ambassador was formally summoned to the FCO and I spoke twice to the Uruguayan Foreign Minister to underline how seriously we regard this development. Our ambassadors in the region were instructed to call on their host Governments to express our strong objection to the Mercosur statement and to assess the practical implications for vessels operating between the Falklands and south America.
We made it clear that the decision to close ports to ships flying the Falklands flag has no legal basis, and that it would be unacceptable and unbecoming for any Latin American democracy to collaborate in Argentina’s attempts to economically blockade the Falkland Islands. We reiterated our strong support for the rights of the islanders to determine their political future, and also made clear that any attempts to coerce them through economic or other pressures would be resisted by the British Government. Such actions are inconsistent with the principles of the United Nations charter and the rights of the Falkland Islands people to trade openly and without hindrance.
While we do not accept that the decision to refuse entry to vessels flying the Falklands flag has any basis in international law, our priority has been to ensure that the trade and commercial links between the Falklands and south America are not compromised by this political declaration. We have had productive and honest discussions with Uruguay, Chile and Brazil. All three countries have said that they have no intention of participating in an economic blockade of the Falkland Islands and that all Falklands-related commercial shipping will continue to enjoy access to their ports, in accordance with domestic and international law, if they are flying the red ensign or another national flag when docked.
I hope that others in the region will continue to recognise that differences of opinion over UK sovereignty of the Falkland Islands can not justify collusion in efforts to intimidate an innocent civilian population through economic pressure. The British Government will always ensure that the Falkland Islanders’ right to determine their political future is respected.
More broadly, we will continue to strengthen our engagement of Latin America, as I set out in my Canning House speech in November 2010. The UK has considerable political, economic and security interests in the region, with high potential for future economic growth through partnership with Latin America. I am confident that this important agenda is consistent, and indeed mutually reinforcing, with our desire to ensure that the interests and wishes of the Falkland Islanders are protected.
NHS Future Forum
(12 years, 10 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
The Department of Health commissioned the independent NHS Future Forum in the summer to conduct a second listening exercise on a series of key issues for health and care. The NHS Future Forum submitted its report to the Department on 20 December and it has been published today. The report contains a series of recommendations for Government and for key bodies in the system in the areas of:
integration;
information;
the NHS’s role in improving the public’s health; and
education and training.
The Department is pleased to be able to accept all the forum’s recommendations for Government and has today published its response to the report.
Also published today is “Liberating the NHS: Developing the Healthcare Workforce, From Design to Delivery”, which sets out the Government’s policy for a new education and training system, and details how the Government are addressing the forum’s recommendations on education and training.
All documents published have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
PIP Silicone Gel Breast Implants
(12 years, 10 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
Approximately 40,000 women in the UK have had implants manufactured by the French manufacturer Poly Implant Prosthèse (PIP). These implants were made of a non-medical grade silicone gel, which was withdrawn from use across Europe on 30 March 2010 following investigations at the PIP plant in France.
The recommendation of the French Government on 23 December that these should be removed has caused understandable worry for women affected. My primary concern is for safety and well-being, which is why I asked the NHS medical director, Sir Bruce Keogh to convene an expert advisory group to review the available data on PIP implants.
My Department published the interim report of the expert advisory group on Friday 6 January 2012. It also published a letter from the NHS chief executive, Sir David Nicholson, to the chief executives of all NHS bodies and from the chief medical officer, Dame Sally Davies, to all general practitioners and other relevant health professionals.
Taken together, these documents provide authoritative advice to women and clinical professionals about the risks associated with PIP implants. The expert advisory group concluded that there is not enough evidence to recommend routine explantation of the implants, although they also recognised this is a worrying time for women with PIP implants. The documents therefore set out the model of care to be provided to NHS patients, and the expectation that the private sector would follow suit.
These documents have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. I will keep the House updated.
Legal Services Board and Office for Legal Complaints Triennial Reviews
(12 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
In March 2011 the Government responded to the Public Accounts Committee report “Smaller Government: Shrinking the Quango state” setting out the coalition’s plans for reforming the public bodies sector. It includes the requirement to undertake triennial reviews of executive and advisory non-departmental public bodies (NDPBs).
The Legal Services Act 2007 established the Legal Services Board (LSB) as the oversight regulator for the legal profession and the Office for Legal Complaints (OLC), to administer a new, independent and fair ombudsman scheme for service complaints against authorised persons. The LSB and the OLC were established in January 2009 and July 2009 respectively.
To deliver the coalition Government’s commitment to transparency and accountability the LSB and the OLC will be subject to individual, but linked triennial reviews. The Ministry of Justice, as the sponsoring Department, has today launched a consultation which will last for a period of 12 weeks inviting views. In line with Cabinet Office guidance the reviews will consider the following for each body:
the continuing need for the LSB and the OLC—both their functions and their form; and
where it is agreed that either or both should remain, to review the control and governance arrangements in place to ensure that the public body is complying with recognised principles of good corporate governance.
In conducting the triennial reviews, officials will be engaging with a broad range of stakeholders and users of both bodies. The reviews will be aligned with guidance published by the Cabinet Office: “Guidance on Reviews of Non-Departmental Public Bodies”. The final reports and findings will be laid in this House.
Blue Badge Improvement Service
(12 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I am today providing an update on implementation of the blue badge reform programme that I announced in February 2011.
One of the key reforms to the blue badge scheme is the blue badge improvement service. This service has been developed in close consultation with disabled people and local authorities. It is a major initiative aimed at tackling rising levels of badge fraud and abuse, helping to ensure that disabled people receive improved customer service and ensuring that the scheme remains sustainable in the long term for those who rely on it most.
The blue badge improvement service became operational on 1 January 2012. I am pleased to say that every local authority in England has signed up to use the service and I would like to thank them all for their support in helping to deliver important and necessary changes that are vital for the future sustainable operation of the blue badge scheme. The service should also help them to realise efficiency savings of up to £20 million per year.
In an innovative move by the Department for Transport, the capital costs of the service are being met through private sector investment from Northgate Information Solutions who will deliver the secure web-based service, and Payne Security who will print, supply and distribute the newly designed badge.
The service establishes a common store of key information on badges and badge holders that will enable verification checks to be made quickly and easily.
To counter fraud, the design of the blue badge was changed in regulations that came into force on 1 December 2011. The old-style cardboard badges have been replaced by new ones made from a fused and bonded hard plastic material and which contain a number of overt and covert security features.
For the first time, people can now apply for a blue badge using a national system that is available on Directgov. This should result in a quicker turnaround time for people re-applying for badges whose circumstances are not going to change. Those who use the online application form will only be asked to complete those sections that are relevant to the eligibility under which they are applying. They can also sign up for text and email reminders at re-application time, track the progress of their application and there will be an eligibility checker for those who want to find out if they are eligible for a badge. From 1 April 2012, badge holders will be able to report lost and stolen badges and update changes to their details online.
There is a new national helpline for general enquiries about blue badges that will signpost callers to the relevant local authority. However, local authorities will still be in charge of administering the blue badge scheme, making decisions about whether applicants are eligible and issuing badges.
High Speed Rail
(12 years, 10 months ago)
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The Secretary of State for Transport (Justine Greening)
The consultation “High Speed Rail: Investing in Britain’s Future” was one of the largest national consultations ever undertaken by the Department for Transport. A total of 54,909 responses were received, from individuals, businesses and organisations across the country. It is clear from the consultation that a national high speed rail network—High Speed 2—generates strong feelings, both in favour and against the scheme.
Since becoming Secretary of State for Transport I have taken time to consider all aspects of the consultation proposals and the evidence arising from both consultation responses and further work undertaken or commissioned by my Department and HS2 Ltd. This statement summarises my decisions.
I have decided Britain should embark upon the most significant transport infrastructure project since the building of the motorways by supporting the development and delivery of a new national high speed rail network. By following in the footsteps of the 19th century railway pioneers, the Government are signalling their commitment to providing 21st century infrastructure and connections—laying the groundwork for long-term, sustainable economic growth.
High Speed 2 (HS2) is a scheme to deliver hugely enhanced rail capacity and connectivity between Britain’s major conurbations. It is the largest transport infrastructure investment in the UK for a generation, and, with the exception of High Speed 1 (HSl), is the first major new railway line since the Victorian era.
The HS2 Y network will provide direct, high capacity, high speed links between London, Birmingham, Leeds and Manchester, with intermediate stations in the East Midlands and South Yorkshire. There will also be direct links to Heathrow Airport and to the continent via the HSl line. It will form a foundation for a potentially wider high speed network in years to come.
HS2 will be built in two phases to ensure that the benefits of high speed rail are realised at the earliest possible opportunity. The line from London to the West Midlands and the connection to HSl are expected to open in 2026, followed, in 2032-33, by the onward legs to Manchester and Leeds and the connection to Heathrow. The capital cost at 2011 prices of building the complete Y network is £32.7 billion. At present values, it will generate benefits of up to £47 billion and fare revenues of up to £34 billion over a 60-year period.
The benefits of HS2 will extend beyond the network itself; links to current lines will enable direct trains to run to cities such as Liverpool, Newcastle, Glasgow and Edinburgh and, with long-distance services transferring to the new network, space will be freed up for new commuter, regional and freight services on other lines, opening up new opportunities for Britain’s existing railways. Links to key urban transport networks, such as Crossrail, will help to spread the benefits further still.
HS2 is entirely consistent with the Government’s objectives for carbon emissions. Electrified rail is a comparatively low-carbon mode of transport, especially with the continued decarbonisation of the grid. Speed increases power consumption, but also makes HS2 more attractive to those currently flying or driving. The faster journeys on HS2—Edinburgh and Glasgow will be just 3.5 hours from London—could transfer around 4.5 million journeys per year who might otherwise have travelled by air and 9 million from the roads. HS2 will also create more rail capacity on existing conventional speed lines for freight—removing lorries from our busy trunk roads. HS2 is therefore an important part of transport’s low-carbon future.
In securing these benefits for our country, I am committed to developing a network with the lowest feasible impacts on local communities and the natural environment. I have been mindful that we must safeguard the natural environment as far as possible, both for the benefit of those enjoying our beautiful countryside today and for future generations.
People living along the line of route highlighted particular concerns and provided constructive and thoughtful comments about the London to West Midlands route proposed at consultation. Following careful study by my engineers I can announce a package of alterations to further reduce the route’s impacts. The changes mean that more than half the route will now be mitigated by tunnel or cutting and there will also be a reduction in the impacts on people and communities, ancient woodlands and important heritage sites.
The changes include:
A longer, continuous tunnel from Little Missenden to the M25 through the Chilterns;
A new 2.75 mile (4.4 km) bored tunnel along the Northolt corridor to entirely avoid major works to the Chilterns line and impacts on local communities in the Ruislip area;
A longer green tunnel past Chipping Warden and Aston le Walls, and to curve the route to avoid a cluster of important heritage sites around Edgcote; and,
A longer green tunnel to significantly reduce impacts around Wendover, and an extension to the green tunnel at South Heath.
The revised route offers considerable improvements to communities, with the number of dwellings at risk of land take almost halving and the number experiencing increased noise levels reducing by a third. Despite these improvements to limit the negative impacts of the line, HS2 will inevitably affect some homeowners, communities and businesses. To help those affected, we will bring in a package of measures, which are over and above what affected homeowners are already entitled to under law. These include:
A streamlined purchase scheme to simplify the statutory blight process for property owners;
A sale and rent back scheme to give homeowners within the safeguarded area more flexibility;
A streamlined small claims scheme for construction damage which will allow individuals and businesses who are entitled to compensation under existing law to claim it more quickly and simply;
A package of measures to reinforce confidence in properties above tunnels. Homeowners will be offered before and after surveys, a thorough assessment of the impact of similar tunnels, an explanation of the measures that will be taken to prevent perceptible vibration impacts, financial compensation for the compulsory purchase of subsoil, and a legally binding promise that HS2 will be permanently responsible for resolving any related settlement or subsidence issues; and,
A refreshed hardship-based property purchase scheme.
Finally, we will work constructively with local authorities along the line of route to minimise the negative consequences of HS2 and maximise the benefits.
In November I announced the triennial review of HS2 Ltd, and in making my decision I have accepted the finding that HS2 Ltd is the appropriate body to continue undertaking this work.
Today I have presented to Parliament a full account of my decisions titled “High Speed Rail: Investing in Britain’s Future—Decisions and Next Steps”. My Department has published a series of supporting documents which set out in further detail the basis on which I have reached my decisions. All of this material is available at: www.dft.gov.uk/highspeedrail