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Jack Lopresti (Filton and Bradley Stoke) (Con)
1. What recent assessment he has made of the security situation in Northern Ireland; and if he will make a statement.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
The threat level in Northern Ireland remains at severe, meaning that a terrorist attack is highly likely.
Despite overwhelming community rejection of their murderous activity, terrorist groups continue to carry out indiscriminate attacks, as we saw in Londonderry last week. The Government remain committed to countering terrorism in all its forms.
Jack Lopresti
What measures is my right hon. Friend taking to ensure that young people do not gravitate to joining paramilitary organisations?
Mr Paterson
My hon. Friend touches on an important point. The problem cannot be solved by containment alone, although we pay full tribute to the Police Service of Northern Ireland and all those who are working in our security effort. The Prime Minister said that he wants a shared future, not a shared-out future, in Northern Ireland, and we are working closely with the devolved Administration. Only last week, Eamon Gilmore, the Tánaiste, was in Northern Ireland talking to the First Minister and Deputy First Minister about the very schemes to which my hon. Friend refers. A review is taking place to see which are the most effective, and which could be endorsed for a future PEACE IV programme.
Dr William McCrea (South Antrim) (DUP)
Does the Secretary of State understand the anger and fear that is felt in my constituency and, indeed, throughout Northern Ireland, in the light of the release of Colin Duffy, a person charged on three different occasions with the murder of innocent people and who always seems to find a get-out card? What assurance can the Secretary of State give my constituents that they will be safe from brutal terrorists such as Colin Duffy, and not become another statistic in a long line of innocent victims?
Mr Paterson
I entirely sympathise with the concerns of the hon. Gentleman and his constituents. We believe in the separation of powers, and the decision was made by due process. I am delighted that there was one conviction for that appalling incident. I assure the hon. Gentleman that, as he knows from our private discussions, the Government will bear down on all terrorists. We have brought a further £200 million to Northern Ireland at the request of the Chief Constable, and we will stand by the PSNI and all those working to eradicate that very small number of totally unhinged, dangerous people.
Mark Durkan (Foyle) (SDLP)
As the Member for the city of Derry, may I inform the Secretary of State that the overwhelming majority of its citizens deplore and resent the dissidents’ acts of civic sabotage on Ireland’s fourth city? Given the right hon. Gentleman’s locus on some security matters, what input does he have into the justice and security Green Paper, and what engagement is he having with the devolved authorities about its implications for Northern Ireland?
Mr Paterson
I wholly sympathise with the hon. Gentleman’s thoughts on behalf of his constituents. Last week’s attacks were completely incomprehensible to any sane person: elderly people in a home and disadvantaged young people in a home were at real risk. I pay full tribute to the incredible bravery and professionalism of those PSNI officers who led the evacuation. I assure the hon. Gentleman that I work closely with David Ford, the Justice Minister, and the Chief Constable. I spoke to them both this morning, and we are liaising on the justice Green Paper.
Vernon Coaker (Gedling) (Lab)
I associate myself with the Secretary of State’s remarks about the PSNI and others in Northern Ireland who are combating the threat.
Last week saw the inspirational launch of an exciting tourist initiative for Northern Ireland, NI 2012. When so many people are doing so much work to create a better future, does the Secretary of State agree that last week’s bomb attacks in Derry/Londonderry were reckless and futile? Will he guarantee to the people of Northern Ireland that all those coping with the terrorist threat are given our full support and the resources that they need to deal with any future threat?
Mr Paterson
I thank the hon. Gentleman for his supportive comments and for the support he gives me on that in private. He is absolutely right to condemn the attacks, which play absolutely no part in the future of Northern Ireland.
On support for the PSNI, as I have just said, the Chief Constable requested extra funds soon after the Government came to office and we delivered £200 million over the next four years. He is quoted in April last year as saying:
“We have the resources, we have the resilience and we have the commitment.”
Vernon Coaker
I again assure the Secretary of State of the Opposition’s full co-operation in dealing with those matters. He will know that responsibility for national security in Northern Ireland rests with him. What assessment has he made of the effectiveness of the security services’ performance and the implementation of the five key national security protocols agreed between the security services and the PSNI at St Andrews?
Mr Paterson
I am happy to confirm that Lord Carlile, in his third annual report earlier this year, confirmed that MI5 and the PSNI are working very closely together. More work could not be done more energetically to deal with the difficult dissident republican threat.
Paul Goggins (Wythenshawe and Sale East) (Lab)
The devolution of policing and justice reinforced the determination of the political parties in Northern Ireland to face down the small minority who still engage in violence, but legislation stipulates that the Justice Department will disappear in May unless the Assembly resolves that it should continue. Will the Secretary of State update the House on the current thinking within the Executive and the details of any action he might need to take to maintain progress?
Mr Paterson
I pay tribute to the right hon. Gentleman’s hard work when he ran security under direct rule. As he rightly says, the position is that the current arrangements cease in May this year. Negotiations are going on within the Executive between the First Minister and the Deputy First Minister, in which the Government are also involved. As I understand it, the incumbent, David Ford, has the full support of the First Minister and Deputy First Minister. For the Government’s part, where we have overlapping roles, we have strong support for him and get on with him extremely well. I was in Dublin recently and I can confirm that Alan Shatter, the Irish Justice and Equality Minister, also enjoys working with David Ford. I hope that in due course this will become—
Andrew Selous (South West Bedfordshire) (Con)
2. What recent discussions he has had with Ministers in the Northern Ireland Executive on job creation in the private sector.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
We work closely with Executive Ministers in the joint ministerial working group on rebalancing the economy. I regularly meet the Enterprise, Trade and Investment Minister and her colleagues in support of the Executive’s efforts to create more jobs in the private sector.
Andrew Selous
I was delighted to see a recent CBI survey that said that 39% of firms in Northern Ireland expect to take on more staff this year, but does my right hon. Friend believe that the Northern Irish economy would do even better if it adopted the Work programme, which has been rolled out in the rest of the UK?
Mr Swire
Yes, I do. My hon. Friend is absolutely right: the Work programme provides tailored support for claimants who need more help to find jobs. I hope very much that Northern Ireland Ministers will adopt it as part of their welfare reforms. It provides a greater opportunity than did the future jobs fund.
Toby Perkins (Chesterfield) (Lab)
An Aviva survey released this week showed that a quarter of small business owners are thinking of jacking in running their own business and instead trying to get a job because their situation is so difficult. Are Ministers in the Northern Ireland Executive as frustrated as the rest of the country at the lack of growth that this Government are delivering?
Mr Swire
We have many things to celebrate in Northern Ireland that are occasionally eclipsed by other news stories. Today, Muldoon Transport Systems in Dungannon has secured a £1 million contract to supply 19 trailers to one of Saudi Arabia’s biggest businesses. Nearly a third of London buses are manufactured in Ballymena by Wrightbus. I look forward to joining the hon. Gentleman for an early summer holiday on one of Boris’s Ballymena buses after Boris wins the mayoral elections.
It is worth pointing out that Northern Ireland has won 7% of foreign direct investment to the UK with only 2.8% of the population, and that Belfast attracts more foreign direct investment than any UK city outside London. Those are good news stories in Northern Ireland on which we intend to build.
Mr Laurence Robertson (Tewkesbury) (Con)
Does the Minister share my concern about the number of jobs that could be lost in Northern Ireland as a result of the carbon price floor—a tax that does not exist in the Republic of Ireland?
Mr Swire
My hon. Friend, the Chairman of the Northern Ireland Affairs Committee, has raised that with my right hon. Friend the Secretary of State, who in turn raised it with the Chancellor of the Exchequer, who is discussing it with the Northern Ireland Finance Minister, the hon. Member for East Antrim (Sammy Wilson), who is in his place, and the Economic Secretary to the Treasury. They will report shortly.
Ms Margaret Ritchie (South Down) (SDLP)
Will the Minister provide us with a progress report on the resolution of the problem of the capital budget for Northern Ireland for the next 10 years, which the Northern Ireland Office has promised us? If that is satisfactorily resolved, it will help to stimulate the local economy—both public and private sector—and to sustain existing jobs.
Stephen Lloyd (Eastbourne) (LD)
Before Christmas, I had the privilege of meeting the Northern Ireland Federation of Small Businesses, and I was extremely impressed with its efforts and the work it is doing. Will the Minister join me in congratulating the Northern Ireland FSB on its work and its determination to get through the economic challenges of the next 18 months?
Stephen Pound (Ealing North) (Lab)
I find the Minister of State’s selective comments to be quite extraordinary. The Queen of Hearts suggested that one should believe six impossible things every day before breakfast, but does the Minister seriously expect us to believe that a shrinking private sector can somehow compensate for the highest public sector job losses of any UK region? That sounds like “Alice in Wonderland” to me.
Mr Swire
Let us look in the real glass, rather than the looking glass, and give the hon. Gentleman three quick facts. The unemployment rate for Northern Ireland was down 0.7% over the quarter and 1% over the year. The number of unemployed people in Northern Ireland was estimated at 59,000, down 7,000 over both the quarter and the year. Northern Ireland unemployment for 18 to 24-year-olds for the three months to October 2011 was estimated at 18.2%, compared with a UK average of 20.5%. No one is saying that this will continue. We hope it will, but we are trying to deal with unprecedented economic circumstances, both globally and in trying to right the appalling legacy of the Labour Government.
Nigel Adams (Selby and Ainsty) (Con)
3. What discussions he has had with the Secretary of State for Culture, Olympics, Media and Sport on arrangements in Northern Ireland to mark the diamond jubilee of Her Majesty the Queen.
Michael Ellis (Northampton North) (Con)
4. What discussions he has had with the Secretary of State for Culture, Olympics, Media and Sport on arrangements in Northern Ireland to mark the diamond jubilee of Her Majesty the Queen.
Glyn Davies (Montgomeryshire) (Con)
11. What discussions he has had with the Secretary of State for Culture, Olympics, Media and Sport on arrangements in Northern Ireland to mark the diamond jubilee of Her Majesty the Queen.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
I am sorry, Mr Speaker. Such was the excitement following my previous remarks that I failed to hear you.
I have discussed this matter with the Minister for Sport and the Olympics, my hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson), who, like me, looks forward to Northern Ireland playing the fullest part in the diamond jubilee celebrations and welcoming Her Majesty to Northern Ireland later in the year.
Nigel Adams
I am grateful to the Minister, and 2012 represents a very big year in Northern Ireland, not just because of the diamond jubilee but because of the Olympics. In Yorkshire, we have managed to secure more than 30 overseas squads to use our excellent training facilities. What steps are being taken to ensure that overseas squads use the great sporting facilities in the Province?
Mr Swire
I congratulate my hon. Friend on attracting so many teams to his area. In Northern Ireland we have the Australian boxing team, the Chinese gymnastics team—which is probably capable of even greater contortions than Opposition Treasury spokesmen—and the Irish Paralympics teams, which will hold pre-games training events in Northern Ireland. For the golfers among us, we also hope that the Irish open championship will be followed in due course by the British open.
Michael Ellis
Does my right hon. Friend agree that the events of 2012 present a wonderful opportunity for Northern Ireland to showcase itself as an excellent place for tourists to visit, both from other constituent parts of the United Kingdom and from around the world?
Mr Swire
Yes, I most certainly do—2012 is the year to visit Northern Ireland, with the launch of “Your Time, Our Place” last week, before returning in 2013 for the UK city of culture. I pay tribute to my hon. Friend for his sterling work in encouraging Members to donate to his window to commemorate Her Majesty’s diamond jubilee. I did a quick ring-round of the Northern Ireland Office, and I am glad to say that I have donated—although I have not told my wife—the Secretary of State has donated and our Minister in the Lords has donated.
Glyn Davies
A visit by Her Majesty the Queen to the devolved nations can be a huge boost to their economies and, indeed, their morale. Will my right hon. Friend ensure that there is not only one visit, but perhaps more than one visit to Northern Ireland in 2012?
Mr Swire
My hon. Friend is absolutely right. The royal family are regular visitors to Northern Ireland, not least to the annual garden party. We are informed by the Palace that Her Majesty will quite rightly be visiting Northern Ireland, as she will all other parts of the United Kingdom.
Mr Nigel Dodds (Belfast North) (DUP)
Does the Minister agree that, commensurate with security considerations, it would be of great benefit in encouraging the participation and engagement of the public with the Queen’s diamond jubilee celebrations if they were given as much notice as possible of her visit to Northern Ireland? On previous occasions, such as her visit to Dublin and her engagements in London, people have been given only short notice.
Mr Swire
The right hon. Gentleman mentions Her Majesty’s historic visit to Dublin last year, and I have absolutely no reason to suppose that in her diamond jubilee year she will not be greeted in Northern Ireland with equally fulsome adulation and applause. He also mentions security. All visits by members of the royal family and other VIPs have to be handled tactfully by the Police Service of Northern Ireland, and we would certainly not try to second guess it. There is a balance to be struck, and security must be paramount.
Mr Dodds
I thank the Minister for his reply. It has rightly been said that this is a tremendous year for Northern Ireland, and not only because of the jubilee celebrations. We shall mark the centenary of the Titanic, with the opening of a £100 million visitor centre, and host the Irish open, as well as playing a part in the round-the-world yacht race. Northern Ireland will be a great place to visit. What is the Minister doing to encourage tourists coming to London for the Olympics to travel further across the United Kingdom to Northern Ireland?
Mr Swire
The right hon. Gentleman is absolutely right. The Olympics are, by definition, the London Olympics, but that does not mean that other parts of the United Kingdom should not benefit from them. He has just advertised what will be happening in Northern Ireland this year, and I would say to hon. Members and others outside the House: if you are not in Northern Ireland this year, frankly, you are no one.
Naomi Long (Belfast East) (Alliance)
I welcome the Minister’s comments about the Titanic centenary. The Titanic was built in my constituency, and we hope that “Titanoraks” from all over the globe will make their way to Belfast in 2012. What discussions has he had with the Department for Culture, Media and Sport to ensure that people are aware of the unique opportunity to experience some of the authentic history of the Titanic story? [Interruption.]
Mr Speaker
Order. The House must come to order. This is very unfair on the hon. Lady. Fortunately, she has a clear and forthright voice, but I also want to be able to hear the answer.
Mr Swire
Thank you for that, Mr Speaker. It is equally unfair on me, as I try to hear the hon. Lady’s question. She mentions the Titanic. As they say in Belfast, “She was fine when she left here”—the Titanic, that is, not the hon. Lady, who is of course fine wherever she goes. I do not feel that I need to discuss the Titanic with the Secretary of State for Culture, Olympics, Media and Sport, because I think that everyone knows that it was built in Belfast and that we are going to celebrate that fact. When people come to Northern Ireland, they should certainly go to the Titanic quarter.
Dr Alasdair McDonnell (Belfast South) (SDLP)
5. What discussions he has had with Ministers in the Northern Ireland Executive on the Welfare Reform Bill.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
I discuss welfare reform regularly with the First Minister and Deputy First Minister. We now have a once-in-a-lifetime opportunity to reform the welfare system and to tackle the problems of poverty and welfare dependency by ensuring that work pays, and is seen to pay.
Dr McDonnell
I am sure that the Secretary of State understands the concerns and fears being expressed by many in Northern Ireland, given that the report by the Institute for Fiscal Studies found that, after London, Northern Ireland will be hardest hit by the proposals in the Bill. There is a suggestion that some £600 million will be lost. Does he find it surprising that civil society and Church organisations across Northern Ireland—and, indeed, the UK generally—oppose the Bill? Will he also give me an undertaking that no one will be left homeless as a result of the reforms?
Mr Paterson
I am grateful to the hon. Gentleman for his question. The four Church leaders came to London to meet the Minister responsible for welfare reform, my noble Friend Lord Freud, who is taking the Bill through the Lords. He explained many of the details of the Bill, which, sadly, is not well understood in Northern Ireland. I see great benefits in making work pay, and we will ensure that every person, regardless of their opportunities, will be better off if they work one hour longer.
Chris Skidmore (Kingswood) (Con)
6. What recent discussions he has had with Ministers in the Northern Ireland Executive on dealing with the legacy of the past.
Lindsay Roy (Glenrothes) (Lab)
8. What recent discussions he has had on dealing with the legacy of the past.
Huw Irranca-Davies (Ogmore) (Lab)
10. What recent discussions he has had with Ministers in the Northern Ireland Executive on dealing with the legacy of the past.
The Secretary of State for Northern Ireland (Mr Owen Paterson)
Since taking office, my right hon. Friend the Minister of State and I have met the political parties and other interest groups to discuss the issue of dealing with the past, but there is no consensus. I shall meet the parties again in the coming weeks.
Chris Skidmore
I thank the Secretary of State for that answer and I welcome the progress made by the Historical Enquiries Team. Is my right hon. Friend confident that all cases will be dealt with by 2014?
Mr Paterson
My hon. Friend is quite right to comment on the HET, whose satisfaction levels have been extraordinarily high, with some 90% of families being either satisfied or very satisfied. I last spoke to the Chief Constable about this a few weeks ago and he was confident that on his current track the HET would complete on time.
Lindsay Roy
What discussions has the Secretary of State had with victim and survivor groups, how often has he met the Commission for Victims and Survivors and what have been the positive outcomes?
Mr Paterson
As I said in my opening answer, my right hon. Friend the Minister of State and I have met the local parties and numerous groups around Northern Ireland since we came to power, seeking a way forward on the issue of the past. We do not own the past, however. We can help facilitate, but ultimately the solution is very much in local hands and depends on local groups and local parties reaching consensus. Sadly, we have so far not found consensus.
Huw Irranca-Davies
Further to that helpful answer, back in November the Secretary of State said that he would meet parties to move the issue forward. Does he agree that bilateral discussions are no substitute for multilateral discussions, and will he tell us when he will make progress on bringing all the parties together to discuss this matter?
Mr Paterson
That is a very helpful question. There was a debate in the Assembly that asked me to call for talks, so I consulted the Speaker of the Assembly and decided to write to each party individually. I am not convinced that a great summit with satellite camera vans outside Hillsborough is the answer. The issue needs to be discussed soberly, quietly and privately to see whether I can find a way forward. I do not own the past—the solution must come from local politicians themselves. [Interruption.]
Mr Speaker
Order. There are far too many very noisy private conversations taking place in the Chamber. I want to hear Mr Gregory Campbell.
Mr Gregory Campbell (East Londonderry) (DUP)
Does the Secretary of State accept that part of the problem in dealing with the past and trying to get the parties around the table is that one party was party to the major problem of the past—the Provisional IRA. It will not own up to the part it played in creating the past—rather, it tries to deem everyone equal, innocent and guilty alike.
Mr Paterson
I am grateful to the hon. Gentleman for his question and he touches on the problem of arriving at uniform consensus. We were elected on a platform of no more costly and open-ended inquiries, because we do not like the asymmetry of applying an extraordinary intensity of effort and expense to a very small number of cases. That is why I am trying to find a broader approach, working with all local parties.
Guto Bebb (Aberconwy) (Con)
7. What assessment he has made of the work of the Independent Commission for the Location of Victims Remains; and if he will make a statement.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
I commend the work of the Independent Commission for the Location of Victims Remains, which has to date located nine of the 16 disappeared. The commission is information-driven and is committed to investigating any further information it receives regarding the remaining seven disappeared.
Mr Swire
If my hon. Friend looks at the early-day motion, he will see that we and the Irish Government remain committed to the work of the ICLVR. We pay tribute to the two commissioners, Sir Kenneth Bloomfield from the British side and Frank Murray from the Irish side. They have done sterling work and they are in stand-by mode. We are determined to continue this work, if the information is available, to, we hope, bring some resolution to the families who have lost their loved ones.
Lady Hermon (North Down) (Ind)
Can the Minister of State confirm that the commission continues to search for my young constituent, Lisa Dorrian, who was murdered and disappeared by those with loyalist paramilitary connections several years ago and who remains unfound? Can he give closure to her family?
Mr Swire
I suspect that the only thing that can give partial closure to the hon. Lady’s constituents is the location of this individual. I am not certain whether the hon. Lady has signed the early-day motion, but if she has not I urge her to do so. Clearly, if the information is there the ICLVR will act on it, and it will be properly resourced so to do both by ourselves and by the Irish Government. We are absolutely determined that we will work our way through as many of the missing as we can, but I stress that this is an information-led process and we urge anyone and everyone with any information to bring it before the two commissioners.
Nia Griffith (Llanelli) (Lab)
Q1. If he will list his official engagements for Wednesday 25 January.
The Prime Minister (Mr David Cameron)
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in the House I shall have further such meetings later today.
Nia Griffith
The Prime Minister frequently claims that he is not complacent about the tragedy of youth unemployment, so can he tell the House why his youth contract scheme still has not started?
The Prime Minister
The youth contract scheme is going to make a big difference to young people because it will, over the coming years, have 160,000 places for people in private sector firms. That will be far better than the failed future jobs fund, which in some cases had more than 97% of its jobs placed in the public sector. It will be up and running this year and it will make a big difference to young people.
Mrs Eleanor Laing (Epping Forest) (Con)
Today is the anniversary of the birth of the great Scottish poet Robert Burns. Does the Prime Minister agree with Burns’s impassioned plea for the unity of our nation in his poem, “The Dumfries Volunteers”,
“Be Britain still to Britain true,
Amang oursels united;
For never but by British hands
Maun British wrangs be righted!”?
The Prime Minister
I am grateful to my hon. Friend for her question, and the point she makes is a good one. Burns night will be celebrated not just across Scotland but across the whole of the United Kingdom and in many parts of the world. When I hear the Scottish nationalists, who are so keen to leave the UK yet so anxious about having a referendum, I think that perhaps they should remember Burns’s words when he referred to the
“Wee, sleekit, cowrin, tim’rous beastie,
O, what a panic’s in thy breastie!”
Edward Miliband (Doncaster North) (Lab)
We are 18 months into the Prime Minister’s Government, and today’s figures show that our economy is not growing but is shrinking. What has gone wrong with his economic plan?
The Prime Minister
These are extremely difficult economic times and these are disappointing figures—although they are not unexpected, because the Office for Budget Responsibility forecast a small decline in gross domestic product at the end of last year. I will be frank with the right hon. Gentleman: they reflect three things. They reflect the overhang of the debt and the deficit that we have to deal with; they reflect the higher food and fuel prices that put a squeeze on household income towards the end of last year; and they also reflect the crisis in the eurozone that has frozen Europe’s economies. The forecasts for France, Germany, Spain and Italy for the end of last year forecast as great a decline, or in many cases a greater decline. This is the year when we have to take further action to get our economy moving, but the most important thing is to have a credible plan to get on top of the deficit, which has given us the lowest interest rates for more than 100 years.
Edward Miliband
People are fed up with the right hon. Gentleman’s excuses about what is happening in our economy. He blames the eurozone. Growth has been flatlining in our economy since well before the eurozone crisis—in fact, since his spending review in autumn 2010. And what has characterised the Government’s approach throughout this period? Total arrogance. In his first Budget the Chancellor painted a glowing picture of what his policies would deliver for our economy. He said that his policies would deliver
“a steady and sustained economic recovery, with…falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]
We have a shrinking economy and the highest unemployment in 18 years. How bad do things have to get in our economy to shake the Prime Minister out of his complacency?
The Prime Minister
As usual, the right hon. Gentleman writes the question before he listens to the answer. I did not just say, “This is an issue of the eurozone.” It is an issue of debt and deficit; it is an issue of squeezed household incomes—issues that are affecting many other economies. He talks about what our policy is. We remember what his policy was: “No more boom and bust”. And yet he gave us the biggest boom and the biggest bust, which we are having to recover from. There is not one ounce of complacency; that is why we are cutting corporation tax, we scrapped Labour’s job tax, we have introduced the enterprise zones, we are investing record sums in apprenticeships—[Interruption.]
Mr Speaker
Order. Both the Prime Minister and the Leader of the Opposition must be heard.
The Prime Minister
We are doing all of these things, but the Labour party has only one answer, and that is to deal with a debt crisis by borrowing more and adding to debt. That is his answer. That would wreck our interest rates, wreck our economy and make things much worse.
Edward Miliband
The Prime Minister says that there is not one ounce of complacency, but he and his Chancellor are the byword for self-satisfied smug complacency, and that is the reality. He talks about borrowing; he is failing not just on unemployment, not just on growth, but on borrowing as well. Because of his failure on growth and unemployment, he is borrowing £158 billion more than he forecast. And now we know—he said unemployment would fall; it isn’t. He said our economy would grow; it hasn’t. He said, “We’re all in this together”; we’re not. When will this Prime Minister face up to the fact that it is his policies that are failing our country?
The Prime Minister
Our economy grew last year, but the right hon. Gentleman cannot find it in himself—[Interruption.] There are more people in work today than there were at the time of the last election. But we were given—[Interruption.]
Mr Speaker
Order. The House must calm itself, and will hear the Prime Minister.
The Prime Minister
We were given a very clear instruction yesterday. At 5 o’clock in the afternoon the shadow Chancellor said that the Government should listen to the IMF and change course. At 7 o’clock in the evening the IMF told us what we should do. It said that it does not think that fiscal consolidation adds to the problem, and that
“The fiscal consolidation is part of resolving problems facing the UK economy.”
That is the truth. There are two parties in this country taking responsibility for clearing up the mess; there is one party refusing to take responsibility for causing the mess.
Mr David Ruffley (Bury St Edmunds) (Con)
Sir Fred Goodwin has recently been censured by the Financial Services Authority in its report on the RBS shambles. Can the Prime Minister tell the House when the Honours Forfeiture Committee will be sitting, to consider stripping this man of his ill-deserved knighthood?
The Prime Minister
The forfeiture Committee will, as I understand it, be meeting this week, and it will be considering all the evidence—including, as I have said before, the Financial Services Authority report on RBS and what went wrong, and who was responsible for what went wrong.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Q2. It seems, Mr Speaker, that the SNP gets more reaction from Labour than their own Leader does. Does the Prime Minister agree that in Scotland the people are sovereign, and therefore for improvement they have the right to determine their own constitutional future as they see fit?
The Prime Minister
Of course this is an issue for the people of Scotland, and I think we should bring forward the date when we put to the Scottish people the question of whether they want to stay in the United Kingdom—which I dearly hope that they do—or to leave the United Kingdom. But the point that everyone needs to understand is that options for further devolution—options for changes across the United Kingdom—are matters for all of the United Kingdom, and matters that all of the United Kingdom should rightly discuss.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I put it to the Prime Minister that for Britain to commit still more funds to the IMF would, in effect, be providing a subsidy to Germany, because it is still not fully supporting its own currency, while benefiting from its depreciation?
The Prime Minister
My right hon. Friend makes an important point. Of course the IMF managing director, Christine Lagarde, is in London today, and our message has been clear: there should be no question of committing further IMF funds until the eurozone itself has shown that it is comprehensively going to stand behind its own currency. In her speech in Germany last night Christine Lagarde made it absolutely clear that the IMF’s role is to support countries, not currency zones, and the Government support that position.
Edward Miliband
Last September the Prime Minister said about his flagship health Bill:
“we have the Royal College of GPs, the physicians, the nurses and people working in the health service supporting the changes we are making”.—[Official Report, 7 September 2011; Vol. 532, c. 352.]
Will he give the House an update on the support for his Bill from the medical profession?
The Prime Minister
I have certainly learned that when it comes to the NHS you should always expect a second opinion—or conceivably even a third opinion.
The point is this: there are thousands of GPs throughout the country who are not just supporting our reforms, but actually implementing our reforms. Let me give the right hon. Gentleman just one example of a supportive GP, who happens—[Interruption.]
Mr Speaker
Order. Hon. Members should not be yelling out. The question was asked, the answer will be given, and the answer will be heard.
The Prime Minister
I think they want to hear from this one particular GP, who hails from Doncaster. When he was the acting chairman of the Doncaster GP commissioning group, he said:
“Becoming one of the first national pathfinder areas is a real boost for Doncaster.”
I think that what is good for Doncaster is good for the rest of the country, too.
Edward Miliband
How out of touch is the Prime Minister with what is happening in the NHS? Let me tell him what the medical profession is saying. The latest survey of the Royal College of General Practitioners says that 98% of GPs want the Bill withdrawn. The Royal College of Nursing has said:
“the turmoil of proceeding with these reforms is now greater than the turmoil of stopping them”.
In his famous listening exercise, the Prime Minister said:
“change—if it is to endure, to really work—should have the support of people who work in our NHS. We have to take our nurses and doctors with us.”
If he wants to hear the voice of doctors and nurses across our NHS, why does he not listen?
The Prime Minister
The right hon. Gentleman seems to be out of touch with what is happening in Doncaster. He asks what is happening in the NHS. Let me tell him what is happening in the NHS: 4,000 extra doctors since the election; 100,000 more patients treated since the election; in-patient and out-patient waiting times lower than they were at the election; and £7 billion of the £20 billion already saved. At the same time, we have got hospital-acquired infections at their lowest ever level. That is what is happening in the NHS, but if we listened to him, we would be cutting spending in the NHS and scrapping reforms of the NHS, and the NHS would be getting worse, not better.
Edward Miliband
I shall tell the Prime Minister what is happening in the NHS: waiting lists up, morale down. What does the majority-Conservative Select Committee on Health say about his reorganisation? It says that it will be a
“disruption and distraction that hinders the ability of organisations to”
release savings.
Let us be frank: this is a Bill that nobody wants. It is opposed by doctors, nurses and patients. Before the election the Prime Minister said, “No more top-down reorganisation.” Is it not time he kept at least one promise, put aside his pride and arrogance, and dropped this unnecessary and unwanted Bill?
The Prime Minister
I know that the Leader of the Opposition panics and backs down the first time a trade union says no, but this Government do not. Of course if you introduce choice, transparency and competition and say that the private and voluntary sectors should play a greater role you face a challenge, but that is what doing the right thing is sometimes all about. Let him remember what his party’s Health Secretary said about GP commissioning:
“That change will put power in the hands of local GPs to drive improvements in their area, so it should give more power to their elbow than they have at present. That is what I would like to see”.—[Official Report, 16 May 2006; Vol. 446, c. 861-62.]
What a shame they talk about it in government, but do not have the guts to face down opposition when they are in opposition.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Following the death of 167 workers in the Piper Alpha disaster in the North sea, this country developed a world-leading safety case regime for offshore oil and gas, which is now threatened by regulations from the European Union. Will the Prime Minister use his best endeavours to back his Department of Energy and Climate Change in persuading the rest of the EU that what we need is not more regulation, but a— [Hon. Members: “Derogation?”] No—I am sorry Mr Speaker. What we need is not regulation, but a directive, which can be implemented flexibly.
The Prime Minister
My hon. Friend makes a very important point. I well remember the Piper Alpha disaster and the huge suffering and loss of life it caused. Since that day, we have put in place what I agree is a world-leading system of regulation, and I shall do all I can to support the Secretary of State for Energy and Climate Change in making sure that we get a result in Europe that means we can go on with the right regulations for the North Sea.
Mr William Bain (Glasgow North East) (Lab)
Q3. On 2 May 2010 the Prime Minister said that“The test of a good society”was how it cares for the frail and the vulnerable, adding that that was“even more important in difficult times.”Will he not be offending the basic sense of decency of the British people if he persists next week with proposals to take away up to £94 per week in employment and support allowance from up to 7,000 recovering cancer patients across the country?
The Prime Minister
What our plans envisage is more people with cancer receiving the higher level of benefit and fewer people having to have the face-to-face interview. That is the case. As the hon. Gentleman knows, there are two types of employment and support allowance. Those in the support group get that money for ever—for as long as they need it and as long as they are unable to work. Many people with cancer go straight into that group, and quite right too.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Q4. I know that my right hon. Friend is aware that the Coryton oil refinery in my constituency went into protective administration yesterday. Although the future is uncertain, it is by no means bleak. Does he agree with me that what is needed now to protect the 1,000 jobs the refinery provides is the full support of the customers and the suppliers, and accurate reporting of the situation? Will he agree to ensure that I meet all the relevant Ministers to discuss what further action the Government can take to secure the future of that important business?
The Prime Minister
My hon. Friend is right to raise that case and to mention the importance of the role played by the customers and the suppliers. I shall certainly make sure that he meets Ministers as appropriate. The key is the role of the administrator, which has made it clear that its immediate priority is to continue to operate the refinery operations at Coryton and the other Petroplus sites in the UK while the financial position is clarified and all the restructuring options are explored. We are confident that the administrator is doing all it can, but we will keep on the case.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Q5. The existing UK controls on the movement of terrorist suspects lapse today, including in the case of suspect CD, of whom Mr Justice Owen said at his appeal last year that relocation was a “necessary and proportionate measure to protect the public from…an immediate and real risk of a terrorist-related attack.” Will the Prime Minister tell the House why his Government supported the relocation power at the court hearing last year, but have since legislated to remove it and to give suspect CD and others like him the freedom to come to London in the run-up to the Olympic games?
The Prime Minister
I think that most people across the House realise that the control order regime needed to be reformed, as it did not have public confidence, nor did it have the confidence of many people in the police and security services. We have reformed it, and we have worked with the police and security services. We have put in all the resources that they believe are necessary to make sure that our country is kept safe.
Nigel Adams (Selby and Ainsty) (Con)
Q6. Following the renewable energy subsidy review, will the Prime Minister assure taxpayers that the Government will focus their support on technologies that are cost-effective and reliable, such as biomass, rather than inefficient, costly, large-scale onshore wind farms?
The Prime Minister
My hon. Friend will know that the consultation on the renewable obligation banding review has just closed. It proposed targeting only the most cost-effective onshore wind farms, recognising that that is now one of the mature and cheaper technologies. We should, as he says, increase support for an expansion in sustainable biomass generation, which is reliable and cost-effective, and will help us to meet our renewables target.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
On Friday, Holocaust memorial day commemorates the liberation of the concentration and extermination camp at Auschwitz-Birkenau. What can the Prime Minister do to ensure that all of our society understands the depravity of the era of Nazi evil and learns the lessons of it for the present?
The Prime Minister
The hon. Lady, who has a long record of supporting this cause, speaks for the whole House and the whole nation in raising it and stressing its importance. I met representatives of the Holocaust Educational Trust yesterday and I met a holocaust survivor, whose story was truly inspiring about what he had seen and gone through as a young boy—and then his coming to Britain and becoming an Olympic and Commonwealth contender. It was a fantastic story. We need to make sure that these stories are told in all our schools, right across the country. That is the work of the Holocaust Educational Trust, and it is work that I strongly support.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
Q7. Is the Prime Minister aware that for the whole of Lancashire, average household income after tax is a little above £26,000? Yes, my constituents want a fair deal for those who deserve benefits, but they also want a fair deal for those who work and pay for benefits.
The Prime Minister
My hon. Friend speaks for many people. We say that the proposal for a cap on benefits of £26,000 is fair. It allows people to receive £500 a day—[Interruption]—a week. His constituents, and many other constituents, ask themselves, “Is it right that my hard-earned taxes, when I am earning less than that, are going to support people on benefits?” I have to say how disappointing it was that, after the Labour party said that it would support a cap—the announcement was made on the BBC—it voted against it in the other place. What a complete act of hypocrisy!
Lisa Nandy (Wigan) (Lab)
Following today’s media reports, will the Prime Minister explain why ministerial advisers and senior civil servants continued to attend networking events with lobbyists who paid several thousand pounds to attend, despite the fact that the Cabinet Office deemed that to be a breach of the civil service code, and had previously issued a ban on attendance?
The Prime Minister
The point that I would make to the hon. Lady is that, unlike the position under the previous Government, there is now a proper system for declaring the interests of special advisers and Ministers. That used not to be the case: it is now the case.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Q8. My right hon. Friend will have noted that the Government’s proposed benefits cut excludes war widows, the disabled and those claiming working tax credits. Does he not agree that my constituents on the Lancashire wage to which my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) referred deserve to know that they have a Government who are on the side of families who do the right thing and support their local communities?
The Prime Minister
My hon. Friend speaks very powerfully about this issue, which is why a benefit cap is fair. It is also very important to recognise that we are excluding from that benefit cap those entitled to working tax credit, as well as households with someone receiving disability living allowance. As we have always said, there will be a hardship fund, a grace period and a way of helping those families to cope with the cap, and to make sure, where possible, that we actually get people into work. The real shame is that there are so many millions of children who live in households where nobody works—and indeed, that number doubled under the previous Government.
Lindsay Roy (Glenrothes) (Lab)
Q9. The Prime Minister has said that it would be “a personal betrayal if banks failed to increase lending to businesses”.Yet last week the Bank of England stated that businesses are still not getting the investment that they need from the banks. Have the banks betrayed the Prime Minister, or has the Prime Minister betrayed businesses?
The Prime Minister
What I have done is put in place the Merlin agreement, which actually led to an increase in bank lending last year. What we now have in place is a massive credit easing programme, which the Chancellor announced in the autumn statement, that will kick in this year and make sure that banks are doing what banks ought to do in a free enterprise economy, and lending to businesses large and small.
Bob Stewart (Beckenham) (Con)
I am sure there will be families with children who may have difficulties with the new benefit regime. However, would the Prime Minister care to comment on the feelings of elderly couples who have spent their entire lives working for this country, paid into the state pension system, and are now existing on about £7,000 a year, rather than £26,000?
The Prime Minister
My hon. Friend makes a very good point. The fact is that if one looks at the figures today, there are still families in London receiving housing benefit worth more than £50,000 a year. Each one of those families is taking up the hard-earned taxes of many working people earning far less, who could not dream of living in such houses. The point that he makes about pensioners is right, and I am proud of the fact that the Government will be increasing the basic state pension by £5 a week, starting in April, because we believe in dignity and security for our pensioners in old age.
Chris Ruane (Vale of Clwyd) (Lab)
Q10. What does the Prime Minister make of the National Audit Office’s slating of his flagship Work programme? It says that the Government have totally overestimated the number of people that it will put back to work. It is not so much a Work programme as a “doesn’t work” programme.
The Prime Minister
Instead of just reading the press release, the hon. Gentleman should read the NAO report, which praises the Government for introducing a scheme in such a short time. The basic point that the NAO is making is that the Work programme is not putting taxpayers’ money at risk but putting the providers at risk, and that is a different way of doing things. It is about payment by results, getting better performance and value for money—things that his Government never provided.
Chris Kelly (Dudley South) (Con)
Q11. As my hon. Friends have said earlier, many of my constituents, like theirs, work extremely hard for modest salaries. Given that many people think that the benefit cap should be set lower than £26,000, does my right hon. Friend agree that the Opposition are completely out of touch by voting to make it higher?
The Prime Minister
My hon. Friend makes a good point. Let me remind the Leader of the Opposition what he said at the beginning of this year. On the “Today” programme, he said:
“I’m not against the cap.”
If he is not against the cap, why could he not get his Labour peers to vote for the cap in the House of Lords? What is he—weak, incompetent, or both?
Mrs Anne McGuire (Stirling) (Lab)
Q12. On 14 December I asked the Prime Minister about cutting benefits for disabled children, and he replied:“First of all, we are not cutting benefits for disabled children.”—[Official Report, 14 December 2011; Vol. 537, c. 793.]I wonder whether since that time he has checked his facts and discovered that on 12 December, two days before I asked my question, his coalition Members in the Lords voted against the protection of benefits for disabled children under the new universal credit, resulting in a loss of £1,300. I will give the Prime Minister another go. How does this fit in with “We’re all in this together”?
The Prime Minister
The right hon. Lady is wrong. The money going into universal credit for the most disabled children is not being cut. She is just plain wrong about that. But is it not interesting that all the questions that we get from all Opposition Members are always about calling for more spending? They have learned absolutely nothing about the mess they landed this country in.
Malcolm Bruce (Gordon) (LD)
British Airways has announced that it has reached an agreement to take over British Midland International. Although this is being challenged under competition rules, what assurances can the Prime Minister give that the landing slots at Heathrow from regional airports such as Aberdeen will be protected if it is allowed to go ahead?
The Prime Minister
The right hon. Gentleman makes an important point, and I am sure that it is important to his constituents as well. I will look into the issue of landing slots—I know how important it is for regional airports—and get back to him.
Mark Hendrick (Preston) (Lab/Co-op)
Q13. Why does the Prime Minister want NHS hospitals to hand over up to half their beds to private patients?
The Prime Minister
That is not what the reforms do at all. The reforms ensure that there can be some private and voluntary sector activity going on within the NHS. Before they all—[Interruption.] Perhaps the Leader of the Opposition should quieten down for a second and listen to what his own shadow Health Secretary said. He said:
“the private sector puts its capacity into the NHS for the benefit of NHS patients, which I think most people in this country would celebrate”—[Official Report, 15 May 2007; Vol. 460, c. 250WH.]
Again, that is what he said in government, but since going into opposition Labour Members have taken up a position of just supporting the producer interest, total irresponsibility and total short-termism. I stand by what you said in 2007; it is a pity you could not stick by it.
Mr Speaker
Of course, it is not my obligation to stick by any of these matters.
Priti Patel (Witham) (Con)
The Prime Minister will be aware of the brutal murder last year in Germany of my constituent, Lee Heath. The murder trial is set to start in March and will last for a good couple of months. Will the Prime Minister ensure that the Government do everything possible to support Lee’s mother, Marie Heath, in dealing with the ever increasing financial costs that she faces in seeking justice for her son?
The Prime Minister
My hon. Friend is absolutely right to raise this case. First, may I offer my sincere condolences to Marie Heath and her family following the tragic death of her son Lee last year? I know what a distressing time this will be for them as they travel for the trial in Germany. The Foreign Office will do everything it can to support Marie and her family. I have to say that I have been quite impressed by what the Foreign Office does in cases like this. I think that it shows sympathy and understanding, and I will make sure that that is carried through in this case as well.
Graham Stringer (Blackley and Broughton) (Lab)
Q14. Twenty-five per cent. of our constituents suffer from musculoskeletal diseases. The National Audit Office and the Public Accounts Committee believe that we could get better outcomes for those people at lower cost if a clinical director was appointed to co-ordinate things in the NHS. Will the Prime Minister agree to meet charities representing those people, with me, in the near future?
The Prime Minister
I will certainly look carefully at the case that the hon. Gentleman makes. One of the points of the NHS reforms that is perhaps not yet fully understood is the idea of having public health budgets properly ring-fenced, properly funded and with properly employed directors of public health in each area, which will help in many of these areas.
Chris Skidmore (Kingswood) (Con)
My constituents in Kingswood entirely agree with the Government’s proposed benefits cap. They believe that no one should earn more in benefits than hard-working families earn. Does the Prime Minister not agree that it is a damned disgrace—[Hon. Members: “Oh!”]—that the Labour party is opposing and trying to wreck this important measure?
Mr Speaker
Order. Moderation in the use of parliamentary language—and, indeed, the use of parliamentary language— is much to be preferred.
The Prime Minister
My hon. Friend makes a very important point. This is an important decision that the House of Commons has to make. We were told that the Labour party would support a cap on benefits—Labour Members have said that repeatedly—yet when the challenge comes they duck it and refuse to support the cap. [Interruption.] They will have another chance when the legislation comes back to this House—[Interruption.] It is no good the Leader of the Opposition shaking his head. His own peers voted against the cap in the Lords. People in this country will not understand why they are taking that position.
School Buildings (Runcorn)
(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Derek Twigg (Halton) (Lab)
This petition comes about because the Government cancelled the Building Schools for the Future programme, from which my constituents in Halton would have significantly benefited in terms of their schools. One of the schools that lost out, which would have had a brand-new building as a result of Building Schools for the Future, was the Heath school in Runcorn. There are 266 petitioners, and the petition reads as follows:
The Petition of parents, staff and students at The Heath School and others in their community.
Declares that the petitioners are concerned about the poor state of the school's buildings and accessibility for disabled people, and the small size of the classrooms, when considering future school capital spending allocations.
The Petitioners therefore request that the House of Commons gives consideration to any motion expressing concern at poor built environment in some schools, and requests that the Leader of the House and the Back Bench Business Committee schedule a debate on school buildings and facilities, and school capital expenditure.
And the Petitioners remain, etc.
[P000996]
Points of Order
(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Natascha Engel (North East Derbyshire) (Lab)
On a point of order, Mr Speaker. The Backbench Business Committee, at its meeting yesterday, decided to amend tomorrow’s business slightly to include a pre-EU Council topical debate at the beginning of its proceedings. Unfortunately, this means that we have had to postpone the presentation of a report by the Chair of the Public Administration Committee.
Mr Speaker, could you give me some advice? Given that the Backbench Business Committee is unable to make an emergency business statement to inform the House of this change of business at such short notice, how do I best go about doing so?
Mr Speaker
As I would have expected, the hon. Lady has provided her own salvation. The information is on the record and the House is grateful to the Chair of the Backbench Business Committee.
Caroline Flint (Don Valley) (Lab)
On a point of order, Mr Speaker. This morning the Government lost their appeal against a High Court ruling that the cuts to solar tariff payments are legally flawed. The Government have spent at least £66,000, cost social housing providers perhaps at least £1 million and created even more uncertainty, putting thousands of jobs at risk. Have you have received any indication at all from Ministers at the Department of Energy and Climate Change that they intend to come to the House and make a statement, explaining how they plan to clear up the mess that they have created?
Mr Speaker
The short answer is that I have received no such indication or communication from a DECC Minister, but I just have a sense—I do not know why; perhaps it is my nearly 15 years in the House and the fact that the right hon. Lady and I came into the House together—that she will pursue the matter at DECC questions tomorrow, probably like a terrier.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a separate point of order, Mr Speaker, but one that is related to the role of my right hon. Friend the Leader of the House. I am sure that my right hon. Friend would want to fulfil his function as Leader of the whole House, and not just to be a spokesman for the Government about Government business. Would you, Mr Speaker, have a word with my right hon. Friend to explore how a hiatus such as this might be avoided in future, so that the Leader of the House might carry out his function as Leader of the whole House?
Mr Speaker
Well, it is not for the Chair to intervene in this matter, and certainly not to pronounce on it now. The hon. Gentleman has put the ball into play, and I rather imagine that it will be returned, probably before long. Whether it is returned with interest, topspin or slice, I do not know, but I imagine that the ball will be returned.
I have regular and very constructive and convivial discussions both with the Leader of the House and—[Interruption]—no, not with alcohol—with the shadow Leader of the House, and I intend that those discussions will continue. I bear in mind the point that the hon. Gentleman has made.
John Woodcock (Barrow and Furness) (Lab/Co-op)
On a point of order, Mr Speaker. Is it in order for the House to read the detailed contents of an important statement on charging heavy goods vehicles, including a direct quotation from the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), in selected newspapers before the statement is laid before the House? Do you, Mr Speaker, think that that tactic might have something to do with the fact that the statement itself shows that the Government are breaking the coalition agreement by proposing to increase charges on more than 28,000 British lorry drivers, a fact that was strangely absent from the briefing to the newspapers? What can be done about that?
Mr Speaker
It is, of course, perfectly in order for a written ministerial statement to be laid, and I gather that such a statement has been laid today. That is, of itself, a legitimate vehicle for informing the House of ministerial decisions and other matters. However, and this is a very important caveat, the contents of such statements should not be released—I emphasise, should not be released—under any circumstances that I can imagine to the media before being made available to Members.
I should just underline the very basic doctrine of ministerial responsibility to Parliament, because I know that it is sometimes said in such circumstances by a Minister that “the Minister did not do any such thing.” Ministers, I know, will accept that they are responsible for everything that is done in their Departments by officials and by special advisers. That is the situation, and this should not happen.
Statements of Taxation
(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ben Gummer (Ipswich) (Con)
I beg to move,
That leave be given to bring in a Bill to require the Chancellor of the Exchequer to issue annually to each payer of Income Tax and National Insurance a statement detailing the payments made in the most recent tax year, the estimated payments to be made in the following tax year and a breakdown of the areas of government spending on which the payments are to be spent; and for connected purposes.
What I propose is very simple: the Government should tell us how much we pay in tax and where it goes. They should do so as close as possible to the Chancellor’s Budget statement and at the end of the tax year. Her Majesty’s Revenue and Customs should provide to each person who pays income tax and national insurance a statement to that effect.
The statement would provide two sets of information. First, it would give an account of the direct taxes—income tax and national insurance—paid by the person in the tax year just gone, and an estimate of what will be taken from that taxpayer in the year ahead. In that way, each taxpayer may see how the Chancellor’s Budget and any previous financial statements have affected their net income. The second set of information provided by the statement would be a detailed description of how the person’s tax is spent in simple cash terms in pounds and pence.
If we take as an example somebody on average earnings of about £26,000 a year, the tax statement would explain that their total direct taxes come to about £6,000, of which a little over £2,000 goes on benefits and pensions, £1,000 on the NHS, about £830 on education and so on. Even in the space of one piece of paper, it is possible to give quite a precise level of detail to the taxpayer. In this instance, it would show that £69 goes on railways and £17 on immigration and border control.
I propose that the tax statements should carry two additional pieces of information. First, each person’s share of the national debt should be itemised, as should their share of any deficit or surplus in the tax year. With that, there would be an item for debt interest, which for our average earner would be £404 for last year. Secondly, a list of taxes not included on the statement should be given, such as value added tax, tobacco duties, council tax and capital gains tax. I propose that the Government provide a web-based ready reckoner that allows people to calculate an estimate of their contribution through such indirect taxes. Taken with their tax statement, that would furnish each taxpayer with a good account of how much money they surrender to Her Majesty’s Treasury and what Ministers do with that money on their behalf.
The operation of the new tax system would be straightforward. Almost all end-of-year tax information, whether in the form of P60s or tax returns, is now provided online. HMRC therefore already possesses the individual tax contributions for almost all taxpayers. I propose that the general ratio by which each individual figure is broken down be determined by the Office for Budget Responsibility, in collaboration with the Office for National Statistics. Both organisations should be charged with the independent task of generating the analysis on which each tax statement is based. Again, that need not be complicated. The data are already published by Government and I propose that local authorities should be required to submit to the OBR their annual budgets, so that it can make forecasts of total public spending on services with the same level of detail as it can with out-turn figures for the year past.
The generation and presentation of the tax statement would be no more complicated than for the individualised direct mail campaigns waged by our high street and supermarket stores. Private quotations supplied to me suggest a cost of about 25p per taxpayer should the statement be printed and posted. That would translate to a total cost of about £7.5 million. That figure could and should be substantially reduced by combining the tax statements with one of the many other letters that taxpayers receive from HMRC. I see no reason why the whole enterprise should not be sponsored and why advertising space should not be provided on the envelope to offset the cost. On the format of the tax statement, it is of paramount importance that it is written in clear, neutral and uncomplicated language so that it is comprehensible to all.
It is a measure of how confounded our democracy has become that this simple, easy and cheap idea may be seen as in any way radical. We would not for a moment think of paying a bill in a supermarket or of setting up a mobile phone direct debit if we did not receive an itemised receipt in exchange. Yet for tax, the largest outgoing for most people, we get nothing—no total account of how much we have paid and no detail of where it has gone.
The Government’s hard work to simplify the tax code and their plans for tax transparency are to be welcomed. We should be aware, however, of how far other countries have proceeded. In France, it has long been established that the Finance Minister writes to taxpayers to tell them the total figures on how their taxes are spent. The state of Iowa, in its Taxpayer Transparency Act, mandates the Government to permit taxpayers to receive an online receipt for their state contributions. In April last year, the Obama White House introduced a federal tax receipt, again online, which allows taxpayers to type in their various Medicare, federal income tax and social security contributions and to receive a personal receipt similar to that outlined in my Bill.
While I recognise the value of online calculators, there can be no substitute for something that lands on the doormat at the same time across the country and corresponds with our entire tax paid. It would, in a way, be a national water cooler moment. That we do not have that at the moment, and that we even find the concept surprising, tells us all we need to know about the growing distance that separates Government and people. We must be honest with ourselves. As Government spending has grown ever larger and more complicated, and when the balance of tax and borrowed pounds has moved from defence to the myriad arms of the welfare state, Government expenditure has become ever more opaque.
That has suited the political ends of many who have sat in this Chamber. Without intending it to be so, the political classes have perpetuated a subtle collective fraud on the people who pay the Government’s bills. We have taken taxpayers’ money and distributed it with no explanation of what that means to each individual taxpayer. We have talked in millions and billions, and now trillions—a language comprehensible only to economists and Treasury mandarins which very few taxpayers and, to be frank, very few of us can relate to, let alone understand. As a result, we have forced people to question not how their tax is actually spent but how they believe it has been spent. How many times have each of us been told on the doorstep that all our money goes to Europe, or Africa, or Trident? Armed with a tax statement, taxpayers would have a precise and accurate understanding of how their tax pounds are really spent.
By transparency we will achieve accountability. Let us imagine how voters could more easily engage in the important debates that we are having in this and in another place on welfare reform, on pensions and on reducing the deficit if they knew about the relative distribution of their taxes, and in a tangible form. Knowing that he pays something like £800, and rising, towards pensions, our average earner would have a firmer grasp of the arguments made in this place about how pension reform is so badly needed. This one piece of paper could make Parliament more responsive to voters’ demands while helping the Government better to explain the spending decisions they have chosen to make. Such an improvement in accountability could only strengthen our democracy because it would decrease the distance between taxpayers and their representatives, making real the results of a vote cast in a ballot box.
I therefore further suggest that the Office for Budget Responsibility be required to assess the major parties’ manifestos at election time, at the request of those parties, in order that it may produce dummy tax statements so that voters can see the difference that their vote might make. A similar role is performed by the Congressional Budget Office in the United States, and there is no reason why it cannot be so here. In so doing, we may throw a little light on what is, for most people, the most confusing and murky period in the electoral cycle.
My Bill makes the simple proposition that we should be told how our money is spent. It would cost very little but would have a radical effect on our democracy. It would help voters to hold us—their representatives—to account and, in so doing, would go some way towards repairing our fissured democracy at a time when we representatives of the people must make increasingly difficult decisions on the people’s behalf.
Chris Bryant
Thank you very much, Mr Speaker.
I rise to oppose the Bill proposed by the hon. Member for Ipswich (Ben Gummer). He is a very charming Member of the House who has obviously made quite an impact since he arrived—although not quite so charming as to win last week’s debate in the Cambridge Union on whether the Tories have been unfairly demonised.
None the less, I say to the hon. Gentleman that there are far more important things that we should change about how expenditure is revealed to taxpayers, not least because we in this House do an extremely bad job of analysing expenditure. The Budget that we have every year is not really a budget, it is just a statement of changes to taxation. It is not a proper process whereby we start from scratch and examine every single piece of expenditure, which is what happens in every local authority in the land and in the United States of America, where there is a thorough budget process. I do not believe that there has been a vote on expenditure in this House since something like 1918. All that we do is work on the estimates, and nobody ever makes a close analysis of expenditure.
Although I am sympathetic to some of what the hon. Gentleman says about how we should explain things better to taxpayers, I believe that there are better ways to ensure that the expenditure that the House grants on behalf of the Crown is better explained to them.
My real complaint about the hon. Gentleman’s motion —it is the motion that we are debating today, not the Bill—is that it requests that
“leave be given to bring in a Bill”.
There are still 93 Bills on the Order Paper to be debated before Prorogation, and not a single one of those is scheduled for a day when the House will be sitting. Nor will his Bill be.
I simply say to hon. Members that there is a hypocrisy about how we do our legislating here. I am not saying that any individual Member is a hypocrite, simply that there is a hypocrisy about our pretending that we are actually advancing legislation. If Members want to wave the motion through, that is fine, but they need to be absolutely clear about the fact that if they had any real honesty in what they were doing, they would be calling on the Leader of the House to provide extra time to debate such Bills. Otherwise, this is nothing more than a political puff and a press release for the Daily Mail.
Kevin Brennan
Will you clarify for the House, Mr Speaker, what the position is with regard to voice and vote on ten-minute rule Bills?
Mr Speaker
The position is not materially different from the position that applies across the piece, which is that the working assumption is that the vote will follow the voice. I also emphasise to the hon. Gentleman that whether people choose to divide the House is a different matter from what they say by way of expressing opinion. There is no inconsistency there. I hope that that is agreeable to him. I did seek to explain this to the House last week, but I am happy to do so again. If he is still in interrogative mode he will no doubt come back to me, and I will very happily deal with the matter, but at this point I want to put the Question.
Question put and agreed to.
Ordered,
That Ben Gummer, Nicholas Soames, Mr Richard Shepherd, Mr Graham Brady, Justin Tomlinson, Mr Robert Buckland, Karen Bradley, Mr Andrew Tyrie, Steve Baker, Margot James, Tracey Crouch and Kwasi Kwarteng present the Bill.
Ben Gummer accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 30 March, and to be printed (Bill 277).
EU Criminal Policy
(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kelvin Hopkins (Luton North) (Lab)
On a point of order, Mr Speaker. This is a very simple point of order on the documentation for this debate. Page 2 refers to the Chairman of the European Select Committee. There is no such Committee; it is the European Scrutiny Committee. I think it is an important distinction.
Mr Speaker
It is an important distinction, and I am grateful to the hon. Gentleman for drawing it. I suspect that the hon. Member for Stone (Mr Cash), who chairs the Committee, will be even more grateful to him.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
I beg to move,
That this House takes note of European Union Document No. 14613/11, relating to a Commission Communication, Towards an EU Criminal Policy: Ensuring the effective implementation of EU policies through criminal law; agrees that the primary focus of EU criminal law should be tackling serious crime with a cross-border dimension; and further agrees that the general principles of subsidiarity, proportionality and necessity based on clear evidence must be respected when deciding whether to propose criminal sanctions to ensure the effective enforcement of EU policies.
I am glad of the opportunity to restate that the Government agree with the European Scrutiny Committee that the focus of European Union criminal law should be combating the most serious cross-border crimes. We also agree that in determining whether criminal law is required across the member states, it is critical that the general principles of subsidiarity, proportionality and necessity are respected.
The consequence of the Lisbon treaty coming into effect on 1 December 2009 is that the use of criminal law provisions is likely to increase, as they will be used to support the implementation of European Union policy in areas in which they have not been used before. However, the limits to that are not set in the communication that we are discussing, which is non-binding. Rather, they have a legal basis in the treaty, namely article 83. Paragraph 2 of that article limits the EU’s power, because it sets out that member states cannot be required to criminalise breaches of EU law unless the strict conditions in article 83 are met, and the United Kingdom opt-in will always apply. We have recently seen the first such proposal, on criminal sanctions for insider dealing and market manipulation.
Keith Vaz (Leicester East) (Lab)
The fact that we now have a specific example of where there can be co-operation means that we can extend it to other areas such as human trafficking. Does the Minister agree that in the case of specific crimes that cross borders and on which there is agreement, such as human trafficking and terrorism, we need to co-operate better with our European partners?
Mr Blunt
I am grateful to the Chairman of the Home Affairs Committee, and of course the answer is yes. Our position on human trafficking and child sex crimes has been to have opt-in, so I can confirm his point.
It appears that in anticipation of the developments under the Lisbon treaty that I have described, the European Commission is seeking to develop some principles to be taken into consideration when the criminal law is used. The Government’s position is that we will approach legislative proposals on justice and home affairs on a case-by-case basis, with a view to maximising the country’s security and protecting civil liberties and the integrity of the criminal justice system. There is nothing in the document that we are debating, which is only a communication, that changes or challenges that fundamental position.
As the House may recall, some time before the Commission communication, in 2009, the European Council agreed conclusions on model provisions to guide its criminal law deliberations. The conclusions were adopted to prevent incoherent and inconsistent criminal provisions in EU legislation, and in anticipation of the changes that the Lisbon treaty would bring.
A number of the Council’s conclusions relating to the assessment of need for criminal law are satisfactorily reflected in the Commission’s communication, most notably the principle that the criminal law be used as a last resort. The adoption of legislation in accordance with the principles of subsidiarity and proportionality is referenced, as is the need to establish necessity.
There are some things that we welcome in the detail of the communication. For example, it acknowledges the UK’s opt-in rights and clearly states that the diversity of member states’ criminal law must be respected. The use of criminal law only when it is a necessary and proportionate response to combating particular conduct is an approach that we apply in our domestic criminal legislation. We are therefore glad that the Commission’s and the Council’s statements reflect those principles.
However, there are potential concerns. The Government believe that it is essential that the Commission propose only European criminal legislation that is necessary and proportionate. Ineffective implementation of a European Union policy should not, in itself, trigger consideration of the use of criminal law.
Mr William Cash (Stone) (Con)
Bearing in mind that much of what we are considering will be governed in due course by qualified majority vote, any insistence in this House will be subject to the vagaries of that system.
Mr Blunt
Of course, what we are considering is guided by the opt-in principles in the Lisbon treaty under the relevant protocol. The emergency brake, as a final reserve position, then underwrites everything. For example, if we opted in to something at the beginning of negotiations, found ourselves outvoted by a qualified majority vote and the Government then came to a view that what had emerged was unacceptable, the emergency brake would remain available to us to prevent that criminal legislation from applying to us.
Charlie Elphicke (Dover) (Con)
To make it absolutely clear, will the Minister confirm that the EU criminal policy outlined in the document would not apply to the UK in any way, shape or form unless or until the UK chose to opt in?
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the Minister recognise, when considering an opt-in or when seeking to establish whether there is genuine necessity, the importance of engaging with the relevant Select Committee at an early stage? The Select Committees, with their specialist knowledge of subjects such as agriculture and fisheries or home affairs, have an opportunity of ascertaining whether necessity has been established.
Mr Blunt
As a Justice Minister, I would be extremely unwise not to acknowledge the merits and wisdom of the recommendation of the Chairman of the Justice Committee. My right hon. Friend makes the proper point that there is an expertise in the Select Committees that should be engaged, if possible. Much of the process sits with the European Scrutiny Committee, and we are today making recommendations that the House should consider matters. I shall, of course, leave the detail of process, and the way in which the House should do that, to my right hon. Friend the Leader of the House. However, I hear what my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) says, and I acknowledge the force of his point.
Dr William McCrea (South Antrim) (DUP)
The explanatory memorandum on the European Union document acknowledges that responsibility for criminal law matters in Scotland and Northern Ireland rests with the respective Scottish Government and Northern Ireland Ministers. It then states:
“This EM has been cleared by officials in the Scottish Government and Northern Ireland.”
Will the Minister assure me that the Minister in Northern Ireland has been consulted on the matter and that he has had sight of the document before our discussions here?
Mr Blunt
I hope that I can return later to the hon. Gentleman’s intervention and give him a full answer.
As I said, there are some potential concerns about the detail of the principles. Ineffective implementation of a European Union policy should not in itself trigger consideration of the use of criminal law. We also agree with the European Scrutiny Committee that it is primarily for member states and their Governments to ensure that citizens can have confidence that they live in a Europe of freedom, security and justice. The European Union’s primary role should be driven by stopping serious cross-border crime.
The Government welcome the further caveats that the European Scrutiny Committee considers should be placed on the communication. The first relates to the European Union not seeking to harmonise extra-territorial provisions across member states. The Government believe that requiring member states to take extra-territorial jurisdiction must be considered on a case-by-case basis, having particular regard to the conduct to be tackled and its impact. We have accepted that it is appropriate to require member states to be able to prosecute their nationals who commit certain child sex crimes or human trafficking offences anywhere in the world. However, we have not accepted European Union rules on extra-territorial jurisdiction based on the nationality of the victim of crime.
The Government also agree with the Committee that we should be cautious about European Union criminal law that seeks to define aggravating and mitigating circumstances. We accepted some aggravating factors in the context of child sex offences or human trafficking. We consider those factors to form part of the agreed minimum sanctions, and, therefore, to be permissible.
The Government are unaware of the previous use of the term “Euro-crimes”, or, indeed, its origin. It is wholly misleading. I want to state clearly that no one will ever be prosecuted under a so-called Euro-crime. The European Union can set only the minimum elements of an offence. Each will have to be implemented in the domestic law of the member states. Hon. Members will understand why the Government view the term as singularly unhelpful. For European officials to use a shorthand internally to refer to crimes about which member states have agreed to establish minimum standards is one thing. For that term to find its way into official documents is another example of jargon that allows misrepresentation and misunderstanding.
Charlie Elphicke
I am listening carefully to the Minister. I am slightly puzzled. It seems as though there will be some minimum EU standard for, for example, illicit drug trafficking. However, do not we already have criminal laws in this country that apply to such matters? What would a European dimension add?
Mr Blunt
My hon. Friend is correct. However, when it is decided that the principles that we are considering merit the European Union’s taking action—as we have done with child sex offences and human trafficking—we will want to take the opportunity to opt in to EU legislation. That is why we will continue to make the judgment case by case. If it were decided, in the case to which my hon. Friend referred, that there was merit in acting at European Union level, we would doubtless do so. Of course, there could be cases where we felt that our standards were adequate but that our interests were being damaged in other parts of the European Union because drug trafficking was happening that affected our interests, and was not being properly policed. There are therefore circumstances, particularly with cross-border offences, in which there is merit in considering the matter.
The European Scrutiny Committee also asked for the Government’s view of the third sentence of the communication, which states that a
“EU Criminal Policy should have as an overall goal to foster citizens’ confidence in the fact that they live in a Europe of freedom, security and justice.”
The Committee took exception to that as being implausible and unwarranted because the European Union’s role is “helping” member states to stop crime. We agree and note that article 84 makes it clear that the European Union has only a supporting role in crime prevention. It cannot harmonise member states’ laws, except to the very limited extent in articles 82 and 83, which permit setting only minimum standards.
Our aim is to try to ensure that, when the European Union legislates on criminal law, there is convincing evidence that the offending activity constitutes serious and cross-border crime, and that there is consensus that the nature or impact requires common action. I therefore conclude by reiterating our view that it is essential that European Union criminal legislation is proposed only when necessary and proportionate.
It only remains for me to reply to the intervention of the hon. Member for South Antrim (Dr McCrea). Of course, the views of the devolved Administrations are taken into account in opt-in decisions that the United Kingdom then makes.
Mr Andy Slaughter (Hammersmith) (Lab)
It is a pleasure if not a luxury to have so much time on the Floor of the House to discuss a communication from the Commission to the European Parliament. It appears to have pride of place in Government business for the House this week.
Mr Speaker
Order. I very gently point out to the hon. Gentleman that no fewer than seven Back Benchers wish to speak in the debate. I feel certain that he will tailor his contribution accordingly.
Mr Slaughter
I started at a leisurely pace, Mr Speaker, and perhaps you anticipated that I would continue at such, but I take the hint. We have only an hour and a half, but I will not take that much time.
EU criminal policy is a significant topic and in other circumstances it could provoke lively and controversial debate, but I suspect it will not do so today for a variety of reasons. First, the document is only a communication—it opens the door to communication rather than decides its outcome. As the Minister has said, it is non-binding. Secondly, there are rightly so many caveats, conditionalities and reservations in the UK position on EU criminal policy that any controversial proposal could be effectively filtered at one stage or another.
The European Scrutiny Committee concedes that in supporting the Government’s cautious approach, and in appearing to take principal exception to the language of the document. I do not want to be drawn into a discussion of the linguistic inelegance of “Euro crimes” or whether the EU should have the temerity to express its wish to foster freedom, security and justice. Those are peripheral issues.
The third reason why I believe this is an uncontroversial proposal is that there has been—even on the Lisbon treaty and the criminal justice decisions flowing from it—broad consensus between the parties. That remains, and the Opposition do not intend to press the motion to a Division.
On the substance of the Commission document, we are pleased to note the emphasis that the Commission places on respecting the general principles of subsidiarity, necessity and proportionality in its memorandum. Those should be at the forefront of the Commission’s mind in deciding whether to propose criminal sanctions to ensure effective implementation of EU proposals. That was the intention of the Lisbon treaty and the exemptions that the previous Government negotiated.
The previous Government were clear at the time of the Lisbon treaty that EU co-operation on criminal justice and policing should not affect fundamental aspects of our criminal justice system. The extended opt-in arrangements that we secured at the time mean that we have complete choice on whether to participate in any justice and home affairs measure.
As each proposal for new EU JHA legislation comes forward, we urge the Minister to consider carefully whether it is in British interests to participate. From the “Report to Parliament on the Application Of Protocols 19 and 21”, which was released this week, we see that the Government have operated in exactly the way we envisaged when negotiating the opt-in. The document makes it clear that:
“Over the past year, the Government has taken 17 decisions on UK participation in EU JHA legislative proposals. In total the UK has opted in to nine proposals…including one decision to opt in to a measure post adoption…The Government…decided to not opt in to eight proposals.”
The Opposition do not always agree on individual proposals—we did not agree with the Government’s decision on the right to a criminal lawyer—but we agree on and indeed instigated that opt-in process.
In any event, and as the Minister has acknowledged, there is a recognition by the Commission that EU intervention in criminal justice is a sensitive matter, hence the emergency brake, the two-step approach and the fact that additional “Euro-crimes”—if I may use the shorthand—will be added only by unanimous decision. It is clear that that is a matter of last resort.
There is broad agreement on areas on which it is important to act on a European level. The Opposition support co-ordinated action to tackle organised crime and terrorism, and to provide greater protection for children and ensure the security of our borders. Such co-operation continues to be driven by the challenges we face today. Tackling crime, countering terrorism and securing our borders are not issues of mere domestic concern; they have an international dimension. We need to work with our allies in the EU to ensure that we achieve our objectives.
As the European Commission states in the document:
“In view of the cross-border dimension of many crimes, the adoption of EU criminal law measures can help ensure that criminals can neither hide behind borders nor abuse differences between national legal systems for criminal purposes.”
There are more contentious matters than this one, such as the European arrest warrant, which the House debated relatively recently. The Opposition hope that the incremental approach continues. A clear example of that—on insider trading, insider dealing and market abuse—is given in the bundle. The Government, in commissioning a report to look into that matter, are taking a sensible line. That is a good example of a matter on which legislation might assist the Government and the country, because we have taken steps when other European countries have not done so.
On that basis, I shall bring my remarks to a close to allow other Members to take part in the debate. I welcome the opportunity to debate these matters, but there is little controversy on the principle, even if controversy on individual decisions to opt in remains.
Mr William Cash (Stone) (Con)
We have just heard a breathtaking example of complacency from the Government—sorry, I mean the Opposition. I say that because, unfortunately, the manner in which this issue is being approached, and the reason why the European Scrutiny Committee thought this matter should be debated, is very simple. We have heard reservations expressed so far by the Minister and shadow Minister, but they do not take express account of the fact that once a communication has got going—particularly a communication under the aegis of the Lisbon treaty—we effectively open the door to considerable, radical proposals for the expansion of European criminal law.
I am glad the Minister made the comments he made and I endorse all of them. I am also glad he agrees with the Committee on a wide range of matters, particularly the nomenclature and the phrase “Euro-crimes”. However, this is a substantial issue. The document that was presented to us by the Commission concludes that
“the new legal framework introduced by the Lisbon treaty … considerably enhances the possibility to progress with the development of a coherent EU Criminal Policy which is based on considerations both of effective enforcement and”—
it claims—
“a solid protection of fundamental rights. This communication represents a first step in the Commission’s efforts to put in place a coherent and consistent EU Criminal Policy by setting out how the EU should use criminal law to ensure the effective implementation of EU policies.”
It could be no clearer than that. That is the intention, and believe me, it is the direction and the line of route.
Other hon. Members will no doubt deal with other matters arising from that, but as Chairman of the European Scrutiny Committee, I want to explain why we insisted that this matter should be debated. The Committee recommended the document for one simple reason: the communication outlines how a supranational organisation intends to pass criminal legislation that will have a direct impact on our citizens. This is indeed a sensitive area, as the enactment of criminal law is traditionally the domain of sovereign legislatures.
In the conclusion to our report, we noted the emphasis in the communication that the Commission places on respecting the general principles of subsidiarity, necessity based on clear evidence, proportionality, including the principle of ultima ratio—in other words, criminal law as a means of last resort—and the legal traditions of the EU member states when deciding whether to propose criminal sanctions to ensure the effective implementation of EU proposals. Those words are welcome, but we wait to see whether they are respected. Evidence to the contrary is abundant in relation to matters of this kind. That is because the manner in which it is proposed to move down the route of criminal law—albeit under the Lisbon treaty, which my party opposed tooth and nail during its enactment—relies heavily on the fact that there is a desire among many people in the European Union to have one country, which, by its very nature, means they would prefer to have one European criminal law policy. There is therefore a direct contradiction between the manner in which the proposals are being made and the words used. We argue that we should wait to see whether the suggestions that lie behind the Commission’s statements are respected.
We are gratified by the Government’s reaffirmation that any EU action in the field of criminal law will have to be justified on the basis of robust evidence, as well as demonstrating why lesser administrative penalties are not appropriate. The Committee intends to hold the establishment to strict account on that question. We also support the Government’s cautious approach to the Commission’s communication, but we add further caveats of our own. The European Union should not seek to harmonise the traditional rules on extraterritorial criminal jurisdiction in member states. The UK does not assert extraterritorial jurisdiction over those who are “habitually resident”—an expression that has found its way into EU criminal legislation—in this country. The EU should also refrain from defining “mitigating and aggravating circumstances” for the commission of crimes, which is best left to the discretion of the sentencing judge. Furthermore, the expression “Euro-crimes”, which is used in the communication for the 10 offences listed under article 83.1 of the treaty, is inappropriate and misleading. We ask the Government to do their utmost—in fact, we would go so far as to insist that they do this—to ensure that the term does not enter the EU’s lexicon. Indeed, I was extremely glad to hear what the Minister had to say about that.
The other point is that although there is the question of opt-ins and whether we are to accept the provisions, we have seen a torrent of opt-ins over the last few months, since this coalition Government came to power, and a significant number of Members of Parliament are deeply concerned about the tendency in that direction. Furthermore, in addition to the opt-ins, there is the emergency brake. We understand all that, but we have to have regard to that tendency, because of what can happen once the door is opened on that scale. In the light of what I said about what is in the mind of the Commission and others in the European Union, and about the tendency to move towards a policy of further integration, which would include criminal law, we should be not merely cautious, but extremely resistant towards any attempt to move further down that route.
Sir Alan Beith
When I was chairing the Justice Committee, I do not remember ever meeting anybody, in any justice committee in any member state, who believed that we should be working towards a single, harmonised criminal law that would replace the criminal law of member states across Europe. Is the hon. Gentleman not conjuring up a spectre?
Mr Cash
Certainly not. I am not conjuring up a spectre; I am talking about a tendency. In almost every area, the original proposals—from Maastricht, through to Nice, Amsterdam and Lisbon—have adopted a minimalist approach at the beginning, but then expanded, moving further and deeper into the areas of competence that have been acquired. I am not going to dispute what the right hon. Gentleman says about what he has heard; I am merely referring to what I have observed, which is also understood by many others, including the Government.
Jacob Rees-Mogg (North East Somerset) (Con)
The ambition of the European Commission is set out on page 18 of the documents. Its ambition is not a limited extension of criminal policy; it is to have
“an important tool to better fight crime”—
that is, any crime. It is not limited.
Mr Cash
I entirely agree. Furthermore, article 83.1 sets out the following areas of crime:
“terrorism, trafficking in human beings and sexual exploitation of women and children, illicit drug trafficking, illicit arms trafficking, money laundering, corruption, counterfeiting of means of payment, computer crime and organised crime.”
It continues:
“On the basis of developments in crime”—
the broader remit under which such an extension is proposed—
“the Council may adopt a decision identifying other areas of crime that meet the criteria specified in this paragraph.”
Although article 83.1 says that the Council
“shall act unanimously after obtaining the consent of the European Parliament,”
we are talking about a process of opening up and extending those areas of domestic control over criminal jurisdiction that are likely to be transferred to the European domain.
On a final note—and to reply to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), the Chairman of the Liaison Committee—the Committee noted that the third sentence of the communication states:
“An EU Criminal Policy should have an overall goal to foster citizens’ confidence in the fact that they live in a Europe of freedom, security and justice”.
I ask the Minister to say whether he agrees with that statement. For our part, we in the Committee think it an example of dangerously ideological thinking. We are concerned that such thinking may inform future proposals from the Commission. Citizens look to their Governments to provide freedom, security and justice in their own states. To expect freedom, security and justice to flow in 27 European states under the auspices of supranational institutions may sound laudable, but in reality it is both implausible and unwarranted. We think that the Commission would have done itself a service by cutting out such a statement from a policy paper of such importance and limiting its ambitions to more practical objectives.
Keith Vaz (Leicester East) (Lab)
It is a pleasure to follow the hon. Member for Stone (Mr Cash). He and the other members of his Committee are quite right to have brought this matter before the House. Although I start from a different position on the European Union from him, I think it is vital that the House has every opportunity to discuss issues concerning Europe. I commend him on working hard to ensure that on Thursday afternoon there will be a debate before the European Council meets.
I thought that the hon. Gentleman was a little harsh on my hon. Friend the Member for Hammersmith (Mr Slaughter) when he accused him of being complacent. I have known my hon. Friend since he was 11-years-old —we were at school together. There are many ways to describe him, but “complacent” is not one of them. However, if I may digress for just one second, Mr Speaker, I used to try to avoid being in class with him, because our names were adjacent on the register, and when they were read out in quick succession—“Slaughter”, “Vaz”—it was usually my hon. Friend leading the cheers.
Anyway, back to the European Union and away from our school days. I was heartened by what the Minister said about this measure. It is important that we deal with such measures on a case-by-case basis, for the very reasons cited by my hon. Friend. The European arrest warrant, which began as a good idea, is now out of control, with hundreds of requests being made by certain EU countries—I am sure that when he gets to speak, the hon. Member for Esher and Walton (Mr Raab) will make reference to that fact. That is something that we need to guard against, so a cautious approach to the extension of criminal policy is extremely important. We have our own criminal law, and that is how it must remain, but we need co-operation with our European partners in a number of areas. I do not accept that the list read out by the hon. Member for Stone is definitive. It is a good list for us to work on in regard to co-operation on those issues with our European partners, although not necessarily in regard to legislation. The Government should bear that in mind when they approach those issues.
Kelvin Hopkins
As my right hon. Friend will have heard, there is a difference of view between the Chair of the Justice Committee and the Chair of the European Scrutiny Committee on whether this constitutes a degree of legislative creep towards an objective of unifying the legal systems in Europe. If one of them is right, we can be happy that there is no creep, but the Chair of the European Scrutiny Committee seems to think there is a degree of legislative creep involved. Which one does my right hon. Friend agree with?
Keith Vaz
I agree with both of them, because they were each making different points. We must be fair to the Chair of the Justice Committee, who is also the Chair of the Liaison Committee, because he was disputing a point of debate, not a point of fact, as to whether he had met any chair of a justice committee in any other European country who agreed with the view of the hon. Member for Stone view that one criminal law was being sought for the whole of the European Union. I have attended quite a few meetings in the European Union, and I have certainly never heard anyone say that they wanted one criminal law for the whole EU.
Keith Vaz
That clarification is helpful, but as the commissioners are not here to defend themselves, I shall try to move the debate on.
The hon. Gentleman mentioned certain crimes that are of course not Euro-crimes: terrorism, trafficking in human beings, illicit drug trafficking, money laundering, corruption and computer crime. They go beyond the borders of the European Union, but it is important that we work with our European partners to try to combat those problems. There are times when we need to act quickly—in relation to the trafficking of human beings, for example. Our last report pointed out that at least 100,000 people were being trafficked around the European Union each year, including 5,000 in the United Kingdom, and that there did not appear to be a common European Union strategy to deal with that. We do not need a new criminal law that covers all the EU countries to deal with it; we need to ensure that our structures—Europol, Interpol and others—are able to service the needs of our criminal law. We should be able to prosecute those involved in human trafficking quite happily, without having regard to what is being said in other countries. Similarly, when Turkey eventually joins the European Union, it will have to deal with the problem of illegal drug trafficking. Almost 80% of the heroin that comes into Europe comes from Afghanistan via Turkey.
We can talk about co-operation, but we need to be very careful when we talk about extending criminal law. Our systems are completely different, and I do not think that anyone in the House would accept a proposition to harmonise our criminal justice systems. We should, however, proceed in the direction of co-operation.
I hope that the Minister will also examine the question of data. People can arrive in this country and undergo checks that do not reveal that they have committed criminal offences elsewhere in the EU. Dealing with that does not require legislation; it requires ministerial co-operation and co-operation between EU countries. So if someone who had committed a criminal offence in Poland, for example, came here and was involved in activities that required that information to be made available, that disclosure should be possible. Equally, that should also apply if someone who had committed an offence here went to another part of the EU.
I welcome the Government’s approach, but I urge the Minister to be cautious, because any extension would cause us great problems. However, it is important to push forward the co-operation that exists at EU level on the entire justice and home affairs agenda.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I support the motion, and I shall preface my remarks by saying that any free trade area needs an enforceable and effective system to secure compliance with the requirements put in place to create and maintain an open market. Europe also needs to keep pace with the international, cross-border nature of a great deal of crime, and with the ease of movement that criminals enjoy. Indeed, in combating crime, Europe should take advantage of its capacity for co-operation and combined effort in order to defeat criminals and criminal organisations. All our citizens, whatever their views on the European Union, would recognise the value of that.
We cannot ignore enforcement failures in various member countries, because they often harm the interests of British businesses, which can be put at a competitive disadvantage. British farmers and fishermen can also be adversely affected by inadequate enforcement in other countries. Obviously, the converse can also be true. It is usually unhelpful, however, to add new structures and layers of law, of the administration of justice and of prosecution authorities to the well-developed national systems that exist in most member countries. I therefore agree with the motion when it mentions subsidiarity and the need for robust evidence of necessity when EU measures are to be considered.
I do not entirely share the European Scrutiny Committee’s dislike of the idea of fostering citizens’ confidence in the fact that they live in a Europe of “freedom, security and justice”. It is an important feature of the European Union that membership of it commits member states to maintaining a range of important values including freedom, justice, security and human rights. The Committee calls this an example of ideological thinking. I thought that ideological thinking was making a comeback in the Conservative party, but perhaps it is still disapproved of. I remember that during my earlier political life ideology was frowned on by the Conservatives, but then Mrs Thatcher came along with an ideology of her own. That is a byway that I shall stray no further along, however. The principal responsibility for achieving these aims rests with the member states of the European Union.
The Minister said that we were about to embark on a complex opt-out—or opt-in—process, which is relevant to what we are discussing today. Under the Lisbon treaty, the Government could opt out of everything in the home affairs and justice area. They could also opt in to everything. The more likely outcome, however, is that they will seek a negotiated package, in which we opt in to those areas where it is genuinely beneficial for us to do so without complicating our system by opting in to areas that would be inappropriate for us. I hope that the Government will share with us their developed thinking on how that will be achieved, as a great deal of negotiation will be involved.
The Commissioners tend to proceed by launching a large number of proposals; they fire off a hail of bullets, very few of which reach their target. If the Select Committees of this House were to devote time and attention to every idea that appeared in a Commission paper, we simply would not be able to get on with our work on domestic policy issues. It is therefore important for Select Committees to be able to identify those elements that would benefit from careful Select Committee attention. This is true of home affairs and justice matters, and of others.
The European Scrutiny Committee carries out an important role. It does the valuable and not always very inviting work of examining the legality and proportionality of EU proposals. However, it is the Select Committees that relate to Departments that have experience and expertise in specific policy areas. It would be unreasonable to expect the European Scrutiny Committee to know enough in any given case about whether there was a necessity justification for something and whether it was a policy direction that would be appropriate in the United Kingdom. That is the kind of work that Select Committees are expected to do.
Mr Cash
I understand that there is obviously a complementarity between the European Scrutiny Committee and departmental Select Committees. It is important, however, to reaffirm the fact that we rarely recommend a communication for debate, but on this occasion, because of the nature and coherence of the proposals advocated by the Commission on criminal policy, we thought it was a good idea at least to give it a kick-start on the Floor of the House.
Sir Alan Beith
I entirely agree with the hon. Gentleman and with the action he has taken on this matter, and I very much welcome the fact that the debate is taking place. It is certainly the view of the Liaison Committee that more attention needs to be given to developing European proposals that will, if we are not careful, only come to the House at too late a stage for us to have any significant influence on them. The work of the European Scrutiny Committee in all that is extremely valuable, but there are limits to what it can do.
In conclusion, let me remind Ministers of two things. First, we want to secure as much help as we can get for Select Committees from the UKRep staff in Brussels, who are extremely good when we go as visiting Committees in giving us advice on what is happening, what is being proposed and which of the Commission’s brainwaves is getting somewhere and which does not look likely to do so.
Keith Vaz
I fully support what the right hon. Gentleman is saying. I do not know about his Committee, but we find we are so busy that we simply do not have the time to cover European issues, and we rely heavily on the European Scrutiny Committee to alert us if anything is going wrong. One way in which we could be more involved would be if UKRep was more responsive to our work.
Sir Alan Beith
It is not so much about being responsive, because when we have asked representatives for help, they have given it. I am looking for a proactive approach. It would be very helpful if the Foreign Office gave the team in Brussels a clear indication that it would be helpful to alert Select Committees to proposals that looked like gaining traction, and would have important implications for the United Kingdom.
Secondly, of course, it is important that Ministers come to Select Committees before important Council meetings and afterwards, if it is necessary to secure a report back. The House too often finds that a set of complex documents that are extremely difficult to decipher comes before us in the General European Committees at a stage far beyond that at which it would be possible to influence or change it. We have relied unfairly on the members of the European Scrutiny Committee, whose work I again recognise as extremely important, and Select Committees have a job to do that is difficult to incorporate in a crowded work programme, so the more help we can get from Ministers and our officials to alert Select Committees to important issues that are coming up, the more effective we can be.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
The right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said one very wise and pertinent thing. It was not the only wise and pertinent thing he said, but it was one that struck me, and that was that it is almost invariably the case that it is undesirable to introduce into a mature and well-developed legal system another layer of legislation that is already covered satisfactorily by domestic legislation.
I recall that in the 1990s I had practical experience of such an occasion, when the European Union introduced its own sanctions on Serbia. It introduced a directly applicable regulation in exactly the territory on which this country had already legislated under the United Nations Act 1946. I recall that the case in which I took part challenged the domestic legislative regime on the basis that it occupied territory in which the European Union had legislated and that the two regimes, minutely analysed, could not be seen to be compatible. Not only were they not compatible in their substance, but they were incompatible in the sense that it is well-established case law in the European Court of Justice that any legislative activity by the European Union must take precedence and primacy not only in the substance of its impact and effect but in its appearance. In other words, the legislative authority of any particular action in a member state, once the European Union has legislated, must be seen to emanate from the European Union. To that extent, it is an extremely intolerant legislative authority.
That means that one must examine extremely carefully—I see that the Secretary of State for Justice is doing so as regards the market abuse framework—whether the introduction of European Union law into a sphere that is already occupied by domestic legislation will cause such a complicated unintended consequence. I recall that the Secretary of State for Trade and Industry at the time was poised with an order to lay before the House in case the Lord Chief Justice in the Court of Appeal accepted the arguments that I and others were advancing. He was ready to go that morning, because of the chaos that would have ensued had the domestic legislation been struck down as incompatible with the European Union’s legislative action.
It is extremely undesirable that that should happen and, having listened to the various balances that have been struck by the right hon. Member for Berwick-upon-Tweed, the hon. Member for Hammersmith (Mr Slaughter) and my hon. Friend the Member for Stone (Mr Cash), who is so often proved, even after many years, to be right, I prefer the analysis of my hon. Friend the Member for Stone. The Commission has a cavernous maw into which legislation is sucked into a black hole along with our rights, prerogatives and spheres of sovereignty. I am strongly concerned about the consequences for this Government if they continue with their policy of opt-ins, as was observed by the right hon. Member for Berwick-upon-Tweed a few moments ago.
When a country opts in to a sphere of competence of the European Union, it does not opt in merely to a different wording or to some dilute or mild consequence of that kind. It opts in lock, stock and barrel to the hegemony of the European Union institutions, by which I mean the European Court of Justice, the Commission and the rest of it. That might attract complacent smiles on the Opposition Benches—and even on the Government Benches—but just think of what legislative territory is already included. Firearms control—which has not been mentioned so far, but which is covered by a series of European directives—organised crime, VAT, drug trafficking and money laundering are all covered by extensive directives and directly applicable regulations. There is not a Crown court in this country that is not, as we speak, preoccupied with such trials. If we opt in, we are opting in to the jurisdiction of the European Court of Justice and enabling it to examine our procedures in our Crown courts and see whether they comply with the minimum rules that this policy will set down.
Kate Hoey (Vauxhall) (Lab)
I have listened to the hon. and learned Gentleman and I agree with everything he has said so far. Does he agree that the most iniquitous thing about all this continuing opting in and moving into an ever-closer European Union for this country is the fact that the British people have never given their permission for that to happen? Does he agree that that is what we should really be arguing for now?
Mr Cox
I do agree. The fundamental underlying principle that should exercise all Members of this House when it comes to criminal law powers being assumed by a supranational organisation is that what is or is not criminal, and what is or is not an action that puts an individual citizen of this nation beyond the pale of the criminal law, should be a matter for this House. It is to this House that citizens of this country entrust the moral judgments that underlie decisions about what should be criminalised and what should not. We are directly accountable to that citizenry, whereas the institutions of the European Union are not. That is why I have come to this debate to sound a note of caution and warning. That is also why, having listened to the different expressions of caution that have been so well made by my right hon. Friend the Member for Berwick-upon-Tweed, who chairs the Select Committee on Justice, I prefer the analysis of my hon. Friend the Member for Stone.
There is no doubt but that a vast field is already occupied by the European Union, and if we see a panoply of institutional responsibility and jurisdiction introduced into the criminal law, we will be exposing our procedures, our rules of evidence and our very jury trial itself to challenge in the European Court of Justice as not complying with the minimum rules set down. That might not happen this year or the next, but the European Union thinks in terms not just of one decade, but of decades and decades; it proceeds slowly. That is why, like Cassandra, or like Balaam’s ass, my hon. Friend the Member for Stone so often stands in our way—or indeed, like the angel that prevented Balaam’s ass from going on, he beckons to us and indicates that we would do well to think very carefully before we simply approve policies of this kind without understanding that there is an underlying caution that we should always exercise.
Mr Dominic Raab (Esher and Walton) (Con)
First, I commend the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), for coming to the House to debate this subject transparently and openly because it is one that demands scrutiny. I echo the warning in the excellent speech of my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), because today, as the Prime Minister leads efforts to scale back the overweening and often arbitrary role of the European Court of Human Rights in Strasbourg, we might well remind ourselves that prevention is better than cure.
The document before us has all the hallmarks of a massive and substantial power grab from Brussels in the area of EU criminal law. We might have ad hoc opt-outs, but the direction of travel has very serious implications for this country. The clear ambition in the document is for a pan-European code on what the Commission calls “Euro-crimes”, backed by EU penalties and jurisdiction. The document talks about giving
“full judicial control to the European Court of Justice”
in Luxembourg.
The aim is for a uniform European justice policy by any other name. One has only to look at the detail in the document, which seeks—I quote these words for the sake of accuracy, to show that this is not just scaremongering—
“approximation of definitions and sanction levels”
for serious crimes. It aims for “common minimum rules”, including common EU punishments. The document reeks of the Soviet style EU double-speak to which we have become accustomed. On one hand it accepts the national “diversity” of the traditions of justice across the continent, including our own, but in the same sentence it calls for “consistent and coherent” EU criminal law. Ultimately, that is a circle that cannot be squared.
What areas will the new Euro-crimes cover? It is one thing to call for direct practical co-operation between national authorities on counter-terrorism and serious crime, although we do not need more legislation in that regard, but the document would expand EU law into environmental crimes, employment offences, data protection, fisheries offences, traffic offences, financial market behaviour—I wonder who that is aimed at—and, of course, at the top of everyone’s list of priorities, protecting the euro.
Britain has opt-outs, but we are still affected by the massive increase in EU law in the field of justice and home affairs. With cross-party support, the House has unanimously called on the Government to renegotiate the European arrest warrant—the Chair of the Select Committee on Home Affairs, the right hon. Member for Leicester East (Keith Vaz), presciently predicted that I would raise this issue—because it is resulting in far too much rough justice for far too many innocent citizens. As we consider the ambitions for EU criminal law, I should like to know from the Minister where that issue is on the UK agenda and where it is on the EU agenda.
The UK has also opted in to the draft European investigation order, which would allow European investigators and prosecutors to direct UK police forces to pursue leads and collect evidence. That is a threat to the liberty of our citizens, and is the last thing that hard-pressed police forces need right now. What progress has been made on limiting the risk of abuse of such wide powers and on ensuring there are safeguards that comply with British standards of justice? On a more fundamental level, why is the EU expanding its competences before it has corrected the current defects?
This issue is a prelude to the decision to be taken by June 2014 on whether Britain should opt in or out, wholesale, of the pre-Lisbon justice and home affairs legislation. If this document is a taste of what is to come, it demonstrates all too well the magnitude of that decision. This is a fork in the road: it is time to decide whether Britain will retain our unique justice system and common-law tradition. This is one of the most serious constitutional challenges the House will face in this Parliament, and I am confident that Ministers will weigh the consequences of that decision very carefully and ensure that Parliament—consisting of the elected and accountable law-makers for this country—will have the opportunity to debate and vote on that crucial decision.
Charlie Elphicke (Dover) (Con)
It is a privilege, as ever, to follow my hon. Friend the Member for Esher and Walton (Mr Raab). My concern is about this kind of extension of the whole European project. We see it creeping on further, out of taxation and all the other measures with which we are familiar, into the criminal sphere. I find this policy document highly objectionable in many areas. First, I find objectionable the statement that
“EU Criminal Policy should have as overall goal to foster citizens’ confidence in the fact that they live in a Europe of freedom, security and justice”
That is not the point of European criminal policy. Rather, it should be the criminal policy of each individual member state. The EU, by trying to say that its policy is somehow about these principles and that citizens look to it for the execution of those principles, is overstretching and overselling. It is also misreading the situation, given that it is so far removed from people and has done so little to instil confidence.
The document also says—this is more in line with where things should be—that
“the EU can tackle gaps and shortcomings wherever EU action adds value.”
I take a pragmatic position on this. I do not think that one should say, in a knee-jerk reaction, that the EU should have nothing to do with anything, or that we should embrace everything it says as messages and tablets from heaven written in stone that we should accept, honour and obey. We need to look at things on a case-by-case basis.
Nicky Morgan (Loughborough) (Con)
My hon. Friend is making an excellent argument. Within the bundle of documents before us is the draft insider dealing and market abuse regulation. That is an area in which I worked before entering the House. Does he agree that with cross-border activity such as market abuse, which in the 21st century can be committed anywhere in the world and have an effect on another territory, there is an argument that the EU has a role to play in setting out sanctions for such behaviour?
Charlie Elphicke
My hon. Friend helps me to move to my next point. The policy applies not just to market abuse. It also applies to
“terrorism, trafficking in human beings, sexual exploitation of women and children, illicit drug trafficking, illicit arms trafficking, money laundering, corruption, counterfeiting of means of payment, computer crime and organised crime.”
The list is packaged in the manner of “Do you like hospitals?” or “Do you eat food to live?”. It has been put together with breathtaking cynicism and in a way that would make even a push poller blush. We know what this is really about. It is about starting with something that everyone can accept so that they say, “Oh, yes, that’s a good idea,”. That puts the principle in place before things are moved forward. The document says, “We then want to move forward into other areas,” as my hon. Friend the Member for Esher and Walton just said.
Let us look at the issue of market abuse. Why can we not have the market abuse rules in the criminal law of our own nation? Why do we need to have minimum standards across European law if we do not necessarily want to opt in? We are being told that there is no such thing as—
Charlie Elphicke
In a moment.
We are being told that it is a misdescription to talk about a Euro-crime, but on page 9 the document states, under the heading, “What is the possible content of EU minimum rules on criminal law?”:
“The definition of the offences…Regarding sanctions, EU criminal law can require Member States to take effective, proportionate…criminal sanctions for a specific conduct.”
So if we touch on the issue of definition of the offence, and add on criminal sanctions, there is a risk that what we are actually talking about is, in effect, or could be seen as, a form of Euro-crime. I hasten to add that I do not necessarily regard that as a bad idea.
Jacob Rees-Mogg
If we were to have this co-recognition of crimes and action, would it not make more sense to do it with New York rather than with Brussels, because there is much more international financial trading in New York and London than there is in Europe?
Nicky Morgan
I will be brief because I know that time is limited. My hon. Friend asks why we need to have rules in the UK if we already have rules across Europe. The point is that, as I understand it, the proposal would bring the rest of the EU’s rules on market abuse up to the standard that we already have in this country. New York already has those standards. This is an improvement, bringing the rest of Europe along with us.
Charlie Elphicke
The European Union is doing this anyway. The central issue is whether we opt in. This is really a shadow debate for the whole issue about opting in. The letter sent by the Home Secretary to some colleagues on 21 December 2011 talks about the whole issue of the opt-ins. There are 133 directives, regulations and so on where opting in could take place.
Stephen Phillips (Sleaford and North Hykeham) (Con)
My hon. Friend refers to the central issue. Is not the central issue that raised by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox)? If we are going to criminalise people in this country, or indeed in any other member state in the EU, by law, then those who have passed those laws need to be accountable to the citizens to whom they apply, and that is not the case in relation to the European Commission or the other EU institutions, which are not accountable, in any real sense at all, to the people of this country.
Charlie Elphicke
I completely agree with my hon. and learned Friend, and that is my central point too. It is not for the European Union to start defining crimes; it is for individual nation states to do so.
There are areas where we should consider opting in. For example, I intervened on the Minister and talked about the issue of drugs. Let us look at the measures in the list provided by the Home Secretary. On one side, it talks about co-operation between customs authorities and business organisations on combating drug trafficking. Good. That is what we should have—cross-border co-operation. As the representative of Dover, I know that that is really important and makes a difference. Another 1996 justice and home affairs measure that was proposed, concerns
“the exchange of information on the chemical profiling of drugs to facilitate improved cooperation between Member States in combating illicit drug trafficking.”
Good. Yes, we should do that.
However, the dividing line for me is the 1996 JHA measure No. 750, which concerns
“the approximation of the laws and practices of the Member States of the European Union to combat drug addiction and to prevent and combat illegal drug trafficking.”
When one considers the approximation of laws and the issue of codification and requiring member states to treat everything the same way, one is rapidly moving into the area of a common criminal law—Eurojust, the European arrest warrant, the Euro-investigator, Europol and Euro-crimes. If we are to take that route, my point is simply that we should engage the country as a whole and have a proper, open discussion about what is going on, not try to spin it.
There are some cases where a common criminal law may be appropriate, particularly in the cross-border context; in others, we might conclude that it is not the right way to proceed. But to draw up a cynical list of everything that everyone would agree are the most heinous crimes known to mankind, in order to get the principle and then to extend it later, is something that we have seen with the European Union time and again. It is the fundamentally wrong thing to do, and it would be the wrong thing for us to do in terms of the opt-in or opt-out debate. I believe that when we have that opt-in/opt-out debate over the next two years, we should ensure that we include the country as a whole and have a proper, national discussion.
Jacob Rees-Mogg (North East Somerset) (Con)
I am very glad that the European Scrutiny Committee recommended this European Commission document for debate because it shows, once again, the ambition of the European Union. We have heard before—it is in the treaty of Rome—the line about ever-closer union. We often hear from the great and the good in this country that we do not need to worry about what the document says because it is not happening yet; it is not so important; these good and great people are not necessarily talking about it yet. And then it creeps in and it happens.
The ambition of the Commission’s document is exceedingly great, and the policies that it has already adopted are important. We notice, in the package of papers before us, that in 2009 the European Commission announced, under the Swedish presidency, that it would have more broad provisions guiding the Council’s criminal law deliberations. So, for three years already, the Commission, the presidency and the Council of Ministers have been looking at what they should be doing with the criminal law provisions and how they should affect us. We in this country are indeed protected by our opt-ins, but we have to bear in mind that once we have opted in, we are subject to qualified majority vote. So it is a once-and-for-all decision—we say, “Yes, we are going into that,” but then the people of this country, as hon. Friends have said, have no further ability to change that law; it becomes a matter bound in to European Union competence.
Let us look, as some of my hon. Friends already have, at the ambition of the European Commission in this area, at what it thinks more common criminal law will do, and how broad it is in its definition of the criminal law. We hear from the Front-Bench spokesmen that common criminal law will be used in rare cases, for important crimes. That is not actually what the European Commission seems to say. Page 11 of the package of documents says:
“EU criminal law fosters the confidence of citizens in using their right to free movement and to buy goods or services from providers from other Member States through a more effective fight against crime and the adoption of minimum standards for procedural rights in criminal proceedings as well as for victims of crime.”
That sentence—that bullet point—from the European Commission covers an incredibly wide set of crimes. They could be anything to do with the free movement of people, or the provision of services throughout the European Union. It then provides for minimum standards of procedure. That affects all sorts of basic points of the criminal law in this country. Will the procedure allow for trial by jury? It does not establish that. Does the procedure outlaw double jeopardy, which we basically still protect our citizens—our subjects—against? It does not say that. It says that it is aiming for these
“minimum standards for procedural rights”
and the rights “for victims of crime.”
The European Commission goes on to say:
“Common rules strengthen mutual trust among the judiciaries and law enforcement authorities of the Member States. This facilitates the mutual recognition of judicial measures as national authorities feel more comfortable recognising decisions taken in another Member State if the definitions of the underlying criminal offences are compatible.”
That means that we have to align our laws with other member states in the European Union. There may not be an immediate proposal to do that, but it is what the European Commission has in its documentation, it is what it wishes to do, and we know from experience that what the European Commission starts out with often comes to be the case.
Who can forget that wonderful moment when Lady Thatcher stood at the Dispatch Box and there were three proposals from Mr Delors, and Margaret Thatcher said “No! No! No!”? Each one of those three has now become an established part of the European family that we know and love.
What is the time scale? That again is set out by the European Commission in its package of documents. Page 18 says that it has a
“vision for a coherent and consistent EU Criminal Policy”
by 2020. So the European Commission wants us, in eight years, to have established that uniformity.
As we have discussed, the proposal includes things that are open to wide interpretation, such as computer crimes. Even an alarm clock is now computer-controlled, so even if you were to steal an alarm clock—[Interruption.] Of course, you would not steal an alarm clock, Madam Deputy Speaker, but if some brigand were to do so, that might be deemed to be a computer crime. The description is therefore set wide, as it is for
“serious infringements of road transport rules”.
If someone were to park on a red route, at what point would it be a matter for the European Union?
The Commission has set out an extremely ambitious communication, which I am glad that the House is debating. It knows clearly its route of travel and where it wants to end up, which is, ultimately, a single European state. No British Government have ever been in favour of that, yet every British Government since 1972 have ceded more powers to the European Union to create a superstate. It is important to debate the proposal at an early stage of its formation so that the Government can be robust and aware of the problem, and so that they can refuse opt-ins that, step by step, lead to the ever-closer union that has been the EU’s policy since it was founded.
Mr Blunt
I shall try to respond to the contributions made in the debate, the tone of which has been reasonably consistent, certainly among my hon. Friends sitting behind me. I had rather hoped that the tone of my opening remarks had made it clear that the Government were in a similar place on the issue as the European Scrutiny Committee.
The hon. Member for Hammersmith (Mr Slaughter) gave us the benefit of seven minutes’ consensus during which he managed to avoid expressing an opinion on Euro- crimes and the use of language in the document, which the Government, like the European Scrutiny Committee, feel is unhelpful.
I was grateful to my hon. Friend the Member for Stone (Mr Cash) for notifying me that he could not be in the Chamber for the conclusion of the debate, because he is chairing a Committee of the House. I quite understand why he cannot be here. I think it was a slip of the tongue on his part when he put “breathtaking complacency” and “Government” in the same sentence; I was grateful that he then corrected himself to make it clear that he was referring to the Opposition and the hon. Member for Hammersmith. My hon. Friend subsequently talked about the Government’s support for his Committee’s position and the tone of my remarks about Euro-crimes.
Much of the tone of my hon. Friend’s speech will have been familiar to hon. Members. Indeed, my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), the Chair of the Justice Committee, asked whether he was trying to conjure up a spectre. I sometimes think that it is not so much a spectre that is conjured up in European Union debates as a dementor, given that there is a chill in the air and hon. Members who receive a dementor’s kiss have the soul sucked out of them and find themselves hooked on this issue in a conceivably unhealthy way. However, my hon. Friend the Member for Stone has consistently and properly pointed out the possible ramifications of such communications from the European Union, and Conservative Members returned to that theme time and again. I therefore want to reinforce the fact that a solid defence of our position underpins the debate and that we are equipped with the scepticism that my hon. Friend the Member for Stone and other hon. Friends expressed.
The way in which the right hon. Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee, began his speech was evidence to support the truth of the Matthew Parris theory that Parliament is full of schoolboys and schoolgirls who were bullied during their time at school and then take extended revenge on their school mates. I will leave others to draw their own conclusions on where the “Slaughter, Vaz” quip to which he treated us puts the hon. Member for Hammersmith on the scale of bullies or the bullied.
The right hon. Member for Leicester East confirmed the point made by my right hon. Friend the Member for Berwick-upon-Tweed that no one is calling for a comprehensive system of European criminal law, despite what can be adduced from the Commission’s communication. Given that the right hon. Member for Leicester East is a former Europe Minister, I might have anticipated that he would take the position that he did. On human trafficking, it is clear that the point is around the need to address structures and systems, but we have also opted into law in that area. I take his point about data and assure him that data protection is being considered in the coming days by the European Union and the Council of Europe.
My right hon. Friend the Member for Berwick-upon-Tweed reminded us that we have a duty to keep up with cross-border crime and the development of new crime patterns. We have chosen to opt into various measures under the Lisbon framework, so that we keep pace on crime, as appropriate. He drew attention to what we face in 2014 with the 133 measures that were adopted pre-Lisbon. Of course, we will not make any premature decisions and we will consider carefully the practical implications of all the options. The Government are committed to holding a vote in both Houses before they make a formal decision. We will conduct further consultation on the arrangements for the vote, especially with the European Scrutiny Committee, the Justice Committee and the Committees of both Houses that consider home affairs. We will make a formal announcement on the process in due course. My hon. Friend the Member for Esher and Walton (Mr Raab) was also clear about the substance of the decision that we will face in 2014.
I listened carefully to the suggestion made by my right hon. Friend the Member for Berwick-upon-Tweed about UKRep engaging with Select Committees to give them notice of any European Commission business coming down the track in which they might like to take an interest. One must tread carefully with such things, given the question of what is the prerogative of the Executive and what is that of Parliament. We would not want to get to a position at which it was seen that the Executive were seeking formally to engage parliamentary bodies on their behalf. His Committee’s role is to hold my Department to account, and it is for Parliament as a whole to hold the Government to account, so I will reflect on his suggestion and invite my ministerial colleagues in the Foreign Office to read his remarks and consider whether there could be a satisfactory way forward.
My hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) reminded us, in his usual stentorian tones, about the dangers of the intrusion by others into a mature legal system. Hon. Members will have noted his learned warning about the effect of opt-ins. He made it clear that he shared the general approach taken by my hon. Friend the Member for Stone and set out the underlying caution that we should always exercise on such matters. I hope that he understood from my opening remarks that that is precisely what we do. I believe the present arrangements enable us to do that, not least the oversight exercised by this House and the European Scrutiny Committee.
As well as making points about the 2014 decision, my hon. Friend the Member for Esher and Walton reinforced the general remarks made by my hon. and learned Friend the Member for Torridge and West Devon and asked about our current position on the European arrest warrant. The EAW was the subject of a review by Sir Scott Baker, to which the Government will respond in due course.
In tone, the remarks made by my hon. Friend the Member for Dover (Charlie Elphicke) were similar to those of other hon. Friends, but I thought that the intervention made my hon. Friend the Member for Loughborough (Nicky Morgan) made quite clear the case, which he acknowledged, that we need to take a case-by-case approach, as the Government have pledged to do. As the hon. Member for Dover, he commended the co-operation on drugs trafficking, but there is a basic problem with the proposition he advanced: either we will find measures, on a case-by-case basis, where it is appropriate and in the interests of the UK to co-operate at European Union level, and we will proceed on that basis as we do now; or he and others will present that to the House as a cynical list establishing the principle of where we should co-operate, in order to open up the possibility of our being compelled to co-operate on matters where we are not compelled to do so. In his presentation of the process, however, my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) neglected to remind the House of the existence of the emergency brake. If all else fails—if we have opted in, taken part in the discussions and voted but have been outvoted on certain measures—and the matter is serious enough to constitute a fundamental assault on our criminal jurisdiction, we can exercise the emergency brake under the Lisbon provisions and thereby establish an opt-out.
I thank the House for this debate. It is clear that the Government and the European Scrutiny Committee are of the same view: we consider that European legislation in the field of criminal law should be contemplated only as the last resort and only where action at the European level is absolutely necessary. We also clearly agree that European Union criminal law proposals should have regard to the principles of subsidiarity, proportionality and, importantly, necessity based on clear evidence. Those principles are vital. The European Commission’s communication makes it clear that, although it seeks to develop a consistent approach to the use of criminal law, those principles continue to form part of the considerations even of the Commission—to echo the tone of some of the speeches made today.
The Government will continue to examine the content of European Union criminal law proposals and our participation in them on a case-by-case basis, entirely in line with the coalition agreement. In line with our commitments to Parliament, we shall also continue to engage with the European Scrutiny Committee on any EU criminal law proposals, as they come forward. I commend the motion to the House.
Question put and agreed to.
Resolved,
That this House takes note of European Union Document No. 14613/11, relating to a Commission Communication, Towards an EU Criminal Policy: Ensuring the effective implementation of EU policies through criminal law; agrees that the primary focus of EU criminal law should be tackling serious crime with a cross-border dimension; and further agrees that the general principles of subsidiarity, proportionality and necessity based on clear evidence must be respected when deciding whether to propose criminal sanctions to ensure the effective enforcement of EU policies.
London Local Authorities Bill [Lords]
(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
16:45 - The House having divided: - Ayes: 276 / Noes: 10 - Question accordingly agreed to.
17:01 - The House divided: - Ayes: 16 / Noes: 159 - Question accordingly negatived.
Philip Davies (Shipley) (Con)
I beg to move amendment 15, which is, leave out clause 5.
Madam Deputy Speaker (Dawn Primarolo)
With this, it will be convenient to consider amendments 16 to 20, 3 and 4.
Philip Davies
I begin by apologising on his behalf for the absence of my hon. Friend the Member for Christchurch (Mr Chope), in whose name the amendments stand. He asked me specifically to apologise to my hon. Friend the Member for Finchley and Golders Green (Mike Freer), the Bill’s sponsor. I assure him that our hon. Friend has not lost interest in the Bill, but decided—questionably, I think—that it was more important for him to listen to the Prime Minister’s speech on reforming the European Court of Human Rights in Strasbourg than to be here for this debate. I am not sure that that was the correct decision, but I am sure that he will be able to justify it to the Bill’s sponsor at a later date.
As you will know, Madam Deputy Speaker, my hon. Friend the Member for Christchurch had begun to move the amendment when he was cut short the last time the Bill was debated in the House. I will not repeat the remarks he made then, but it might help the House if I recap his main points. The amendment would remove clause 5, which states:
“Section 94(1)(a) of the Environmental Protection Act 1990 (street litter: supplementary provisions) shall apply in Greater London as though for ‘commercial or retail premises’ there were substituted ‘premises other than dwellings’”.
Thus, only in London, that provision would apply not just to premises such as retailers and takeaways, but to all premises that are not dwellings. The main thrust of my hon. Friend’s argument was that that related to people smoking outside buildings because of the smoking ban, and the resulting litter.
Mrs Anne Main (St Albans) (Con)
Does my hon. Friend believe that litter such as dropped cigarettes and chewing gum is covered by existing regulation and local authority powers?
Philip Davies
That is correct. My hon. Friend the Member for Christchurch touched on that in his speech—he omitted to mention other things that I shall discuss today—and expressed the view that the clause was a sledgehammer to crack a nut, but my hon. Friend the Member for St Albans (Mrs Main) is right: there are plenty of other regulations that could apply.
Mike Freer (Finchley and Golders Green) (Con)
To help my hon. Friend the Member for St Albans (Mrs Main), the current regulations do not apply to public buildings. Retail and commercial buildings are covered, but public buildings are not, and the purpose of the provision is to extend coverage to them.
Philip Davies
I am sure we are all grateful for that clarification. The point I think my hon. Friend the Member for St Albans was making and I am sure my hon. Friend the Member for Christchurch would have made were he here is that people who smoke outside a building and deposit their litter on the street are guilty of an offence under existing provisions, without the Bill coming into play, and can be prosecuted. He made the point that many places provide containers for smokers’ litter and that the problem, if it did exist, applied equally across the country and there was no justification for a London-only provision.
Mrs Main
The authorities in St Albans have always had the problem of not knowing exactly where the people who have dropped litter came from, but that is why they have always believed that, if they so chose, they could enforce litter regulations outside any premises. It is not necessary to see a person coming out of a premises. The local authority targeted the culprit—the person who dropped the litter—rather than the premises.
Philip Davies
My hon. Friend is absolutely right. I am sure she agrees that existing legislation is sufficient to tackle the problem.
My hon. Friend the Member for Christchurch challenged my hon. Friend the Member for Finchley and Golders Green to justify the wide-ranging powers that clause 5 would give. He said that he saw a difference between takeaways, which sell products in packaging designed to be taken out of the shop and disposed of, and offices or buildings where smokers happen to congregate outside the front door to have a discussion over a cigarette. I am not entirely sure I agree. Just because a takeaway sells a burger and puts it in a wrapper for people to eat at their convenience does not mean that it should be held responsible if a customer drops the litter somewhere where they should not. I believe in individual responsibility, and the responsibility should lie with the individual who is doing the littering. That should apply equally to what happens outside a takeaway and to smoking outside an office, but my hon. Friend the Member for Christchurch made that distinction.
Philip Davies
My hon. Friend makes a good point. This part of the Bill—indeed, the whole Bill, although I will not be diverted on to that, Madam Deputy Speaker, but will stick to the amendment and clause 5—exists for the convenience of local authority officials. That is the thrust of the provisions.
Chris Williamson (Derby North) (Lab)
The hon. Gentleman is extremely unfair to local authorities in suggesting that the clause exists for the convenience of officials. In fact, it is designed to ensure the best use of public money. He will be aware that local authorities have experienced substantial reductions in their budgets, so is he happy that they would have to expend even more resources to enforce the legislation when the clause offers a perfectly appropriate alternative way of ensuring that there is not an accumulation of litter outside public buildings, and would benefit the local community? It seems a good use of public money, and—
Madam Deputy Speaker (Dawn Primarolo)
Order. I remind the House that interventions must be brief.
Philip Davies
I do not accept what the hon. Gentleman said. He may think that all this is for the benefit of council tax payers and local residents, but I do not agree. Businesses pay lots of money through rates and so on, and they expect a service in return. The Bill wants businesses to cough up for the council to provide services. At the end of the day, the council can say, “By the way, even though you have coughed up for services, we don’t want to provide you with any services. We’ll get you to pay extra on top for anything that you might ever want to use.” That is an unfair system. If the hon. Gentleman is advocating that we scrap the rates that businesses pay and hold them responsible for anything that goes on, I might have a bit of sympathy, but he is trying to have the best of both worlds.
It seems as if we are doing this for the benefit of council officials who do not want to spend time trying to identify the individual responsible because they file that under “Too difficult”. They want to make businesses generally be responsible for anything that goes on anywhere near their premises—in that way, they can crack the problem and do not have to do anything.
Mr James Gray (North Wiltshire) (Con)
I have been listening carefully to my hon. Friend. This is the first occasion on which I have debated the Bill, and I am puzzled on two counts. First, if the hon. Member for Derby North (Chris Williamson) is right that there is a means of reducing the burden on local authorities, presumably, at the expense of businesses, why should that be the case? Secondly—and forgive me for mentioning this, Madam Deputy Speaker—why should such a measure apply in London when there is no such provision in the rest of the UK? The legislation cited by my hon. Friend the Member for Shipley (Philip Davies) covers every other metropolis in England, so why should London receive special treatment?
Philip Davies
My hon. Friend is absolutely right, and gets neatly to the nub of the issue in the clause and the Bill. If this is such a big issue—the hon. Member for Derby North (Chris Williamson) may even think that it is a big issue in his part of the world—the problem exists to the same extent across the country. If we are going to introduce measures to tackle it, regardless of whether it is a problem or not, the solution in the House is to introduce legislation that applies to every single local authority. If the problem is as the hon. Gentleman describes it—and perhaps he will try to square the circle—why should the measure apply only in London, but not in any other part of the country, including his own?
Chris Williamson
The hon. Gentleman is allowing the perfect to become the enemy of the good. If local authorities in other parts of the country wish to have that power, I have no objection to that. The Bill is a good step in the right direction, and goes some way towards ameliorating the impact of the huge reductions in Government funding for local authorities.
Philip Davies
That is very interesting. The thrust of the Bill and of the clause is to address problems unique to London. Apparently, that is why we need the Bill: because of the huge volume of tourists and visitors, local authorities need all those extra powers. The hon. Gentleman slightly let the cat out of the bag when he said that this is nothing to do with London, but the thin end of the wedge. This is a test case so that we can roll this out throughout the country. If that is the point, I suggest to the hon. Gentleman, and perhaps even the Bill’s sponsor, that he goes back to square one, starts from scratch, and if it is such a big issue, introduces a Bill, perhaps with Government support. We have yet to hear from the Minister whether he supports these matters applying only in London, or whether he thinks they should apply elsewhere. If the Minister thinks that they should apply in the rest of the country, I suggest that he scraps this legislation, votes it down and brings in legislation that applies everywhere.
Mrs Main
My hon. Friend makes a powerful argument. I am listening with increasing concern because this appears to be nothing about solving a particular problem to do with offences; it is about cutting costs for local authorities, in which case, as my hon. Friend argues, it should apply nationwide. It appears that the rationale behind the clause is nothing to do with offences at all, but to do with cost-cutting.
Philip Davies
My hon. Friend might want to advance that argument, but I am not entirely clear whether the Bill is simply about cost-cutting. I know that that is what the hon. Member for Derby North would have us believe, but I think that it is slightly more sinister and that it is about the amount of powers to be given to local authorities and their officers.
Jacob Rees-Mogg (North East Somerset) (Con)
Might the provision be not only cost-cutting, but cost-increasing? Some of the buildings that will be included are public buildings, so the charge will simply be taken from a local council to another public authority, but the local authority already has the means of street cleaning, whereas the public authority in a building may not.
Philip Davies
My hon. Friend makes a good point. Given that local authorities are playing not with their own money but with other people’s, they may not be so bothered if they were caught up in the regulations. It may be businesses that were more concerned and therefore dealing with the problem better themselves. My hon. Friend touches on a good point because no business will attract customers if the area around its shop is in a terrible state, full of litter. I suspect that this is a solution looking for a problem, because most businesses will want to ensure that the streets close by are free of litter. They are probably doing that already, so my hon. Friend may well be right. The measure may well end up applying only to other public buildings, and the local authority may find itself in some accounting exercise where it is passing invoices from one department to another, which makes everyone unhappy apart from the person who is supplying invoices for the local authority, and it will not benefit the council tax payer, but give them an extra cost. My hon. Friend may well be on to something there.
I was slightly sidetracked, particularly by the hon. Member for Derby North. I made the point that the Clean Neighbourhoods and Environment Act 2005 already took the law beyond the Environmental Protection Act, and I gave an example of that. But it does not stop there, because section 21 of the 2005 Act extended street litter notices to any vehicles that act as commercial or retail premises, which was another giant step of mission creep down this particular route. On street litter control notices, which is precisely what this clause deals with, the 2005 Act says:
“In section 93 of the Environmental Protection Act 1990…(street litter control notices), after subsection (3) insert—
‘(3A) A vehicle or stall or other moveable structure which is used for one or more commercial or retail activities while parked or set at a particular place on or verging a street is to be treated for the purpose of this section and section 94 below as if it were premises situated at that place having a frontage on that street in the place where it is parked or set.”
So we have already had an extension of the provisions that the hon. Gentleman seeks to extend further. The Act continues:
“(3B) In subsection (3A) above, ‘vehicle’ means any vehicle intended or adapted for use on roads.”
That may well be burger vans or ice cream vans. That has already been covered in that legislation. The Act continues:
“(3) in that section, for subsections (8) and (9) substitute—
‘(8) A person commits an offence if, without reasonable excuse, he fails to comply with a requirement imposed on him by a notice.
(9) A person guilty of an offence under subsection (8) above is liable on summary conviction to a fine not exceeding level 4 on the standard scale.’”
Those are already the laws of the land. This is the law that applies throughout the country. Why on earth it should be extended just for London is beyond me.
Mr Gray
My hon. Friend was advancing a persuasive argument until his last point. That this duplicates existing legislation is a perfectly sound argument for not allowing it to be done. I am a strong supporter of the “polluter pays” principle, and surely there is some argument for saying that if the theatre or the burger bar is responsible, they should pay for clearing up the mess.
Philip Davies
I will agree with my hon. Friend on the first half of his point, but disagree with him on the second. If he follows the first half through to its logical conclusion he will disagree with himself on the second half. He said that he believes in the “polluter pays” principle, and that is a perfectly sound basis upon which to start. There may well be some exceptions, and I am sure that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) will think of some. But in this case, the polluter is not the theatre. Just because the theatre issues a ticket to a customer does not mean that, when that ticket finds itself on a London street, it is the theatre that is the polluter. Surely my hon. Friend would accept that the polluter is the individual who dropped the litter, not the theatre. My hon. Friend is a very sound man, and I am sure that he believes as much as I do in individual responsibility. If so, he must accept that this is the responsibility of the individual, not the theatre.
Mr Gray
On reflection, I will disagree with myself and redisagree with the disagreement that I made against myself a moment ago, if my hon. Friend will forgive me for doing so. He is of course quite right. If the person who drops the litter is the person who pays the fine, as happens under the existing legislation without this clause, the polluter indeed pays. However, if the institution from which the polluter emerges pays, that is an entirely different principle under environmental law.
Philip Davies
I accept that. The point is that surely the problem would be worse. If individuals felt that they would not be held responsible for their actions but would get off scot-free, and that the theatre would take responsibility, we might end up with more litter, because individuals will feel free to throw it willy-nilly, knowing that they will not be pursued.
Mike Freer
My colleagues seem to be rather obsessed with the views of the Society of London Theatre and the Theatrical Management Association, but they have withdrawn their objections and petition. They did not object on this particular issue but on a different issue—and, as I say, their petition has been withdrawn.
Philip Davies
I am grateful for that update. They are obviously more easily impressed than I am with what my hon. Friend tells them. I am sure that his powers of persuasion worked wonders on them. I look forward to him speaking at length in this debate so that his powers of persuasion may work on me, and I may be able to withdraw my amendment.
Mrs Main
Is not the problem the fact that this would effectively carve up the streets in front of public buildings and ultimately make them responsible for the streets? Who can say whether a Mars bar wrapper—sorry, Mars!—lying on the street outside a theatre was dropped by someone going into the theatre having ejected it from their pocket, or someone coming out of the theatre having eaten it on the premises? The point is that the person who dropped the sweet wrapper is responsible for the litter, not the theatre, even though it is in front of the premises.
Philip Davies
My hon. Friend is right. She introduces a new aspect, because if we follow this through to the logical conclusion, it may not be the individual but the retailer who is responsible. And then perhaps we should go the whole hog and say that it is not the retailer who is responsible but Mars, because it put the product in a wrapper that could be dropped. My hon. Friend the Member for Finchley and Golders Green may well be thinking about amending the Bill further so that retailers are not held responsible, but instead Mars would be held responsible for any Mars bar wrapper found anywhere on the streets of London, because it should not have produced a chocolate bar in a wrapper.
Mrs Main
I have to “fess up” and declare an interest: my husband worked for Mars for a long time, which is probably why the example sprang into my head. I in no way wish to imply that Mars bar wrappers—Snickers is also a Mars product—are more likely than other wrappers to end up on the floor.
Philip Davies
It was important for my hon. Friend to make that point, because otherwise she might have been in trouble tonight, and her endless supply of free Mars bars could have been at risk.
Bob Blackman (Harrow East) (Con)
My hon. Friend is making a powerful speech about who is responsible for litter and its collection. Taking the principle that the polluter should pay, I trust that he will support the principle that the measures taken must punish those who drop litter in the first place.
Philip Davies
I do not want to get sidetracked—as I am sure you do not, Madam Deputy Speaker—but the whole thrust of my argument is that the legislation already in place is perfectly sufficient to allow that to happen. My hon. Friend says that the polluter should pay. That is all very well, but local authorities come to the Government, and to council tax payers, saying that they need all this money to do this and that, and to ensure that the streets are kept clean, and all that kind of business, but on the other hand they are surreptitiously trying to say that they will take all the money from the Government and from the council tax payer for fulfilling this obligation, but then, quietly on the side, they will then try to pass the responsibility on to someone else. If those local authorities want the funding for keeping the streets clean, they also have to take on the obligation to keep them clean. They cannot have one without the other.
Esther McVey (Wirral West) (Con)
I am listening to the debate with great interest. The Liverpool BID—the city centre business improvement district—includes around 650 businesses that have come together because they want to make the environment cleaner, above and beyond what is happening on the streets. They have taken it upon themselves to cover even bigger areas and are funding it. However, there have been possible links between increases in the amount of work they want to do and a potential reduction in business rates, because they think that that is work the council is not doing. They would also like to do competitive tendering with the council, thereby also reducing their business rates. If my hon. Friend is concerned about loss of money, this could be a sure way to lose money through the business sector.
Philip Davies
I am grateful to my hon. Friend. That sounds like a good initiative. In fact, I think that there are business improvement districts in London. I am not entirely sure if they work in exactly the same way as it does on Merseyside, but they are certainly there. It seems to me that my hon. Friend proposes a far better solution, if there is a problem, which could not only get the support of the local authority, because it would then not have to deal with the problem that it does not think is its responsibility, but local businesses, which I might add probably do a far better job clearing it up than the local authority, because they would feel that they are improving their local area and making a contribution, but are not, in effect, paying twice. My concern is that the Bill is trying to get them to pay twice, once for their rates and once for sorting the problem out.
Jacob Rees-Mogg
I wonder whether that establishes a general principle that it is much better to get a free market solution whereby companies come together to make things better, rather than draconian sanctions being imposed from on high.
Philip Davies
I absolutely agree with my hon. Friend, and I am sure that my hon. Friend the Member for Wirral West (Esther McVey) will welcome his support for her argument, because he is absolutely right.
We know what needs to be done, because we have plenty of recommendations and evidence that would eliminate the need for clause 5. In June 2006 Environmental Campaigns—ENCAMS—produced the report “What is the Situation with Cigarette-Related Litter in England?”, which set out some recommendations. We know from the sponsor of the Bill and the explanatory notes that clause 5 is intended to tackle above all else, but not exclusively, the new phenomenon of smoking outside, because of the ban on smoking in public places. On research and monitoring, ENCAMS recommended:
“An accessible, repeatable monitoring methodology could be developed to measure the quantity of cigarette butts in the environment, and therefore better understand the impact of interventions.”
One of the problems is that we appear to be going down the route of putting forward legislation without fully appreciating the nature and scale of the problem. On education and communication, ENCAMS recommends:
“The successful ENCAMS cigarette-related litter campaign could be repeated in the future, to build on the momentum it has generated. The learnings from the 2006 campaign should be built into the 2007 campaign”
and campaigns in future years, and:
“Additional communications campaigns could be developed to target specific stakeholder groups in areas where cigarette litter tends to accumulate.”
This is a far better solution and it would target where there is a problem—and cigarette litter tends to accumulate— rather than having a blanket policy that applies everywhere, whether or not there is problem.
On ashtrays and infrastructure, ENCAMS recommends
“ENCAMS existing list of ashtray suppliers could be further expanded and developed to include a description of the characteristics and price of ashtrays. This could be complemented by a set of best practice guidelines to provide advice on the type of ashtrays that are suitable in different contexts.”
On enforcement, it recommends
“Ways to increase enforcement levels could be investigated, such as further training programmes for enforcement officers and street wardens.”
It seems to me that the report was not blaming the non-dwellings. ENCAMS seems to be saying that it is the councils that need to raise their game.
Jacob Rees-Mogg
I wonder whether it is not rather an unsatisfactory principle that something that was perfectly legal should be made illegal but then increasingly unpleasant, and draconian penalties are introduced for people who are doing something that used to be legal, having been forced to do it less comfortably. I simply do not think that is the right way to legislate.
Philip Davies
My hon. Friend is absolutely right. This is a tyranny over people who were once able to enjoy a particular way of life indoors who have been forced outside, through no fault of their own and no fault of the premises from which they have been kicked out. Most premises used to offer some kind of smoking room or a place where smokers could go. The legislation has forced them to put those people out on to the streets. It would be a rather perverse kick in the teeth for them, having been once inconvenienced, now to have to pick up the tab—excuse the pun—for a piece of Government legislation. My hon. Friend is right that it would be perverse to go down that, route based on the history of how this situation has come about.
Andrew Percy (Brigg and Goole) (Con)
There is clearly a problem in how that relates to public houses, but as I remember from my time as chairman of a licensing authority, it is possible to deal with some of the current problems through the licensing system, through conditions on licences. For example, councils could look at their licensing policy. If this is such a great problem, and clearly people feel that it is, is my hon. Friend aware of any local authorities that have tried to address it through their licensing regime?
Philip Davies
My hon. Friend makes a good point, and he knows far more about those matters than I do, so I certainly bow to his superior knowledge. Other local authorities will have to deal with these issues through licensing and other imaginative schemes that he will know from his time as a councillor in Hull, because the Bill applies only to London. So even if we pass this Bill, his local authority will still have to go down such routes, because the benefits, if they are benefits, of the legislation will not apply to it anyway.
Mrs Main
My hon. Friend is absolutely right, and many local authorities, my own included, are working on the issue positively in order to encourage people to stop smoking, given that it has now become more inconvenient to do so, and in order to consider what provision, such as bins, they can make so that people dispose of litter sensibly. Local authorities are already helping with the strategy; they do not need new legislation on the littering aspect.
Philip Davies
I absolutely agree.
The ENCAMS report went on to discuss cleaning and stated:
“Efficient, cost effective cleaning equipment that targets cigarette butts would complement preventative measures, especially at the start of an education campaign. Furthermore, the fundamentals of streetscape design could be considered to discourage and prevent the impacts of littering, especially in those areas where cigarette litter accumulates.”
Most importantly, it concluded:
“Ultimately, the reduction in cigarette litter is likely to be more significant in England if the identified solutions are implemented in a targeted, coordinated fashion, with strong partnerships between stakeholders.”
ENCAMS’ conclusion seems to be compatible with the approach that my hon. Friends the Members for Wirral West and for North East Somerset advocate, and surely that is a far better route to go down than clause 5, which is officious and, as my hon. Friend the Member for North East Somerset said, might not even help with the problem but make it worse.
We have also had a Department for Environment, Food and Rural Affairs report, after the ENCAMS report, on how local authorities can prevent cigarette litter, and DEFRA proposed seven similar guidelines, with
“advice about how to prevent and reduce cigarette litter based on international and local experience. They are:
“1) Ashtrays—choose the right ashtray to suit your context and needs; 2) Signage—provide clear, consistent anti-littering signage; 3) Cleansing—clean up littered cigarette ends; 4) Partnerships—work with local organisations; 5) Leadership—walk the talk and be a leader in your community; 6) Educate—change the cigarette littering behaviour of smokers; and 7) Enforcement—use the legislation and powers available where appropriate.”
Those points are similar to the ones that ENCAMS made, and, given that outside this place there seems to be a consensus developing on what should happen, I hope that my hon. Friend the Minister will not go against that report by another Department, which proposed a solution very different from the line taken in clause 5.
Interestingly, in the DEFRA report, “Enforcement” was listed as the last thing to do. It was the last resort: once everything else has failed, enforcement should be the final path; it should not be leapt to as the first solution. Furthermore, the report says:
“Enforcement—use the legislation and powers available where appropriate.”
It suggested not that new powers of enforcement were needed, but that what should be used were the powers already available to local authorities, so I see little evidence from anywhere to suggest that clause 5 is required. That is why it should be deleted.
We do not need to look too far to find out how we can solve, without clause 5, the problems that the Bill’s promoters have—perhaps rightly—identified, because Braintree district council reduced cigarette litter by encouraging smokers to use portable ashtrays. A campaign was launched to raise awareness, and the council purchased 1,000 portable ashtrays. Media coverage was so successful that it had to order a further 400 ashtrays, and in addition the company supplying them found five local newsagents that agreed to sell the product. One shop in Braintree sold more than 200, and follow-up interviews with ashtray users showed that smokers continued to use them and welcomed a means of disposing of their cigarette butts responsibly. More importantly, cleansing staff noticed a general reduction in the number of cigarette butts on the streets.
My hon. Friend the Member for North East Somerset advocates a free market solution to the problem, so I hope he agrees that what happened in Braintree was a far better, and truly free market, solution to the problem that the Bill’s promoters have identified.
It is not just Braintree that has found ways of dealing with the problem, however. An interesting idea worked successfully in Australia, so my hon. Friend the Member for Finchley and Golders Green might wish to run it past all his local London authorities. In 2004 Toowoomba city council wanted to reduce smoking-related litter throughout the city, so it ran a small-scale campaign within the council to change the cigarette-littering behaviour of staff before trying to change the behaviour of the public, which in itself makes the interesting point that perhaps London Councils should start closer to home with its solutions to the problem, rather than by interfering with everybody else.
A clean-up was carried out around Toowoomba council buildings, and official and unofficial smoking areas were identified. The number of stubs was counted during the clean-up so that any reduction could be monitored as each measure was introduced. First, all employees were exposed to educational material—a process that continued throughout the campaign—and just that one measure alone reduced the number of littered stubs from 1,849 to 1,164. After one month, all employees who smoked were offered pocket ashtrays—similar to what happened in Braintree—and 150 were given out, producing a further reduction to 966 littered stubs. The following month wall-mounted ashtrays were installed in the smoking areas, and that saw the amount of littered stubs fall to 753—a 41% reduction in cigarette litter in total.
Following the success of the campaign, and with the knowledge that the council was leading the way, a city-wide public campaign to reduce cigarette litter in Toowoomba was carried out.
Jacob Rees-Mogg
I wonder whether my hon. Friend would describe that initiative as “nudge” theory. That means getting people to do things by gently pushing them in the right direction, rather than through what we have been discussing—the heavy hand of the state crashing down.
Philip Davies
Absolutely. That is very much the case.
The point of these examples, and the lesson that we should learn from them, is that people can be helped to produce a solution themselves. It would be far better if the Bill were proposing measures that helped people to sort out the problem themselves, rather than introducing a sledgehammer to crack a nut.
Mrs Main
I am extremely interested to hear the Toowoomba and Braintree examples. Does my hon. Friend know whether the authorities in London have explored the idea of copying any of those examples before resorting to legislation? Is he aware of any pilot studies that have been carried out and evaluated which led them to the conclusion that the only way to solve this potential problem, which they perceive as a problem, is to encourage more regulation and legislation?
Philip Davies
I agree with my hon. Friend, who makes a good suggestion, and I am not aware of any local authorities in London having learned from those ideas or tried to apply them first. Perhaps the Bill’s sponsor can shed more light on that, but I certainly encourage them to use legislation as a last resort, because at the moment we are using it as a first resort, and there are plenty of examples of other measures working just as effectively, if not more so.
In addition, over the past couple of years Keep Britain Tidy has campaigned to change the public’s attitude and behaviour towards dropping cigarette litter. Last year, campaigns in June and September helped reduce cigarette litter by 33% and 23% respectively, so again, we have other measures. The reduction occurred without any new legislation and without the clause before us being inserted into legislation. All this proves beyond doubt that my hon. Friend the Member for Christchurch is absolutely right to suggest that there is no need to extend street litter notices. That is why I very much support his amendment 15.
Amendment 16, which is where my hon. Friend the Member for Christchurch was cut off in his prime, would delete clause 6, which is on the use of turnstiles at public toilets. This is the exciting provision—the one that we were all waiting for. Clause 6 states:
“Section 1 of the Public Lavatories (Turnstiles) Act 1963 (abolition of turnstiles) shall not apply in respect of a public lavatory or public sanitary convenience controlled or managed by a borough council.”
The effect of clause 6 is summarised in the explanatory notes:
“Clause 6 amends the application of the Public Lavatories (Turnstiles) Act 1963 in Greater London. Section 1(1) of that Act provides that every turnstile in any part of a public lavatory or public sanitary convenience controlled or managed by a local authority or in any entrance or exit of such lavatory or convenience had to be removed six months after the 1963 Act obtained Royal Assent. It also provided that no turnstile should be provided in the future. Clause 6 disapplies those provisions in Greater London.”
It is timely that we have just got on to this matter because my hon. Friend the Member for Bury North (Mr Nuttall), who has just arrived, has a particular interest in public lavatories. I do not want anyone to get the wrong idea. I hope that he will forgive me for couching it in those terms. What I am trying to say, in a rather ham-fisted way, is that he knows more about this subject than I do, not that he shows a particular interest in it. Anyway, I will leave it there.
Mrs Main
Flushed with success, one might say. I sat on the Select Committee on Communities and Local Government when it produced a report on the provision of public lavatories. One of the recommendations, as I am sure my hon. Friend is aware, was that the 1963 Act should not only be upheld, but that, according to all the information the Committee received, it should be extended wherever possible. We recommended that all private premises, such as train stations, be encouraged to remove their turnstiles at the earliest opportunity. Anything that goes contrary to the recommendations of the 2008 Select Committee report would be retrograde.
Philip Davies
I am grateful to my hon. Friend. Like my hon. Friend the Member for Bury North, she is clearly far more of an expert on public toilets than I am. I have no idea why the Select Committee decided that that was the most pressing matter to inquire into and report on. Perhaps she can enlighten me.
Mrs Main
I am more than happy to enlighten my hon. Friend. We received numerous submissions of evidence from people with disabilities and from organisations such as Help the Aged. People felt that the lack of access to good, well-functioning toilets often curtailed people’s right to access fully all aspects of life. Many groups said that it was vital to improve accessibility to toilets because, even under the current regulations, they did not feel that it was good enough.
Philip Davies
That is very helpful. I do not know whether the local authorities concerned or the sponsor of the Bill have read the evidence sessions or conclusions of that inquiry. I do not know whether they have spoken about this Bill with the groups that felt so strongly in that inquiry. I suggest that they should have done so before they even thought about bringing forward clause 6.
The Public Lavatories (Turnstiles) Act 1963 prohibits the use of turnstiles
“in any part of a public lavatory…controlled or managed by a local authority”.
According to the Government’s strategic guide, that requirement was in response to public concern about the safety and access problems of turnstiles for the general public, specifically for people with disabilities, people with buggies and pushchairs, and pregnant women. It would be helpful if the Minister clarified whether the Government still believe in that Act or whether they feel that it should be repealed. If they believe that it should be in force, surely they believe that it should be in force in London just as in any other part of the country. I look forward to his clarification of the Government’s position.
As my hon. Friend the Member for St Albans said, the Communities and Local Government Committee took evidence on this matter in preparing its twelfth report of 2007-08. I feel slightly ashamed to talk about it in her presence, because she might put me right on a few things. As she said, the report was critical of the use of turnstiles by private providers of toilet facilities. Richard Chisnell said in evidence to the Committee:
“To see people queuing up with luggage, and families trying to get through a turnstile and put money in a coin-operated slot before catching a train is pitiful in Britain in the 21st century.”
Mike Freer
The Bill is not in direct contravention of that recommendation. “Turnstile” is a legalistic term. It does not specify the sort of turnstile that would have been used in 1963. If Members visit any tube station in London, they will see the automatic barriers to which my hon. Friend is referring. That is what is meant by a turnstile under the modern definition.
Philip Davies
I am very grateful to my hon. Friend for that clarification. What he says is all well and good, but how does he know exactly what kind of turnstile will be put in place by these local authorities? He may well envisage a modern system of access to a toilet, but some local authorities may use the repeal of these provisions to install something that neither he nor I think is appropriate.
Mike Freer
I understand my hon. Friend’s concern. The point is that since 1963, we have had the Disability Discrimination Acts and the Equality Acts, which prevent the use of the kind of turnstiles that he is worried about. Because of those Acts, the kind of automatic barriers that we see in tube stations will be what are used under the Bill.
Philip Davies
I am grateful to my hon. Friend for that clarification, but he is not taking into account the evidence that was given to the Communities and Local Government Committee. It is not only people with disabilities who are a major worry in relation to clause 6, but people with buggies or pushchairs and people with a lot of luggage. There may well be other people who will be affected.
Mark Tami (Alyn and Deeside) (Lab)
Another important point, besides whether there are turnstiles, is that far too often toilets are closed or left in a bad state by the local authority.
Philip Davies
That may well be true. Perhaps local authorities ought to sharpen up their act before they try to pass such legislation. The point is that these toilets will be closed to even more people if we have clause 6. If people have a lot of luggage or a big pushchair and cannot get through the turnstile, they will not be able to get in whether the toilet is open or closed. For some people, these toilets will be closed permanently.
Mrs Main
Having served on the Communities and Local Government Committee, I know that the report presents only a snapshot of what was said to us. In evidence, organisations such as the Changing Places consortium argued that nothing should be put in place to stop people having free, easy access to toilets. Some people have urge incontinence. The issue is not whether there is a bar in place, which can be sorted out fairly quickly. For some people, any obstacle will make it almost impossible to use public toilets. Whatever is envisaged by my hon. Friend the Member for Finchley and Golders Green, it cannot possibly open access to toilets, but must surely close it down in some way, shape or form.
Philip Davies
My hon. Friend is absolutely right. Again, I bow to her superior knowledge from her time on the Select Committee. She has heard more evidence about this matter than I have. I am merely reading the report and giving a flavour of the recommendations.
When I worked for Asda, for a number of years I had the privilege and pleasure of being responsible for the facilities and services that we provided to our customers with disabilities. After car parking and the abuse of disabled car parking bays, the biggest issue that was raised by our customers with disabilities was the accessibility of the toilets. I say to my hon. Friend the Member for Finchley and Golders Green that we ignore at our peril the difficulties that people with different disabilities experience in accessing toilets. There is no one category of disability whereby we can have one kind of turnstile and people think, “Well, that’s fine, everybody can get through that.” We should appreciate that lots of people have different types of disability that make different types of equipment difficult for them. Instead of having turnstiles that will no doubt catch out people with one or another type of disability, we should be making toilets as accessible as possible for everybody so that their disability is not affected.
Tom Brake (Carshalton and Wallington) (LD)
Because the disability discrimination laws would apply, the problems of access that the hon. Gentleman is highlighting should not apply to turnstiles. Furthermore, the fact that these turnstiles allow for the mechanical collection of charges should mean that there will be more, not fewer, public toilets.
Philip Davies
We absolutely do not know that, and neither does the right hon. Gentleman. I will come to that later.
Mrs Main
The question of how much people are prepared to pay to use a public toilet facility was also covered in the report. In fact, the charge could never reflect the true cost of using public toilets. Any such surplus funding will not be available to fund new public toilets—that came out loud and clear. There will always be a cost to a local authority, and unless the charges were totally prohibitive they would never generate enough funding to generate new toilet facilities. That argument cannot be considered as part of the justification for this measure.
Philip Davies
I am grateful to my hon. Friend, who displays her expertise once again. As regards not knowing how much people are prepared to spend to go to the toilet, I always thought we knew they were prepared to spend a penny, but perhaps that is somewhat out of date.
The right hon. Member for Carshalton and Wallington (Tom Brake) mentions the Disability Discrimination Act, which has been used as cover by my hon. Friend the Member for Finchley and Golders Green. Under that Act, the service provider is obliged to make reasonable adjustments, not to make everything wholly accessible to everybody. A local authority that is denying access to a person with a disability because their disability does not fit in with the equipment that is on display may well argue that it would be unreasonable for it to change its entry system because it would be disproportionately expensive in relation to the one person it helped—in other words, that it would be an unreasonable adjustment. My hon. Friend would be misguided if he put all his faith in the Disability Discrimination Act, because it does not do what he seems to think it does.
Jacob Rees-Mogg
If the Act allowed for turnstiles that everybody could get through, why should that not apply to the whole country? Why are we using a private Bill to repeal a public Act? Surely this is a rather dubious constitutional procedure.
Philip Davies
My hon. Friend is absolutely right. If the problems that the Bill seeks to address exist, they cannot possibly be unique to London—they must apply equally around the country. I would go so far as to say that it is an abuse of private legislation for someone to try to tackle something that applies equally across the country by passing a piece of legislation that will apply to only their part of the world. The whole point of private business is to deal with problems that are unique to the place to which it applies.
Bob Blackman
Does not that fly in the face of my hon. Friend’s argument given that we, as a Government, are pursuing the agenda of localism? Localism is all about local choices and local decisions, and the people of London—London councils across the board—have taken the view that this is a power that they want. In addition, does he believe that it is right for local authorities to collect money through charges for the use of public toilets?
Philip Davies
I do not want to get sidetracked by charges in toilets, Madam Deputy Speaker, because I am sure that if I went down that route you would soon pick me up and tell me to keep on the straight and narrow. I am tempted by my hon. Friend’s deliberate attempt to get me into trouble by leading me out of order, but I will resist.
My hon. Friend appears to have given up on his former valiant defence of the reason for this measure and has now played what he believes to be the trump card of localism. Perhaps he thinks, “If all else fails, bring out the localism card.” I have two points to make about that. First, the purpose of Parliament is that we are here to defend the freedoms of people right across the country, and wherever we see those freedoms being infringed, it is our duty to try to do something about it.
Secondly, one could just about use the localism principle to sustain an argument that in Shipley, to pick a place at random, the local authority should be able to do what it wants with its public toilets because even though we have on our doorstep Saltaire, which is a world heritage site and a fine place that I advise all hon. Members to visit, the centre of Shipley does not have a great number of tourists. That is regrettable. If people wandered down from Saltaire, which is only a mile or two away, they could soon be a tourist in Shipley, but it does not tend to happen. In London, however, the exact reverse is the case. These regulations will not only apply to Londoners because London has the distinction of having a large number of visitors from every part of the country. When my constituents, who know that local authorities cannot put turnstiles in toilets in their local area, come and visit London for a weekend break or a week’s holiday, they should be able to expect that the law of the land that applies in their part of the world applies in London too. It would be completely bizarre if all those people travelling down to London for a weekend were caught unawares by such draconian legislation. How on earth could they be expected to know that London has a completely different regime on all these matters of basic freedoms from that which applies in other parts of the country?
Andrew Percy
This power is not about localism unless it is provided to all local authorities in England. If we do not do that, we end up doing what a lot of my constituents think happens down here because they feel that this place is all about London—or all about Scotland, because we are hearing a lot about independence—but not about the regions. I bet my bottom dollar that we would not have much chance of getting a North Lincolnshire or an East Yorkshire local authorities Bill through this place.
Philip Davies
If my hon. Friend did try to introduce such a Bill, I would probably be standing here speaking against it in the same way. I put that warning shot across his bows. However, he makes a good point. If we believe in localism, we should at least give every local authority a fair crack of the whip by allowing it to have the same privileges that my hon. Friend the Member for Finchley and Golders Green is seeking for London. Whichever way one looks at it, there seems to be no justification at all for saying that London can do something that nowhere else can. That appears to be grossly unfair.
Mrs Main
My hon. Friend is being extremely generous in giving way.
One of the important points that came out of the Communities and Local Government Committee report was that tourism, and therefore access to toilets, was vastly important in London, but that signage towards toilets and toilet cleanliness were often poor, that that needed addressing, and that many tourists did not have the right change to access turnstiles. People have trouble finding toilets because of poor signage, and then potentially have trouble getting into them if a fee has to be paid.
Philip Davies
My hon. Friend is right, and it has been a delight to have her in the debate this afternoon. She has been able to shine a light on the Committee’s report, which I must confess had escaped my attention until I started examining the Bill. I am ashamed to admit that I missed it, but because of her we have been able to enjoy the benefits of it.
It is not just the Communities and Local Government Committee that has looked into the matter. The Department for Communities and Local Government, the Minister’s own Department, produced a strategic guide called “Improving Public Access to Better Quality Toilets” in 2008. I know that it was produced under the previous regime, but I would be interested to know whether the Department still subscribes to its strategy on better-quality toilets.
Mr David Nuttall (Bury North) (Con)
My hon. Friend is making a powerful case, and I am sorry that I missed the opening part of it due to my commitments on the Committee corridor. Has he seen annex D to the DCLG report? It is about the community toilet scheme promoted by the London borough of Richmond upon Thames, which encourages businesses to allow members of the public to use their toilets while they are out and about.
Philip Davies
My hon. Friend is right. Clearly, he has been diligent, as always, in reading that report. He may well be sorry that he missed the opening part of the debate; we missed him, too. We are pleased that he has made it.
Mrs Main
My hon. Friend alluded to tourism. I do not know whether he is aware of the comments of Peter Hampson, who, at the time of the report that my hon. Friend mentioned was director of the British Resorts and Destinations Association—BRADA. He opined that the
“provision of toilets becomes absolutely fundamental…most journeys start and finish with people going to the loo.”
He observed that toilet provision was fundamental to any major tourist destination, and that it was crucial to get it right. The proposal is, as Thomas Crapper might have said, a bad way forward for our toilets. Facilities cannot be good if people have to pay every time. Some elderly people and people with young children need to use the toilet very frequently. The proposal must be a no-no for most cities.
Philip Davies
My hon. Friend is right. We all know how important toilet facilities are. When we go to a restaurant, we probably judge it as much on the provision, cleanliness and accessibility of the toilets as on the service or the quality of the food. I am as sure as my hon. Friend that Thomas Crapper would be turning in his grave if he thought that we were even contemplating the clause.
Jacob Rees-Mogg
I must disagree with my hon. Friend —for the first time in his excellent speech—on the way he judges restaurants.
Philip Davies
I suspect that my hon. Friend visits far better quality restaurants than me. If I had his means, I am sure that I would, too. However, I have to go to establishments where sometimes you take a bit of a risk when going to the toilet.
Mrs Main
Not only restaurants pride themselves on their toilets. I was privileged to visit the Isle of Mull a few years ago. There is a little toilet block in the middle of nowhere, which two ladies tend beautifully. It has daffodils, other flowers and pictures, and they take pride in it. Many communities and restaurants take pride in their toilets, and I agree with my hon. Friend that that is a mark of a premises and a community.
Philip Davies
Despite the fact that my hon. Friend also probably goes to far better quality restaurants than I do, I am pleased that she agrees with me. However, I do not want to get sidetracked. I was in danger of that—my hon. Friends were leading me astray—but I must return to the matter in hand.
Swindon borough council conducted a report on environment and leisure in 2007. A councillor stated:
“We have been surprised by the strength of feeling in relation to this issue”—
that is, toilets. He went on:
“Our toilets are a matter of significant inconvenience in terms of location, accessibility and condition, which impacts upon public health, the image of the town and limits the quality of life for many people.”
It is important that we focus on the importance of such matters to local residents and to visitors. Given that London is such a centre for tourism, we ignore that at our peril.
The Department for Communities and Local Government report reiterated the need for easy access to toilet facilities for older members of the public. A 2005 survey by Changing Lives, nVision and Future Foundation showed that
“people aged over 55 and families with children are most inclined to take holidays and short breaks in this country. At the same time, these groups are more likely to place a higher value on being able to access a toilet.”
Given that most of those people who take a short break in this country are more than likely at some point to go to London, it would be perverse to allow the clause to apply to London alone.
The Department for Communities and Local Government report concluded:
“Being able to access a toilet is a fundamental need for any visitor. Tourists need more local information, more signposts. They cannot simply go home, into work, or their local pub to use the toilet. Tourists choose their destinations carefully, drawing on their previous impressions, talking to friends and family, looking up feedback on the internet. Sense of destination—the extent to which it has met a visitor’s needs and made a strong and positive impression—is therefore vital to secure repeat trade and sustainable economic development.”
Would it not be a shame if people’s experience of visiting London, which should be fantastic, was ruined by the simple problem of being unable to get into a toilet when they needed one because turnstiles had been erected?
We should also bear in mind that we have the Olympics this year in London, which has led to other sporting events, such as the world athletics championships. We are told that they are the great opportunity to showcase London and to boost the tourism industry in this country. We are told how important public toilets and their accessibility are to tourism, tourists and visitors. Would it not be bizarre, when we are spending all that money to attract more tourism to London, to do something that would adversely affect it?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman is obviously well briefed—he has certainly flushed out a lot of the subject that he wanted to flush out—but I am worried that he is beginning to pad out the debate on this measure. He may wish to speak to other measures, and it might help his good self to move on a little. I am sure that we have heard about turnstiles and the toilet break quite thoroughly, and a lot of hon. Members have managed to intervene.
Philip Davies
If you will allow me, Mr Deputy Speaker, I shall conclude on the issue of toilets by saying simply that the Guild of Registered Tourist Guides formed an inconvenience committee, which produced a report—[Interruption.] This is the final thing I want to say on toilets. The committee described what it considered to be the perfect public toilet. It said that the perfect public toilet should be “free”—that is perhaps not much to ask in a world-class city—
“with sufficient cubicles for men and women so that large groups can use them without lengthy queues…clean and well maintained…safe and well lit…appropriate access aids such as hand rails on stairs, plus separate facility Cot wheel chair users…hot and cold water and soap for hand washing…Hand drying with paper towels as well as the hot air machines…Attendant on duty…Litter bins for disposal of hand towels…Nappy changing room…Feminine hygiene provision…Information and health education…Early morning and evening opening hours…sitting area for people to wait…and…Machines offering various necessities”.
That is it. You will have heard, Mr Deputy Speaker, no mention of turnstiles in that description of the perfect British toilet. I therefore do not know why on earth we would want to introduce them.
Bob Blackman
I am almost tempted to say that people would choose to live in such a wonderful place as opposed to just using it for the purpose for which it is intended. Will my hon. Friend say who will pay for that wonderful service if it is free of charge for the general public?
Philip Davies
I do not want to go on further about public toilets, suffice it to say that I hope my comments have shown that such things should be the responsibility of local authorities.
Jacob Rees-Mogg
To go back to an amendment to which my hon. Friend spoke earlier, that could be a matter of free enterprise. Groups of concerned citizens could come together to improve the trade in their area and ensure that there are convenient public conveniences.
Philip Davies
That is right. My hon. Friend proposes a good solution, but however they are paid for, local businesses pay rates and expect services in return. Such facilities are important in attracting people to a location. The local authority will benefit from those just as much as local businesses.
Andrew Percy
It is not just businesses that pay rates and expect services; people pay their council tax to their local council for such provision. They see their council spending millions of pounds over a budget period on communications and other stuff, but they expect basic stuff such as public facilities to be provided for them to use for free. That is what most of the council tax payers my hon. Friend and I represent want.
Philip Davies
I suspect my hon. Friend is right. It is no good local authorities going to the Government or the council tax payer and saying, “We need ever increasing amounts of money to pay for this, that and the other, and one of those things should be toilets,” and then saying, “By the way, we’ve got all the money in from the Government and the council tax payer to provide toilets, but we do not want to provide them free of charge.”
Philip Davies
I really ought to press on and get to the other amendments. I do apologise to my hon. Friend.
I will deal with amendments 17 to 20, as they go together. Amendment 17 would delete subsection (1)(a) of clause 7, which deals with charges for permitting the use of objects, and so on, on the highway. Subsection (1)(a) refers to
“the cleansing of streets in which permitted activities take place so far as that cleansing is attributable to permitted activities”.
Basically, amendment 17 would prevent local authorities from being able to charge restaurants, theatres and so on for having to clean the streets outside such venues. Amendment 18 is a technical amendment, consequent on amendment 17, and would delete “and” in clause 7(1)(a).
Andrew Percy
In a previous incarnation, I was a licensing chairman. We were keen as a local authority to encourage businesses to use street furniture because we thought that it took away many of the problems that we were dealing with. It improved antisocial behaviour and saved us money on some of the problems we faced on the streets at the time. Street furniture was therefore something to be encouraged. Rather than charging businesses for it, we were keen for them to have it.
Philip Davies
I am sure that my hon. Friend is right. I am sure that there are lots of benefits for local authorities from businesses doing that. The point is that if having street furniture is so good for the local authority and the local residents, surely the council should be encouraging businesses to have it. However, clause 7 would only discourage businesses from putting their street furniture out on the high street, because the local authority will clobber them if they do so.
Mrs Main
In another incarnation, I was on the Select Committee on Communities and Local Government when it published a report on markets. The sense of place that my hon. Friend has described was actively encouraged in that report, because of that sense of the community meeting and coming together. Indeed, Leicester has overhauled its market, giving the community a greater sense of space and place by creating the sort of piazza feel that he has described. I cannot think that it would be helpful to incur additional charges for encouraging something that is for the benefit of the local community.
Philip Davies
I am sure that my hon. Friend is right; indeed, I recall attempts, whether successful or not, to try and develop a café culture in this country. It appears to me that clause 7 is designed to try and thwart such a café-style culture, and I do not really understand why we would want to do that.
Jacob Rees-Mogg
I think that it is much worse than that; this is a fundamental attack on the rights of property. The explanatory notes state:
“Subsection (2) of section 115F provides that except where the council are the owners of the sub-soil beneath the part of the highway in relation to which the permission is granted, the charges may not exceed the standard amount”.
That is, the council may charge only reasonable costs. That means that a council would be able to charge someone for doing something on that person’s own land, which must be wrong.
Philip Davies
I commend my hon. Friend for being so eagle-eyed; I agree with him wholeheartedly on that point.
One of my problems with the Bill, and with this clause, is that they appear to intend to damage small businesses. We are in a terrible economic situation at the moment, and we know that small businesses are the engine of economic growth, so why on earth would the House want to pass measures that appear to have been designed to clobber small businesses? That is completely beyond me. These kinds of extra costs and bureaucracy are meat and drink to big businesses. I used to work for a large multinational company, and although these extra requirements were sometimes an irritation, we could afford to employ legions of people to deal with them. Many small businesses are struggling in the current climate, however, and they do not have the financial capability to deal with all the extra regulation and costs that the Bill seeks to impose on them. There seems to be a mindset that owning a small business is a licence to print money, that everyone who owns one has millions of pounds in the bank doing absolutely nothing, and that it is the job of a local authority to extract as much of that money as possible from them.
Mr Gray
My hon. Friend is speaking with great passion from his own libertarian standpoint, but I have to admit that, unless I have got this wrong, I shall have to divert from his stance. Is he seriously suggesting, for example, that cafés and pubs should be able to place their furniture on our high streets and throw litter on the ground in the sure and certain knowledge that the local authority would clear it up at its own cost? Surely the “polluter pays” principle should pertain in such circumstances. If a café has chairs and tables on the street, is it not reasonable to expect the proprietor, who is making a profit out of the enterprise, to take responsibility for clearing up the mess?
Philip Davies
I think that my hon. Friend the Member for Brigg and Goole (Andrew Percy) addressed that point. His local authority actively encouraged this kind of activity because it helped to keep the streets clean and tidy. The best thing I can say about the clause, which I am seeking to delete, is that it is a solution looking for a problem. My hon. Friend made it clear that there is not a problem, and that more businesses should be encouraged to make use of street furniture.
Andrew Percy
Powers already exist to deal with any problems with street furniture. This can be done through the planning system or the licensing system. It can also be done using environmental or antisocial behaviour legislation. The tools already exist to deal with people who are creating a problem but, generally, businesses are just trying to make a living and to do the best for their customers and their communities. If local authorities need to tackle any problems, they can do so using existing legislation.
Philip Davies
I absolutely agree. Plenty of legislation is available to local authorities if they feel so strongly about these matters. Surely it should be our principle that we use existing legislation first, before introducing any more.
Mr Nuttall
The answer lies in section 93 of the Environmental Protection Act 1990, which relates to clause 5. I suspect that this formed part of my hon. Friend’s remarks before I arrived in the Chamber.
Philip Davies
Absolutely; I totally agree with my hon. Friend.
The proposals would also affect certain hard-pressed theatres, and the petitions from the Society of London Theatre and the Theatrical Management Association made it clear that their members were already making their own arrangements for the cleaning of pavements in their local areas, and that the basis for an additional charge had not been made clear. We seem to have the ridiculous situation in which businesses could potentially be charged three times for this work: once through the payment of their rates, for which they expect a service in return that they are not being given; a second time through paying to do it themselves, as the local authority is not doing it; and, now, for a third time, they could be faced with the proposed extra charge to deal with any ensuing problem. Businesses are in danger of being charged three times for the same service, which cannot be fair in any shape or form.
We must introduce some common sense into these rules. I hope that my hon. Friend the Member for Finchley and Golders Green will make it clear which, if any, of the amendments he will accept.
Mrs Main
My hon. Friend is making a very powerful point. There is also the possibility, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) said, that areas of London will positively and actively encourage people to use the street space to ensure that the public realm is more attractive for tourism and so on, which will mean that the charges are waived, but, in theory, in other parts of that authority other people could be charged for exactly the same activity. Surely that is inequitable.
Philip Davies
My hon. Friend is right.
I want to bring my remarks to a close, because I am sure that other people have points that they want to raise. I said earlier that my hon. Friends the Members for Bury North and for St Albans knew far more about public toilets than I do, but let me end with the final two amendments tabled by my hon. Friend the Member for Christchurch, amendments 3 and 4. We can cover them very quickly.
Amendment 3 leaves out lines 10 and 11 of the preamble on page one. It would delete:
“It is expedient that the range of premises in London in respect of which street litter control notices can be served should be extended”.
That is consequential to my amendment 15, which would delete clause 5. If the amendment were accepted, we would need to leave out those lines from the preamble. Amendment 4 also amends page 1 and the preamble and it leaves out lines 12 and 13, thereby deleting:
“It is expedient that London borough councils should be able to install turnstiles in public conveniences”.
As those who have been following the debate closely will know, amendment 16 seeks to strike out clause 6, which relates to imposing turnstiles in public toilets. The amendments are merely consequential so, on that note, I will allow others to let me know their thoughts on the amendments.
I hope that I have been able to make the case that the provisions as they stand are very un-British. It is our responsibility in this House to protect people’s freedoms and to improve the Bill by accepting the amendments.
Chris Williamson (Derby North) (Lab)
I can give an assurance that I will not be speaking for nearly two hours on this subject; I am sure the House will be relieved to know that. However, I urge hon. Members to oppose the amendments proposed by the hon. Member for Shipley (Philip Davies). Let us recap: every single London borough is in favour of the Bill—
Chris Williamson
I shall come on to that point, but let us be clear that every London borough, of every political persuasion, favours the Bill. Surely it is not the role of this House to frustrate the will of the locally elected people who have come together and proposed what I consider to be a perfectly reasonable Bill, which I would have hoped could pass through the House without the objections and the—I believe—spurious arguments that have been put forward to suggest that it will lead somehow a diminution of British freedoms. It is complete nonsense to suggest such a thing.
Andrew Percy
If the hon. Gentleman thinks these provisions are so great, why does he not come to the House and propose a similar Bill to apply to Derby? Does he think they should apply to Derby, and if they should apply to Derby as well as to London, why is there not a Bill for the whole country?
Chris Williamson
Here we go again with another red herring from a Member who does not represent a London constituency. Let me address his question about where the London MPs are, because it is pretty significant that not one of the Members opposing the Bill is from London. We see the hon. Members for Shipley, for Christchurch (Mr Chope), for St Albans (Mrs Main) and for North East Somerset (Jacob Rees-Mogg)—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We cannot have five Members on their feet trying to intervene at once.
Chris Williamson
I shall give way to the hon. Member for North Wiltshire (Mr Gray).
Mr Gray
I am listening carefully to the hon. Gentleman, who poses an interesting constitutional conundrum: that because a group of local authorities is in favour of something—at least he believes that to be the case; I have not seen any evidence of it—this House should not have the right to consider that matter. Surely it is only reasonable that we, as the sovereign Parliament of the United Kingdom, should have the right to say whether we believe something to be correct and a good thing, even if every local authority is unanimously in favour it.
Chris Williamson
The hon. Gentleman makes a perfectly valid constitutional point, but I thought that his party was in favour of localism and wanted greater local determination on the ground. Indeed, the hon. Member for Harrow East (Bob Blackman) made that point earlier.
Mrs Main
The hon. Gentleman will have to excuse me, but I find it vaguely insulting to hear that my constituents in St Albans, 50% of whom travel into London, will have no concerns about things that may be imposed in London. He might be aware that under the previous Government, much to my chagrin, St Albans was designated as part of the north London arc for planning purposes. To say that I am not concerned about what happens in London is quite specious. We are concerned because many of our constituents will visit London and use the facilities.
Chris Williamson
I hope that the hon. Lady will forgive me, but I did not say she was not concerned about London. I merely pointed out that it was rather significant that every MP who has stood up today to oppose this Bill represents a seat that is not in London. I find that an extraordinary thing for Members from outside London to do, given that every London borough favours the Bill, and it has already undergone considerable scrutiny in this House and the other place. It was scrutinised by a Select Committee, to which the hon. Member for St Albans has referred, and there was a three-hour debate on Second Reading. For goodness’ sake, how much more scrutiny does it require?
Philip Davies
That is what we are doing at the moment: scrutinising the Bill. The hon. Gentleman seems to be implying that the Bill relates only to London citizens and residents, but it does not; it applies to anyone who comes to visit London. I do not know what people in Derby do, but people in Shipley certainly come to visit London; many of them do, and I suspect that people from Derby do as well. The Bill will apply as much to his constituents as to anyone who lives in London.
Chris Williamson
That is a fair comment, but in our system of local government, people in London elect the councils to represent them and to take care of boroughs’ interests. I repeat that every one of those boroughs has come together in support of the Bill, which has already received considerable scrutiny. Also, many of the provisions in the original Bill have been amended or removed. Indeed, the Bill has been weakened by the removal of some measures—for example, on houses in multiple occupation and on food safety—again on the specious ground that they somehow diminished British freedoms. That argument is complete nonsense; nevertheless, the House has had its say, Members’ views have been considered and various amendments have been agreed to. Therefore, in view of the scrutiny to which the Bill has already been subjected and the fact that it has already been considerably modified, I hoped that we could proceed with greater speed today and agree the remaining provisions of the Bill, which is still worth supporting.
Mrs Main
Before the hon. Gentleman moves away from the fact that not a single London MP has spoken against the Bill, I note the absolute paucity of Members on the Opposition Benches, and the fact that not one London Member from the Labour party is standing up to defend the Bill.
Chris Williamson
If the hon. Lady studies the record, she will see that Members from London on both sides of the Chamber have spoken in previous debates—when, as I have said, the Bill received considerable scrutiny—and made their views well known. So I think that is a fairly unreasonable point to raise.
Andrew Percy
I want to probe the shadow Minister further on the issue of MPs who do not represent London not being allowed to vote on the Bill.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think I have heard enough from both sides. We ought to be discussing the amendments rather than that sort of detail, and I am sure the shadow Minister wishes to deal with them.
Chris Williamson
Thank you for that guidance, Mr Deputy Speaker. I was aiming to get to the substance of the Bill, but have been deflected somewhat by interventions from Conservative Members. However, I did not say that Members from outside London should not be allowed to vote on the Bill at all; nothing could be further from my mind.
I shall move on to the specifics of the amendments on street litter notices. A perfectly reasonable proposition is being advanced. I think the hon. Member for Shipley was labouring under a misapprehension, because powers already exist for orders to apply to commercial and retail premises, with the agreement of the Secretary of State. The Bill simply seeks to extend those designations, with the permission of the Secretary of State, to public buildings such as educational establishments and hospitals.
The hon. Gentleman spent a long time talking about smoking litter. As a result of the smoking ban there are now undoubtedly considerable quantities of smoking debris, and it is right and proper that local authorities should have another tool in the locker, as it were, with which to address that very real problem. It does impact on the street scene and the visual amenity of an area. I have pointed out that local authorities are already under considerable strain, given the cuts that have been made to their funding, and if they are to fulfil their obligations to their constituents—and to people from Shipley and Christchurch and every other corner of the United Kingdom who visit London—it is incumbent on those local authorities to find ways of ensuring that the street scene is not despoiled by every sort of litter—particularly smoking litter, which creates a real problem. It would be a significant step in the right direction in improving the street scene and helping local authorities to find other ways of ensuring that they can provide the adequate services that local people in their respective boroughs elect them to provide.
Mr Gray
I thank the hon. Gentleman who is being very generous and is advancing a cogent and interesting argument, but I have two problems. First, he used the expression “another tool in the locker” with regard to these provisions. That is precisely one of the arguments that we are advancing against them: there is already a tool in the locker—the Environmental Protection Act 1990. Why should we require another tool in the locker to achieve something that can be achieved by existing legislation?
Secondly, while I am on my feet, will the hon. Gentleman clarify for us the degree to which the provisions would apply to the parliamentary estate, and the Government estate down Whitehall?
Chris Williamson
I accept that other provisions are available, but they do not necessarily go far enough, and they leave local authorities in a difficult position because of the inadequate resources at their disposal. I repeat that hon. Members should support alternative ways in which authorities can deal with such problems.
Mrs Main
The hon. Gentleman sums up my worries about the measure. Legislation already exists under which a person who drops litter—even a cigarette butt—can be prosecuted or held to account. I am worried that the Bill might introduce a lazy way forward under which a charge regarding cigarette litter would relate to the building that it is in front of, instead of there being a system of wardens or enforcement officers targeting the people who drop the litter. I worry that the Bill shifts responsibility from the individual culprit to a building, and that is a cost-cutting measure if ever I heard one, in so far as only one person is employed to prosecute the owner of a building or a business, and we will not be chasing the people who drop litter.
Chris Williamson
With the greatest respect, the hon. Lady is not living in the real world. If only the avenues that she advocates were available for local authorities, it would be incredibly costly for them to deliver the improvements that the additional measure in the Bill could achieve. She talks about cost-cutting measures, but local authorities are being forced to make significant reductions to their budgets, so it is unreasonable to say that they should not be given this additional tool to help them to fulfil their obligations. We should bear in mind the fact that such a provision already exists for commercial and retail premises. The measure in the Bill would help to ensure that streets were kept clean and tidy, and then the resources that are used to deal with that problem at present could be deployed elsewhere to ensure that the whole street scene was clean and tidy for everyone’s enjoyment—local residents and visitors from St Albans and elsewhere.
Mr Knight
The hon. Gentleman has said three times that some local authorities are short of resources, so he is touching on Conservative Members’ concern. Does he share my worry that authorities that are short of resources might use the enhanced penalty charge regime under the Bill to raise the money that they are short of?
Chris Williamson
Her Majesty’s Opposition are genuine localists. We trust local government and those who are elected to serve their communities to do the right thing and not to abuse powers. Hon. Members should remember that the Secretary of State’s approval will be needed if the powers are to be exercised, so there are sufficient checks and balances in place.
It is incumbent on hon. Members to trust the elected councillors in the London boroughs to use the powers at their disposal responsibly. There is no evidence to suggest that London boroughs behave irresponsibly, and it is unreasonable of those Conservative Members who oppose the Bill to suggest otherwise.
Let me move on to turnstiles—
Chris Williamson
If I may, I will pass on that question. Perhaps the sponsor of the Bill will clarify the situation.
Mike Freer
I understand that the Palace of Westminster, as a royal palace, would be exempt, but that because Whitehall Government buildings are public buildings, they would be expected to keep their perimeters clean and tidy.
Chris Williamson
I am grateful to the hon. Gentleman for providing that clarification in response to his hon. Friend’s question.
Philip Davies
The hon. Gentleman is disparaging my comments, but has he read the Select Committee report to which I referred? I remind him that the inquiry was conducted at a time when the Committee’s Chairman was a Labour Member, as were the majority of its members. Is he disparaging not only what I said, but what that Labour-dominated Committee put in its report?
Chris Williamson
To be fair, the hon. Gentleman himself said that he had not read the report. Indeed, he said that until the hon. Member for St Albans (Mrs Main) pointed it out today, he had not been aware of its existence. It is a little rich of him to say that he is relying on the report’s recommendations today, when he was not previously aware of its existence.
Philip Davies
We cannot allow that to stand. The hon. Gentleman clearly was not listening. I said that I was not aware of the report at the time, but had become aware of it only when I started to look at the Bill. I made it clear that I had read the report; in fact, I quoted extensively from it in my speech. How on earth he can conclude that I had not heard of it until today is beyond me.
Chris Williamson
I am grateful for that clarification. I may have misheard, but I thought the hon. Gentleman told his hon. Friend the Member for St Albans that it was only as a result of her intervention today that he had become aware of the Select Committee report.
Chris Williamson
I have given way quite a lot already, so if the hon. Lady will bear with me, I will try to make a little progress.
To sum up, for the reasons I have outlined, there is a strong case in favour of the provisions on turnstiles in public toilets. I therefore hope that hon. Members will give the provisions their support.
Mr Gray
The hon. Gentleman is making a thoughtful speech. On the question of public lavatories—I find it difficult to use the word “toilet” myself; I prefer “lavatory”; interestingly, the heading of the clause refers to “toilets”, but the body of the clause uses “lavatory”—does he not agree that the provision will lead to regressive taxation? There is no question but that we all want public lavatories to be readily available; the question is how we pay for that. Does the local authority pay for it as a responsibility under council tax or should it be the users who pay? If the cost were £1, £2 or £5, that would be a regressive tax. I do not mind paying that for a lovely, splendid, gleaming public lavatory, but what about the poor young family on benefits with five children? What will they do?
Chris Williamson
I can give the hon. Gentleman the benefit of anecdotal evidence that I have gleaned in speaking to young families, elderly people and disabled people about the retention of public toilets. Of course we would all love to have access to free facilities, but if there is a choice between losing the facility altogether and introducing a modest charge, 100% of the people I spoke to were prepared to pay the charge. As for the charge being prohibitive, we have to trust locally elected representatives to do the right thing. If local people think that their local councils have done the wrong thing, they have the perfect remedy at the ballot box, and can vote them out accordingly.
There are adequate safeguards and there is support for the measure. Yes, in an ideal world, if we could provide facilities across the piece free of charge, I would certainly sign up to that, but in the real world local authorities are under increasing pressure, even before elections, so it is not unreasonable to give them the opportunity to raise finance to maintain those facilities in good order and stop them closing down. All too many public conveniences across the country have closed because of the lack of resources available to the local authority.
Finally, clause 7 refers to “the use of objects” on the public highway. Again, the Bill makes a perfectly reasonable proposal to give local authorities the ability to levy a charge. At the end of the day, businesses using the public highway should not be able to use it to gain an income as a matter of course or right—it should be seen as a privilege. If street furniture is put out in that way, it often adds to the costs that fall on the local authority. Bearing in mind the fact that those businesses gain an additional profit as a result of being given the privilege of putting street furniture on the public highway, it is not unreasonable that local authorities should be empowered to levy a small charge to help pay for the additional costs incurred by the local authority as a direct consequence of that street furniture being put on the public highway. The alternative is to say that the council tax payer should pick up the tab, which would be completely unreasonable.
I am surprised that some Government Members—I am pleased that this does not apply to all of them—have suggested that the taxpayer should subsidise businesses in that way. That is the wrong thing to do, and a bad principle. On that basis, I support clause 7 and oppose the amendments tabled by the hon. Member for Shipley.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I now have to announce the result of the deferred Division on the motion relating to the mayoral referendum for Birmingham. The Ayes were 303 and the Noes were 203, so the Question was agreed to.
I also have to announce the result of the deferred Division on the motion relating to the mayoral referendum for Bradford. The Ayes were 304 and the Noes were 202, so the Question was agreed to.
[The Division lists are published at the end of today’s debates.]
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
May I briefly pull together the chains of this debate and address the topics that have been raised? I should say, as a matter of principle, that this is a private Bill. Any local authority, like many other institutions, private and public, is entitled to bring private legislation before the House. It is equally the entitlement of all Members in this House to scrutinise such legislation.
The Government, historically, have taken a neutral stance towards private legislation, and we do so again, as I said when the Bill was debated previously. I simply observe that all the matters that are the subject of this debate are legitimate areas of concern to local authorities. The appropriate stance is not one upon which the Government would seek to impose a blanket or one-size-fits-all view of policy. It is right generally to favour local discretion, but none of that impinges on the right of the House to scrutinise particular pieces of private legislation brought before it.
I merely observe that in relation to smoking-related litter it is, as a matter of policy, the Government’s view that the “polluter pays” principle should generally be advanced. In relation to turnstiles in public toilets, it is of course to be noted, as has been observed, that all public conveniences are now subject to the equalities legislation, which requires accessibility of services to disabled people, and I hope, therefore, that my hon. Friend the Member for Finchley and Golders Green (Mike Freer), who speaks on behalf of the promoters of the Bill, will be able to reassure hon. Members who have raised points that anything done, were the House to pass the Bill, would not impinge on that. Clearly, it is important that any kind of turnstile, however described or constructed, is consistent with such legislation.
Philip Davies
I accept that my hon. Friend wants to remain neutral on this because it is private business, but surely he cannot remain neutral on something such as toilets, and whether there should be turnstiles, given that it was his Department in 2008 that produced a strategic guide, “Improving Public Access to Better Quality Toilets”. Do the Government still stand by the strategic guide that they issued in 2008? If so, they cannot support clause 6.
Robert Neill
The guidance was produced by the previous Government. It is not the policy of this Government to seek to impose minute controls over the manner in which public lavatories are provided in this country. Nor is there a particularly left or right, in political terms, means of providing public lavatories. I restate what I said: there is a duty upon all local authorities to make provision of such facilities. It is desirable that they do so, and the guidance sets out useful means of achieving that. Equally, the technology in question is not a matter for the Government. We seek to ensure that the technology achieves the broad policy objectives of making proportionate and appropriate facilities available, and that any technology employed is consistent with legislation governing issues such as equalities. I am sure that my hon. Friend the Member for Finchley and Golders Green will be able to address that.
In relation to clause 7 and the placing of objects on the highway, the Department for Transport has already said that it does not object to the clause, provided that there are checks in place to ensure that any costs recovered are reasonable. I hope that my hon. Friend will address that. I simply observe that many hon. Members have spoken and I join them in saying that many people find the development of a café culture in this country to be desirable and enjoyable. One would not wish to see that prejudiced, but that is not say that the area is not a matter of legitimate concern for local authorities. The whole purpose is to achieve a proper balance and equilibrium in this matter, and to ensure, particularly in the current climate, that any charging regime is used with care and discretion so that—this is the Government’s general view—any charging is not disproportionate or excessive, and does not place undue burdens on business so as to get in the way of the desire that I am sure all would share to encourage growth and enterprise, particularly in the leisure and small business sector. Having stated the Government’s position, without further ado, I am content to leave the House to weigh up those matters.
Mrs Main
I congratulate my hon. Friend the Member for Shipley (Philip Davies) on his forensic evaluation of the measure and rise to support his amendments. I have listened with growing concern about the lack of justification for the use of a sledgehammer to crack this particular nut. I am amazed that the hon. Member for Derby North (Chris Williamson), who tried to defend the proposal, could not answer some of the significant questions he was asked. I have heard of no pilot study showing an attempt to deter bad behaviour, such as the dropping of cigarette butts, and facilitate good behaviour, such as the provision of ashtrays and similar street furniture. Let us be realistic. It is only a relatively short time since the previous Government put in place new regulations that led to more smoking outside, but local authorities have not had time to catch up with the fact that people are dropping cigarette butts because there is a lack of places to put them. Many local authorities have recognised that.
I do not think that we need new legislation to burden businesses with additional costs. We should be encouraging local authorities to work with local people to ensure sensible, reasonable and proportionate behaviour, but this is not a sensible, reasonable or proportionate proposal. Businesses might suddenly have an additional charge placed upon them so that they have to clean up a stray cigarette butt that someone has casually thrown out of a car window. It should be the polluter who pays. I am pleased that my hon. Friend the Minister said that the Government’s position is that the polluter should pay. This proposal is not that the polluter should pay, but that the poor sap who ends up with litter in front of his door should pay, which I think is outrageous.
As my hon. Friend the Member for Shipley said, big businesses can often swallow such charges. They shrug and say, “Yet another piece of legislation placed on our shoulders, but we’ll cope.” That is not the case for small businesses. Smaller businesses often have smaller premises and are shut at night, and in the morning they might find a whole raft of cigarette butts to clean up because they are down an alleyway or in a smaller part of town. Many of the smaller businesses in St Albans are down small, historic streets and suffer from antisocial behaviour, such as people urinating at night or dropping cigarette butts. I do not believe that those businesses, many of which take pride in their premises and already clean up in the morning, should have to pay a financial penalty for something that is in no way their fault.
I know that other hon. Members want to speak on the matter, but I do not think that any justification has been given today for creating more legislation. I am a natural conservative and believe that we should be chopping regulations. I thought that we had a pledge that for every bit of new legislation that came in we would throw out another, but this is another regulation on the businesses, particularly small businesses, that we are supposed to be supporting. There is no getting away from it: this has to be a money-generating scheme for local authorities.
Mr Gray
I am listening carefully to my hon. Friend, as I did to my hon. Friend the Member for Shipley (Philip Davies). With regard to the “polluter pays” principle, she is right to say when a cigarette is casually dropped by a passerby, it is clearly impossible for that polluter to be charged. None the less, is there not some merit in the principle that the vicarious polluter should pay? In other words, there could be a café on the pavement or a cheap McDonald’s food takeaway outlet, and even though it may not be McDonald’s itself that has dropped a piece of litter on the pavement, it would be reasonable to presume that it had made a profit from providing the hamburger to the person who dropped the litter. It is therefore not unreasonable that it should be asked to pay for clearing it up.
Mrs Main
My hon. Friend makes a valuable point, and I never thought that I would be speaking up to defend McDonald’s, but that is exactly what happens in St Albans already. McDonald’s, Sainsbury’s with its carrier bags, and other big companies recognise the issue, work with the local council and help towards paying up. Sainsbury’s recognises that, if one of its carrier bags has drifted up against a fence 100 yards away from its supermarket, it will still help the local authority to clear it up—and is willing to do so. It is the poor small businesses that cannot carry the can. With huge businesses such as McDonald’s, people say, “That’s their packet, thrown away 100 yards or so from the restaurant,” but that is recognised, so often it will help local authorities to clear up and to contribute towards schemes that do so.
The clause will, however, penalise small businesses. What about them? If we were to have, as one of my hon. Friends proposed, separate legislation for branded litter, we might find it easier to enforce, but that is not what the clause is about—unless we are going to chase Marlboro and ask it to pay. The person who drops the litter should ultimately be responsible, and if that means better council surveillance and the recognition that it has to clean those areas more, so be it. Small businesses should not have to pick up the tab.
Mr Gray
I used a slightly bad example in my previous intervention by citing a big business and talking about McDonald’s; my point was the vicarious polluter pays. Let us imagine that a small business, such as a café, is set up on the streets of St Albans, and around its tables there is an increase in litter. Surely the reasonable presumption is that its customers have produced it and, therefore, that the café will have written into the cost of creating the cup of tea and sticky bun a cost to cover clearing up the litter.
Mrs Main
My hon. Friend makes a valuable point, but I—and others in the debate have made this point—am not aware of any business that would want to serve its customers in a pigsty. Most cafés and small businesses take great pride in what happens outside their premises, but the Bill deals with litter that has been dropped and, in particular, with cigarette butts, not with the tomato on the floor which has come out of someone’s BLT from their local shop.
Philip Davies
Do we not return to the point that, if this is an issue, it is an issue throughout the country? On that basis, therefore, the House should propose legislation that applies everywhere in the country. The issue does not apply only to London, so it is completely unnecessary and undesirable to introduce such legislation for London only.
Mrs Main
My hon. Friend makes the point that this is private business and it nominates only London, but the point I am trying to make, which he made eloquently earlier, is that the clause is a sledgehammer to crack a nut. It is not necessary, and there is plenty of regulation.
Chris Williamson
The hon. Lady contradicts her own argument, because she says that businesses would not want to serve food and drink in a pigsty, implying that they already keep such areas clean and tidy. So I do not understand her objection to the clause.
Mrs Main
My objection to the clause relates, in particular, to smaller premises. We have talked a great deal about cigarette butts, but the clause deals with litter that has been deposited on those premises not necessarily by the businesses themselves—and they will be charged. This point has been made umpteen times: most responsible businesses keep their premises clean anyway; we have enforcement officers from the council who go around and can speak to businesses that are not operating in such a fashion; and current legislation and levers can be employed to tackle the issue.
Philip Davies
On my hon. Friend’s exchange with our hon. Friend the Member for North Wiltshire (Mr Gray), will she bear in mind that such provisions already apply to commercial and retail premises? The Bill, however, seeks to extend them to any premise other than a dwelling. McDonald’s and others are already covered by the law. This Bill will extend that provision to other organisations totally unrelated to selling the things that my hon. Friend the Member for North Wiltshire talked about.
Mrs Main
I thank my hon. Friend, because this debate has been going for some time, and he did make that point quite cogently at the beginning.
Principally, when we have argued about the amendment, we have addressed cigarette butts and the fact that outside premises such as an estate agent or an office, which does not serve food and drink or use wrappers, those butts will be considered litter and, therefore, be directly attributed to those premises.
Mrs Main
I shall not give way; I wish to expand my point.
My point is that small businesses that see a pile of littered cigarette butts outside but do not have smokers on their premises will be held directly responsible for clearing up those butts because they have been dropped outside their front door. That, to me, is as unfair as when poor St Albans residents find that things have been thrown into their gardens by loutish people walking home at night. It is not reasonable that a business will have to pay for this in addition to what it already pays the local council to keep its streets and premises clean.
Chris Williamson
The truth is that local authorities can already apply this provision to retail and commercial properties, as the hon. Member for Shipley (Philip Davies) said. The proposal will extend it to public buildings. If the hon. Lady objects to the powers that are currently available to local authorities to insist on commercial and retail premises tidying litter away, she should put forward an alternative piece of legislation to repeal those powers.
Mrs Main
The hon. Gentleman is trying to lead me down corridors. He has not come forward with a single type of premises that would not be covered reasonably under the legislation that we already have. That is the nub of the matter. We are introducing something that is totally superfluous and unnecessary. There is plenty of legislation for local authorities to use. I support my hon. Friend the Member for Shipley on the amendment because it is sensible, reasonable and proportionate.
I am sorry to say that I want to return to the issue of toilets. It was abundantly clear from the hon. Gentleman’s weak argument that he had not read the Communities and Local Government Committee report. He certainly had not read all the supporting information that was brought to the Committee.
Philip Davies
I hope that my hon. Friend is talking about the hon. Member for Derby North (Chris Williamson).
Mrs Main
I am. My hon. Friend the Member for Shipley was obviously well versed in the report.
If the hon. Member for Derby North had read the report and the supporting evidence that was given to the Committee, he would have seen that charging was dealt with in the report. It was deemed to be a matter for the local authority. If he had read the evidence, he would have known that one can never charge enough to make toilets pay. What people are prepared to pay—whether it is 10p, 20p or 50p—does not cover the cost of running any public toilet. The report left charging to the discretion of the local authority, but it expressly said that we should do away with all turnstiles, even turnstiles in stations. The report dealt with that dilemma.
Although the Committee received representations from many groups representing people with disabilities, those with urge incontinence, the aged and people on low incomes saying that charging for toilets was unreasonable when people already pay car parking charges when they go into city and town centres, the report accepted that to impose a regulation that said that toilets must be free would be unreasonable for many local authorities. It did not accept that there was a need for turnstiles.
Fundamentally, we have to believe the 2008 report because it is the biggest listening exercise that we have on people visiting public conveniences and it specifically looks at London. This proposal is contrary to all the evidence that was received at that time. It was accepted that charging was acceptable, but it was not accepted that turnstiles were acceptable. This proposal brings the two together. If people wish to charge for the use of London toilets, so be it. I might not think that it is a good idea and other people might not think that it is a good idea, but I am realistic enough to accept that the taxpayer might have to claw back some of the cost of the provision for tourists and all the people who come into towns and cities. However, some turnstiles were abandoned under the 1963 Act and the 2008 report stated that all turnstiles should be abandoned. That is the most recent thing that we have and it was produced by a Committee that had a Labour Chair, Phyllis Starkey, and was dominated by Labour Members.
To introduce turnstiles in whatever shape or form—not necessarily the little winding things that we walk through—would be a retrograde step. The Committee did not specify a type of turnstile; we said no to all turnstiles. I therefore suggest that the hon. Member for Derby North has not read the evidence of the people who came to the Committee and said that they found the toilets in London appalling.
Philip Davies
Just to make it clear that I have read the report, I have a copy of it here. Will my hon. Friend make it clear that the report was agreed by the Committee unanimously? There was no division along party lines. People across the parties agreed with the report unanimously.
Mrs Main
I thank my hon. Friend for reminding me of that. In fact, one might ask why we did a report on public toilets. [Interruption.] Yes, we were desperate. I seem to remember that it was because it had been highlighted to us that the state of the toilets in London was a problem. We heard every joke under the sun: “flushed with success”, “a penny for our thoughts”, and so on. However, it was amazing—
Mr Deputy Speaker (Mr Lindsay Hoyle)
I think I can be tempted to put the Question because we have been debating this group of amendments for more than two hours. In fact, it has probably been more than three hours, if I remember rightly, given the debate that was started by Mr Chope last time. I therefore think that we should test the will of the House.
Question put forthwith, That the Question be now put.
The House proceeded to a Division.
Mr Deputy Speaker
I ask the Serjeant at Arms to investigate the delay in the No Lobby because there seems to be a blockage.
Mr Deputy Speaker (Mr Nigel Evans)
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to take amendments 23, 24, 41, 25 to 28, 42, P1, 29, 30, 43 to 45, 31, 46, 47, 32, 48, 49, P2, 33, 60, 51 to 55, 34, 56 to 58 and P40.
Jacob Rees-Mogg
As you know, Mr Deputy Speaker, I have tabled a number of amendments and have also put my name to a number of others. I would like, if I may, to start by outlining why they have been proposed. The simple reason is that the Bill as drafted is extraordinarily illiberal and seeks to extend the powers of the state into the nooks and crannies of people’s lives as they carry out otherwise lawful activities that would be banned by the Bill, unless the amendments are passed.
I remind hon. Members of what was said in the Conservative party manifesto about protecting civil liberties. We said:
“Labour have subjected Britain’s historic freedoms to unprecedented attack. They have trampled on liberties…giving public bodies extraordinary powers to intervene in the way we live our lives.
The impact of this has been profound and far-reaching. Trust has been replaced by suspicion.”
The amendments I have tabled with many of my hon. Friends aim to restore that trust and to ensure that what is done is proportionate and that civil liberties are maintained. You will not be surprised to know, Mr Deputy Speaker, that some of those civil liberties go as far back as the Magna Carta and they are being undermined by the clauses that we are discussing.
Under the clauses, unidentified officers of councils who might or might not show identification may confiscate things from people, directly contrary to the Magna Carta, which states:
“No free man shall be taken or imprisoned or dispossessed, or outlawed or exiled, or in any way destroyed…except by the lawful judgement of his peers or by the law of the land.”
This is not the law of the land, it is the law of some minor council official—some minor bod—going around and confiscating people’s goods without having the proper authority to do so, a proper process by which to do it or a legitimacy that would give people confidence in the laws we are passing in this Parliament.
Philip Davies
I agree with my hon. Friend wholeheartedly. During a previous discussion on this Bill, he proposed that those council officials should wear bowler hats. If they identified themselves with a bowler hat, would he be happy for them to take on these powers?
Jacob Rees-Mogg
I am extremely grateful to my hon. Friend for raising that point, because I specify in amendment 60, which has been selected, that these officers of the council should be in uniform when they carry out their duties. I have left it to the discretion of the council to determine what those uniforms should be.
Jacob Rees-Mogg
Absolutely right. I thought it might not be a bad idea if they had the relevant council’s coat of arms.
Mrs Main
Does my hon. Friend have any suggestions as to how this would be promoted, because my constituents, should they come down to London, might not be aware of the purpose of these people in bowler hats or other uniforms and might not be aware of their powers in the regulations.
Jacob Rees-Mogg
I am very sympathetic to what my hon. Friend says, and I add that many of my amendments take chunks out of the Bill. Therefore, visitors from St Albans, North East Somerset and all over the country—from Leeds, indeed, where the shadow Minister is from—
Jacob Rees-Mogg
Derby—I am so sorry. Those visitors would not be caught out by all sorts of strange people. [Interruption.] I do know where Shipley is.
Mike Gapes (Ilford South) (Lab/Co-op)
Has the hon. Gentleman or any of his colleagues who oppose this legislation had discussions with the Mayor of London about whether he thinks the Bill should be supported or blocked?
Jacob Rees-Mogg
I am very grateful for that intervention. The Mayor of London is a man whom I admire enormously and whose writ I should think runs across the whole of London and probably should run across the world. However, he stood down from this Parliament and it therefore is not fitting that his views should be authoritative. In this instance, I do not happen to know what they are.
Philip Davies
I certainly do not know what they are, but perhaps my hon. Friend ought to listen to the hon. Member for Ilford South (Mike Gapes) because no doubt he has just come from a meeting with the Mayor of London. He certainly was not here when we debated the first group of amendments, but he seems to think that this is very important.
Mike Gapes
I was watching the proceedings from my office, and I could not believe that any Member of Parliament who had the best interests of London at heart could possibly oppose the proposals, which are supported by Labour members, Conservatives and Liberal Democrats in local government all over London, as well as by the Greater London Authority. It is only neanderthals and people who have no idea of what is in the interests of our capital city who oppose the Bill.
Jacob Rees-Mogg
Now we see the true face of socialist authoritarianism coming into the House. Those people do not bother with debating in this Chamber. No, they sit watching television in their eyries above and then they condescend to come down and they deign in all their fine glory to say to us that we from Somerset, from Hertfordshire and from other great counties across the country should not have a say in the legislation that affects the law of the land. This is the type of authoritarianism and nanny-stateism that we have come to expect from the socialist.
Let me refer to clause 20(2), which we propose to pull out of the Bill because it is a singularly nasty measure. What it says, Mr Speaker, although I am sure I do not need to remind you, is that if somebody wishes to sell their car throughout all the boroughs of Greater London, advertises it on the internet and then puts it outside their house, they will be committing an offence.
Mike Freer
I hate to correct my hon. Friend because I so enjoy his perorations in the Chamber but he is incorrect. It is not intended that a householder selling their own vehicle outside their own house should be captured by the measure. It is only vehicle traders who in the course of a business sell vehicles on a residential street, using the internet, who will be caught—not residential households.
Jacob Rees-Mogg
That may not be what is intended, but it is, unfortunately, what is said and it is what is described in the notes written by the promoters of this Bill in relation to part 4 on licensing.
Mrs Anne Main (St Albans) (Con)
On a point of order, Mr Speaker. I seek your guidance. Is it appropriate parliamentary language for a Member of Parliament to call other hon. Members neanderthals, particularly when they have not even been anywhere near the debate or participated or engaged in it? Do you think that that is a somewhat judgmental statement?
Mr Speaker
Well, I think if we are going to have a prohibition on judgmentalism, we are setting ourselves rather than exacting test. What I would say to the hon. Lady is twofold. First, I am not aware, though it is not relevant to the appropriateness of her point of order, who the target of this intended abuse was—although I could try to speculate about it—but secondly, if the target of the intended abuse is at least one Member that I can think of, I rather imagine that far from complaining about it, he will take it as the greatest possible compliment that has ever been paid to him.
Jacob Rees-Mogg
On a point of order, Mr Speaker. I think many hon. Members would consider being called neanderthals remarkably modern.
Mr Speaker
I note the hon. Gentleman’s value judgment, and indeed his sense of humour. If there are no further points of order, we come now to the petition.
North Sea Oil and Gas
(12 years, 3 months ago)
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That the draft City of Birmingham (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.
The House divided: - Ayes: 303 / Noes: 203 - Question accordingly agreed to.
That the draft City of Bradford (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.
The House divided: - Ayes: 304 / Noes: 202 - Question accordingly agreed to.
Nicholas Soames (Mid Sussex) (Con)
Thank you, Mr Speaker, for allowing this short Adjournment debate on North sea oil and gas taxation. It is a very serious and important matter. It is not one with which I have previously been concerned, but I think the Economic Secretary should know that I was invited to a briefing the other day, given by the oil industry, on the impact of taxation changes in the North sea and it excited my interest. I had always been aware of what a very substantial business it was but had no idea of how very important it is to the United Kingdom economy on the scale of employment and other matters, and I thought it right to bring the matter to the attention of the House. I am therefore, as I said, very grateful to you, Sir, for allowing the debate.
The United Kingdom is indeed fortunate to be endowed with significant resources of oil and gas. Over the years, hundreds of millions of pounds of hard-earned, always risky and sometimes very courageous investment and endeavour have allowed the nation to realise these resources, and for the British people to enjoy the substantial benefits of employment, sophisticated and high-level skills at all levels of the skill chain, tax revenues and balance of payments, and to develop a leading position in the global oil and gas supply chain—all of which has stood this country in good stead down the recent years.
Figures for 2011 show that around £16 billion was spent by the oil and gas industry on exploration, development and operations. This included £8 billion in new capital investment, an increase of 25% over 2010. I know that the Economic Secretary will agree that in anyone’s terms these are massive numbers, and thus once again make the oil and gas sector the single largest investor of all the industrial sectors in the United Kingdom.
The positive benefits of this remarkable industry are not confined to Scotland. They extend throughout the United Kingdom, supporting employment for more than 400,000 people, and those jobs are widely distributed throughout the whole country. Unsurprisingly, of course, a substantial proportion—45% in fact—are in Scotland, but that means that 55% of the jobs, which is the majority, directly benefit employment throughout the rest of the UK.
The taxes forecast to be raised from the industry in 2011-12 include some £6 billion in income tax, national insurance contributions and corporation tax paid by the supply chain companies, with an additional £11 billion from taxes on production itself. That amounts to 25% of all the corporation tax received by the Exchequer. The production of indigenous oil and gas improved the balance of payments by £35 billion in 2011, thus halving the trade deficit, and the supply chain added another £5 billion to £6 billion with exports of oilfield goods and services. Incidentally, that aspect of the industry is doing extremely well here and overseas, and it is flying the flag for Britain effectively.
At a time when Britain above all else needs growth and the energetic encouragement of inward investment, I regret to have to say to the Economic Secretary that all is not well in this crucial sector that is so important to our economy. Production declined by 17% from 2010 to 2011, which was the biggest fall seen by the industry in the past 40 years. As a result, future tax receipts will decrease rapidly without new investment. Receipts for 2011-12 have already suffered a £2.3 billion downgrade due to lower than expected production.
Jim Shannon (Strangford) (DUP)
I understand that the reduction in North sea oil production is due to many factors, but one of them is maintenance. There have been many maintenance programmes over the past 12 months. Is the fact that production is down, because maintenance is up, one reason why taxation is down?
Nicholas Soames
The hon. Gentleman raises an important point. I am sure that it is germane, but the decrease that I am highlighting is, in my judgment, due to the taxation regime.
The United Kingdom already imports around 10% of its oil and almost 40% of its gas, and such imports will increase rapidly without the benefit of new investment. The Government’s decision in March 2011 to increase tax rates on the industry, which increased the top tax rate to 81% and the corporation tax rate to 62%, is inevitably and regrettably having a chilling effect on the leading indicators of investment.
While total capital investment this year has increased to about £8 billion from £6 billion in 2010, that was largely due to development momentum from previous years. Worryingly, just nine new fields accounted for 40% of the total capital invested and all the development projects were well advanced prior to the tax increase.
The signs of lower investment in the future are already apparent. Indeed, my hon. Friend the Economic Secretary will see from the Department of Energy and Climate Change’s latest energy trends analysis a significant impact on drilling activity, with exploration wells down 50% in 2011.
It is from that exploration drilling that the future large capital investments will flow. The March 2011 tax increase reduced the value of future projects by 25% overnight. My hon. Friend knows that the future development of the North sea depends in large part on clever, technical solutions at the very forefront of what is manageable for marginally economic fields, but the increase in the tax rate has rendered many of those future fields uneconomic to develop. That serious matter for the country must be addressed.
I gather from the estimates of Oil & Gas UK, the industry’s trade body, that investment of at least £12 billion in more than 1 billion barrels of oil and gas resource will not occur without some stimulus. That is 60,000 jobs that will not be created and a loss of a benefit of £15 billion to £20 billion to the budget deficit as a result of the tax increase.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
I remind the House of my entries in the Register of Members’ Financial Interests to do with the oil and gas industry. I intervene to reinforce the right hon. Gentleman’s point about the industry’s importance not only to the north-east of Scotland, but to the whole of the United Kingdom. I thank him very much for bringing the spotlight to bear and bringing the message south that it is the whole United Kingdom that would benefit from tax reform.
Nicholas Soames
I am grateful to the hon. Gentleman, whose championship and knowledge of the industry are well known. He emphasises the important point that this is a United Kingdom industry, relevant to the whole country, and therefore even more important than might otherwise be the case.
Oil & Gas UK estimates that a further 1.7 billion barrels of the UK’s oil and gas resource would be recovered if the uncertainty about decommissioning reliefs—a very difficult subject—was resolved.
In an industry with highly mobile capital, investment will flow to other, more attractive destinations. We must not let that happen. Further repeated change in the taxation regime of this vital UK industry is causing great uncertainty in the boardrooms of both the international and the home-grown companies involved in all sectors of the industry. That inevitably has a further unhelpful impact on inward investment, at a time when we should be doing all we can to attract that investment, as well as the jobs, the tax receipts and the balance of payments benefits that come with it. I am sure the Economic Secretary agrees that doing that is even more important given the Government’s genuine determination to generate greater growth in the economy, without which many of the difficult problems we face cannot be dealt with.
I am aware that discussions are ongoing between the Treasury, the Department of Energy and Climate Change and the industry to try to find ways to stimulate investment, and I welcome that. I ask the Economic Secretary to confirm that she understands—I know she does—the serious impact on inward investment being caused by the tax increase and other adverse changes in taxation, and the damage to the future tax base and future tax receipts. Further, will she confirm that the Treasury will give serious and detailed consideration to measures to protect future investment through extensions to tax allowances and giving certainty on decommissioning reliefs, and see to it that those measures are enacted or headlined in the Budget, to the greater advantage of the British economy in the years to come?
The Economic Secretary to the Treasury (Miss Chloe Smith)
I am extremely pleased to have the opportunity to discuss this subject in the House at perhaps greater length than I did when my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) asked me on Tuesday for an update on the ongoing work. I thank him, and, of course, my right hon. Friend the Member for Mid Sussex (Nicholas Soames) for calling for this evening’s debate, and for their contributions to it.
My right hon. Friend is absolutely correct: the oil and gas sector makes a huge contribution to the UK economy. He is right to draw out the statistics as he has done this evening. I concur that UK oil and gas provide about two thirds of the UK’s primary energy needs, and even as we move into a less carbon-intensive future, they are set to remain a vital part of our energy system for years to come. The Government recognise the crucial role the sector plays in driving jobs and growth. Together, oil and gas contribute about 2% of the country’s GDP, and the industry supports about 350,000 jobs directly and indirectly across the UK, as well as another 100,000 in exporting goods and services. Of course, as my right hon. Friend said, it is also source of skills, expertise and technology. Finally, as my hon. Friend the Member for West Aberdeenshire and Kincardine said, oil and gas are a UK-wide concern. Indeed, that has an impact close to my constituency around the coast of Norfolk, where there is a North sea gas industry.
It is vital that we do what we can to maximise the economic recovery of our indigenous hydrocarbon reserves. It is for that reason that the Government remain committed to encouraging investment and innovation in the North sea. We recognise that tax plays an important role in helping us to achieve those objectives. The Government’s aim is therefore to shape a tax regime for the North sea that encourages exploration, development and production while ensuring a fair return for the UK taxpayer.
That is not always an easy balance to strike, and at times it can require us to make difficult decisions, to which my right hon. Friend the Member for Mid Sussex has referred. Everyone who listened to the Budget 2011 will understand that. In the Budget the Government sought to soften the impact of record pump prices for car fuel on households and businesses by abolishing the fuel duty escalator and replacing it with a fair fuel stabiliser. We also cut fuel duty by 1p a litre on Budget day. Since then, we took steps in the autumn statement further to ease the burden on motorists to ensure that there will be only one retail prices index increase in fuel duty in 2013. All told, that means that the Government will ease the burden on motorists by approximately £2.5 billion in 2012-13. At a time when businesses and families across the country are coping with extremely difficult economic circumstances it is right that we should support them as best we can through these tough times, including looking at measures that affect the cost of living such as fuel pricing.
Given the economic situation and the state of the public finances, that support must be funded. In the Budget, at a time of exceptionally high oil prices, the Government felt that it was fair that the oil and gas industry should make an additional contribution through an increase in the supplementary charge. Indeed, that increase was voted on in the House.
At the time of the Budget the Government made it clear that although they accepted that some marginal projects might be affected, they did not expect a significant impact on investment or production over the forecast period. To answer the points that my right hon. Friend raised about receipts, investment and the state of the industry, our assessment of the impact on production was supported by the independent Office for Budget Responsibility. Moreover, while the oil price remains well over $100 a barrel, the fair fuel stabiliser means that taxes on oil and gas production will reduce if the oil price falls below a certain threshold.
Indeed, there have been announcements of further significant investment in the basin over the past few months. For example, BP has said that with its partners it will invest almost £10 billion in North sea oil and gas over the next five years. That investment will provide an extra 3,000 jobs across the oil and gas supply chain. 2012 could be a prosperous year for the North sea. We expect a substantial increase in offshore field approvals over last year’s figure, and many other discoveries are being worked up for the years ahead.
None the less, I recognise that those tax changes have not been welcomed by the sector. I understand that, and I acknowledge the recent news suggesting that there were lower levels of exploration and drilling than expected last year. I believe a range of factors contributed to that, and tax is only one part of what my right hon. Friend will accept is a complex situation for businesses seeking to operate in and around the basin.
Tonight’s debate gives me an opportunity to tell the House a little more about the way in which we have engaged closely with the industry since the Budget last year to ensure that we fully understand its views on a range of fiscal issues related to investment. Only last week, as my hon. Friend the Member for West Aberdeenshire and Kincardine noted, I chaired the first meeting of a new oil and gas industry fiscal forum. It was attended by the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) and representatives from more than 15 companies across the sector. We had an extremely productive discussion covering the points that my right hon. Friend the Member for Mid Sussex has noted, including decommissioning and field allowances. I believe that the fiscal forum will continue to provide a structured basis for further dialogue between industry and Government on oil and gas tax issues.
We hope this will complement the excellent work already being taken forward by the industry and Government task force, known as PILOT. This group seeks to contribute to the long-term future of the UK continental shelf through initiatives focusing on reducing costs, eliminating barriers and maximising the effectiveness of resources.
In addition to these wider discussions, the Government have been engaging closely with industry to consider changes to specific elements of the tax regime that could unlock additional investment in the basin. For example, in line with our commitment at last year’s Budget, we have been working closely with industry with a view to making a further announcement on greater long-term certainty about decommissioning tax relief at Budget 2012. We have also been considering the case for improved or new types of field allowance to act as a further incentive to investment in marginal fields.
Hon. Members here today following the debate will know the range of detail encompassed in the representations made to me and my colleagues by industry, and they will be aware of the number of different proposals put forward under those headings of decommissioning tax relief and field allowances. Following such detailed discussions with industry, we have already increased the rate of the ring-fence expenditure supplement from 6% to 10%, which helps to ensure that existing field allowances work more effectively and equitably.
I am very encouraged by the positive engagement that we have had with industry on these issues. I believe that this sort of constructive dialogue can only be helpful as the UK continental shelf matures and the tax regime has to evolve accordingly. We remain committed to supporting the sector in realising its ambition of fully maximising the growth and jobs potential from our oil and gas industry. Ultimately it is in everyone’s interest that we foster a regime that continues to promote investment and harness our mineral wealth effectively, while also ensuring a fair return for the UK taxpayer from this valuable national resource.
Once again, I am very grateful to my right hon. Friend for having brought this debate here tonight and for giving me a short opportunity to expand on some of the valuable work that we have been endeavouring to undertake to support the industry and meet the aims that I know he shares.
Question put and agreed to.
Westminster Hall
(12 years, 3 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
UK-India Trade
(12 years, 3 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Charles Walker (in the Chair)
Colleagues, I am afraid that an enormous number of hon. Members want to speak in this hour-and-a-half debate. Even if you limited yourself to six minutes each, it is unlikely that we will get everybody in. If you want to try to limit yourselves for the sake of other colleagues, that is fine.
Stephen Hammond (Wimbledon) (Con)
Good morning, Mr Walker. It is a pleasure to serve under your chairmanship. It is an honour to initiate this debate, and I am grateful to Mr Speaker for selecting it.
First, I declare an interest: I chair the Conservative parliamentary friends of India group and had the pleasure of travelling to India on official visits in 2009 and 2011, and I begin the debate in that light. I am an unashamed friend of India and believe in the need to strengthen, deepen and improve the United Kingdom-Indian relationship on matters of geopolitical importance, culture, education and particularly trade.
Hon. Members who are historians will know that the UK-Indian trade relationship stretches back some 400 years, with the UK initially being a huge importer of spices, textiles and food items. By the 1850s, the relationship was such that the percentage of total UK trade in goods with India was 8.5% of our trade. Throughout the early decades of the 20th century, the UK enjoyed a huge, growing surplus in bilateral trade, but with independence came caution on the part of India and a distrust of international trade and capital. That was witnessed by the fall of India’s share of world exports, from 6% to 2%. Consequently, by the 1970s, UK-India trade had fallen to just under 2% of total UK trade in goods.
Today, of course, it is a different environment. India is now one of the world’s fastest-growing economies. In respect of UK trade, our imports from India have risen by 250% in the decade 2000 to 2010 and our exports to India have risen by 140%. However, our relative position with this fastest of all fast-growing economies is revealing and shows the harsh reality. In 2000, the UK was the fourth most important location for Indian exports, but it was the seventh most important by 2010. In 2000, the UK was the third most important importer to India, but we had slipped to 22nd place by 2010. That dramatic decline may have many causes, but it is worth dwelling on, or at least making some observations about, why that happened.
First, our shared past and shared language can be both an opportunity and a barrier. I sense from a number of discussions that such familiarity caused an expectation on one side that contracts might be won, but the expectation on another side was that contracts had to be worked for. I suspect that the UK was perceived, in respect of many bids, as not having done the research into the bid process done by many European competitors striving to gain a foothold in that market.
Secondly, the UK was slow to exploit some of its traditional strengths, despite having those clearly signposted. A mark of a fast-growing economy is the need for infrastructure. The UK has been for many years one of the world’s leaders in world civil engineering and infrastructure, yet we were slow to embrace that and were often beaten to contracts by others. The same is true of higher education.
Thirdly, from 2000 to 2010, the UK appeared to concentrate more on European markets, with exporters regarding that as their overriding priority to the exclusion almost of other opportunities, whereas others saw Europe as one market and the world as their oyster.
I hope that the Minister says something about the Government’s position in ensuring that the mistakes of 2000 to 2010 will not be replicated in their policy of encouraging trade.
Latterly, there has been a complete refocusing. I am sure that every hon. Member in this Chamber welcomed the Queen’s Speech of 2010, which explicitly cited India as a destination for the UK to concentrate on in respect of trade. The Prime Minister’s visit in July 2010, with many senior industrialists, has set the tone, which I hope will continue for many years.
Mark Pritchard (The Wrekin) (Con)
On the importance of bilateral trade, does my hon. Friend agree that it is important that British companies are confident when doing business in India? Therefore, ahead of the Indian Prime Minister’s visit in June, it would be good if all outstanding matters surrounding the Commonwealth games were dealt with. Outstanding bills for companies, such as SIS LIVE—the British company that is the world’s largest satellite broadcasting company— need to be paid if British companies are to have confidence in doing business in India.
Stephen Hammond
My hon. Friend is known for his clear-sighted view of the future. He pre-empts remarks that I will make in the very near future. I share his sentiments. As he rightly says, we look forward to welcoming Dr Singh to the UK. I hope that his visit will be seen as a further expression of our shared values and common interests, but much more importantly, with regard to economics and trade, I hope that it will be regarded as a reiteration of the target of at least doubling bilateral trade in the next 10 years. I hope that my right hon. Friend the Minister will be able to say something about the plans in the business arena that he expects to see from Her Majesty’s Government in June.
David Simpson (Upper Bann) (DUP)
The Foreign Secretary made an interesting statement in December last year, saying that Asian consumer spending will reach a high of approximately £42 trillion by 2030. I am sure that the hon. Member for Wimbledon (Stephen Hammond) agrees that the Indian and Asian market is a vast one for British companies. However, the onus is on the British Government to make it easier for companies to export into Asian countries, by helping to remove a lot of the bureaucracy and paperwork that is tied up in relation to that.
Stephen Hammond
I thank the hon. Gentleman for that remark. I will deal with that point specifically in a few minutes. It is the job of government to ensure that there is an environment in which business can thrive. The onus is on both the British and Indian Governments, particularly with regard to some of the bureaucracy.
My hon. Friend the Member for The Wrekin (Mark Pritchard) mentioned SIS—Satellite Information Services. I declare that I have already spent a day in Delhi, meeting local journalists and local people, trying to ensure that that company receives the correct treatment that it deserves from the Indian Government. The contract was awarded to SIS to cover the Commonwealth games, against a difficult backdrop, including late access to the stadiums, and it was generally accepted that an outstanding job of coverage was completed. The troubles began at that stage, but the company has enjoyed the support of the UK Government, with interventions from Ministers in the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office, and from the high commissioner in Delhi.
In essence, for hon. Members who are not aware of this story, allegations of impropriety in the awarding of a number of contracts were made. Why such allegations arose may be speculated on: whether to do with domestic Indian politics or disappointed companies. None the less, in response to Opposition and media pressure, the Indian Government commissioned a high-level report, known as the Shunglu report, which has now concluded.
The issue is that SIS has not really been given a chance to state its case: it was not given the chance to submit evidence or to be questioned by the Shunglu Committee. Moreover, the company has still only received 60% of the contractual payment due to it, with 40% remaining unpaid, and it has had to pay a 10% subcontract, so 50% in terms of monetary value remains unpaid. It is a matter of regret that the committee failed to check and to verify some of the information in its report. It is a matter of even greater concern that the second report by the Comptroller and Auditor General failed to pick that up. SIS sought to resolve the matter, correctly, through diplomatic and commercial channels, but it is disappointing that the efforts by her Majesty’s Government and high commissioners from the United Kingdom and many other nations have not had success. I sincerely hope that the legal proceedings in India will not be involved.
On the point made by the hon. Member for Upper Bann (David Simpson) about some of the issues facing companies that trade with other nations, to many in the commercial world, the failure to settle a contract that was set up in good faith by an internationally respected organisation will be of concern, because it will show that if a company becomes involved in a long-running domestic political dispute, non-payment of funds could threaten its economic operation. In the sporting world, where the Commonwealth games were a success, India is scoring an own goal post those games, and there is a chance, as my hon. Friend the Member for The Wrekin said, that the visit by the Indian Prime Minister will be overshadowed by this matter. It is important to put that on the record.
Mr Laurence Robertson (Tewkesbury) (Con)
I know the company very well from my activities in the House. It is very strong in charitable work and many other aspects, and it is indeed bad that the matter remains outstanding after so long.
Stephen Hammond
My hon. Friend is, of course, correct. We can only hope that the Indian high commission in London will make that point to its Government. I know that my right hon. Friend the Minister has already made the point.
I return to the issues surrounding Dr Singh’s visit and the matters that we must reiterate to the Indian Government for doubling bilateral trade. We all accept the need to rebalance our economy, but we must exploit those areas of competitive advantage, and clearly a major one is and will remain financial services. The City of London corporation has been working actively in India for some time to build the City as the partner of first choice for the provision of financial services and to highlight the UK as a location of choice for overseas investment. The opening of the Mumbai office, and the lord mayor’s regular visits allow a continuing dialogue on the issuance of capital, insurance, asset management, infrastructure finance, consultancy, London exchanges, and legal matters. I could go on.
Our ability to expand trade in financial services would benefit from the removal of some of the restrictions that are in place on foreign institutions. There has been some liberalisation of the rules for foreign banks, which are now allowed to open 12 new branches a year, but there is a huge appetite among many international banks and particularly UK banks for a much greater allowance for branches in India. There is also countervailing pressure on UK banks that want to become established in India, not to open branches, but to form wholly owned subsidiaries, thereby receiving national treatment. They receive only partial national treatment, and that does not equate to the same treatment received by Indian banks that are trying to set up. I hope that the Indian Government will listen to the need for further liberalisation.
The same is true for both legal services and the accountancy profession. Broadly speaking, restrictions are such that internationally respected firms of lawyers and accountants are unable to practise on the Indian subcontinent.
Priti Patel (Witham) (Con)
India’s economic liberalisation has been taking place over the past 20 years, and things are moving fast. Does my hon. Friend agree that India must concentrate on sorting out business practices and ethics to ensure that all businesses in India and those in the UK that choose to go to India are not affected reputationally, as SIS has been?
Stephen Hammond
My hon. Friend is absolutely right. One of the greatest encouragements to international trade is certainty in the business environment, whether political, legal, accountancy or business ethics. She makes an outstanding point, which is absolutely correct.
I have touched on the financial services industry, and I hope that the Minister will outline what the Government are doing to ensure that pressure is maintained for further liberalisation of the area. There are other industries in which the relationship between the United Kingdom and India is growing and could be pivotal to us if we accept the opportunities. In the telecoms world, the UK has traditionally enjoyed, and still does, a competitive advantage over many countries in Europe and the world. It has been a leader in the development of mobile and tele-optic fibre technology and policy.
India suffers from a highly fragmented mobile technology market and might benefit if it were slightly less fragmented, but it is undeniably true that the market is dynamic. In one of the past six months, 18 million new mobile connections were made, and there is significant demand from the Government for the enhancement and expansion of broadband and some machine solutions to manage logistics. There is an opportunity for the UK telecoms industry, and it could become pivotal to our future.
The same is true of the higher education sector. One of the last high commissioners, His Excellency Nalin Surie, expressed disappointment that the UK had failed to grasp the opportunities that India thought that it was opening up to UK academic institutions and at its inability to open faculties in India. At last, over the past two or three years, there has been reversal of that. There are immense opportunities for new faculties and collaboration on high tech and pharmaceuticals, particularly in some areas of post-doctoral research. The UK higher education sector would do well to grab them.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member on bringing this debate to the Chamber. He referred to education and the adoption of cultural links. In my constituency, Orange district lodge No. 4 has been actively involved in raising money to build a school for orphan children and for their health. Comber rotary club has been raising money for polio vaccination. Business opportunities come through health links, church links and human rights links. Does the hon. Gentleman believe that such links are overlooked by the Government and should be encouraged?
Stephen Hammond
I agree entirely that there are huge opportunities outside the industries that I am talking about. Owing to pressure of time, I shall conclude my comments in the near future, but I am sure that colleagues will want to talk about opportunities and other industries. The hon. Gentleman is correct. I had the opportunity of seeing one of the major Indian health care providers and what it is offering to the UK. There is collaboration with UK pharmaceutical firms on drugs to the Indian generic market. There are huge opportunities.
The Indian economy will grow less slowly this year than in previous years, but at 9% it will still be one of the fastest growing economies in the world. That will inevitably bring pressure for further infrastructure development. The new five-year plan suggests that it wants $1 trillion added to its infrastructure budget for capacity in power, roads, rail, ports, aviation, housing, office and social infrastructure. The UK has not only civil engineering expertise and project management ability, but acknowledged skill in project finance. I hope that the UK infrastructure industry, in the widest sense, will embrace the opportunity of that size of development.
Jeremy Lefroy (Stafford) (Con)
Does my hon. Friend agree that one of the key drivers of bilateral trade is inward and outward investment? In my constituency, Perkins has just announced the building of a factory in India, and there is inward investment in the constituency of my neighbour, my hon. Friend the Member for South Staffordshire (Gavin Williamson), by Tata through Jaguar Land Rover.
Stephen Hammond
I thank my hon. Friend for his intervention. Indeed, I thank all the hon. Members who are intervening; they are helping me along with my speech. I was about to deal with inward investment. My hon. Friend is, of course, right. India may well be setting the pace at the forefront of the global economy. Indian companies’ entrepreneurship and management techniques are certainly influencing business practices across the world. However, let us be clear: the UK must not only welcome Indian investment into the UK, but be hungry for it and go out and seek it.
As my hon. Friend pointed out, there are huge advantages to investing in this country. They include the skilled work force and the certainty on law, politics and accountancy. Tata’s investment in steel production and car manufacturing is an example. Other Indian businesses have chosen to base themselves in London or elsewhere in the United Kingdom, partly because of the expertise and skills on offer. We must make certain that other Indian firms looking to invest know that Her Majesty’s Government stand ready to welcome Indian businesses. I hope that the Minister will echo the remarks of his colleague, Lord Green, who has said that
“those days of complacency on the British side are over.”
Britain is open for business.
Mr Virendra Sharma (Ealing, Southall) (Lab)
I congratulate the hon. Member for Wimbledon (Stephen Hammond) on obtaining this important debate. This issue is close to the heart of many members of the all-party group on India, as well as hon. Members more generally. Does the hon. Gentleman recognise the value of the state-based schemes to promote UK-India trade? I have worked closely with, for example, the UK Kerala Business Forum and the UK Telugu Association, both of which are making great progress in building links for investment going in both directions.
Stephen Hammond
The hon. Gentleman is, of course, right. I am sure that the Minister will want to refer to his remarks. As I said, it is the job of government to encourage and to provide the environment in which business can thrive. It is for business to grasp that opportunity. Dr Singh visits this country later this year. I hope that the tone and the tenor of the debate will ring out today and send the message that Britain is open for business and particularly for Indian business.
Mr Charles Walker (in the Chair)
Colleagues, as you can see, time is getting away from us. The winding-up speeches start at 10.38 am. The Backbench Business Committee is under-utilised at the moment, so I am sure that it would like to receive a representation from hon. Members who are not called to speak today.
John McDonnell (Hayes and Harlington) (Lab)
I congratulate the hon. Member for Wimbledon (Stephen Hammond) on securing the debate. It comes at a vital time in the trading relationship between these two countries, because the European Commission and the Government of India are aiming to conclude the free trade agreement during the EU-India summit on 8 February in Delhi. The next fortnight is therefore a critical opportunity—the last opportunity—for us to try to influence that agreement.
I urge the Minister to do all in his power to ensure that it is not just a free trade agreement, but a fair trade agreement. A number of significant and expert non-governmental organisations working in this field have raised serious concerns about the consequences for some of the poorest people in India of the free trade agreement as proposed by the EU at the moment, and are seeking amendments to the agreement in this last phase.
When I raised the question with Ministers at the Department for Business, Innovation and Skills, I was referred to the conclusions of the European Union’s sustainability impact assessment. The Minister pointed out that as a result of the FTA, there would be an overall reduction in both rural and urban poverty. The study does come to that general conclusion, but there are sections in the report, particularly relating to the rural poor of India, that give cause for concern. It demonstrates that there will be an increase in the wealth of the rural poor only if they are, for example, connected to the supply chains that will flow from the FTA and if they are in suitable locations, with adequate infrastructure. The problem is that most of the rural farmers do not operate with adequate infrastructure and are not organised in the way in which the FTA describes; nor is domestic policy likely to change that. Therefore, the impact assessment by the EU, as against one by our Government, is, in this and many other areas of the report, at best wishful thinking or at worst simply determined to prove the case for the FTA.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Gentleman touches on an important point. The UK farming industry and, in particular, small businesses that excel in the international market can assist in poor rural areas in India, especially in terms of delivering higher yields through best practice, and can assist in promoting trade between the UK and India.
John McDonnell
That is exactly right, and it is one of the issues that need to be dealt with in the final negotiations so that people are appropriately placed and organised to enable that to happen.
In contrast to the EU’s assessment of the FTA is the more realistic and deeply worrying alternative assessment of the potential impact of the FTA that was published only a few weeks ago, in December, by organisations working in this field: Misereor, the Heinrich Böll Foundation, Anthra, the Third World Network and Glopolis.
Lorely Burt (Solihull) (LD)
Like the hon. Gentleman, I am focused on the EU-India summit in February. Does he agree that that summit is not likely to achieve the free trade agreement that we all wish to see and that a major block relates to mode 4 services? I am referring to the negotiation of a temporary transfer of personnel from a partner country to provide a service to a corporation. If the UK Government can move on mode 4, we may well be able to move things along much better.
John McDonnell
There are real opportunities for the UK Government, with their vast experience of trading relations with India, to influence the FTA in a more realistic way, which will achieve all our objectives.
There was a previous assessment in 2008 by the organisation Traidcraft, with which many hon. Members have worked. It concluded that there were real concerns. It stated that
“the proposed…FTA…risks stripping away the very tools that India could use to re-balance the gains from growth and to ensure that the poor are not further marginalised.”
That reflected not just statements from NGOs, but a statement from the UN itself.
The joint report, published in December, focused on undertaking a right-to-food impact assessment—the impact on people’s ability simply to feed themselves. The results are worrying and warrant serious consideration by the Government in relation to the final drafting session for the FTA.
The FTA is designed to liberalise substantially all areas of trade. It contains sections on services, investment, public procurement, intellectual property rights and many other areas. It will oblige India to eliminate 90% of its tariffs applied to the EU within about seven years. The assessment by the NGOs focused on a limited number of farming or agricultural issues. I will give just some examples. Some 14 million Indian farmers are currently involved in dairy production. Most of them are small-scale, marginal or landless farmers. Their market access, incomes and right to food would be threatened if tariffs for EU skimmed milk power were cut from 60% to zero as planned.
Tony Baldry (Banbury) (Con)
India’s economy is growing at 7% a year. Does not the state of India have some responsibility itself to ensure that the benefits of that growth in its economy are more evenly shared among the people of India?
John McDonnell
Of course. In the negotiations to which I am referring, it is important that the UK Government in particular, with their influence in Europe, enable the transitional period of the next seven years to be used effectively, so that it does not impoverish people but ensures the growth and wealth of both countries.
I am giving just three examples; I am worried about a shortage of time. The dairy industry will be faced with agriculture in the EU continuing to be heavily subsidised. Reform of the common agricultural policy has not happened, so EU farmers will be relying on export refunds. The dairy quota has been abolished. They will increase their production and therefore put at risk many poor Indian farmers.
The risk is the same in relation to poultry keeping. About 50% of India’s landless and marginal farmers use poultry keeping to supplement their livelihoods. Again, they will be at risk as a result of the reduction from 100% to zero in the current tariffs that is taking place.
About 37 million people in India work in the retail sector. There are 10 million street vendors. It is envisaged that if multi-brand retail is opened up to EU retailers, such as Carrefour, Metro and Tesco, that will bring 1.8 million jobs, but possibly at the cost of 5.7 million people working in that sector.
There are concerns about land distribution, which is highly unequal in India, where 83.29% of farmers have an average land holding of less than 2 hectares and own only 41.42% of agricultural land. There are real concerns that the FTA’s protection for increased inward investment will hold up land reforms.
There are real concerns about third-country impacts. In the case of Bangladesh, the EU’s own assessment says that there could be a 0.5% loss of exports, which does not sound significant, but as the Bangladeshi garment workers union has pointed out, that could cost 150,000 women their livelihoods.
Given the FTA’s implications for India’s poor—I remind Members that the latest estimate is that 224 million people, or 26.9% of the population, live with chronic hunger—and given our concern about the significant weaknesses in the EU’s initial impact assessment, it falls to this Parliament and this Government to ensure that the FTA secures fair trade.
I congratulate the Government on having been courageous in maintaining their support for aid to India, but that support could be wiped out as a result of the FTA’s unfairness. May I therefore briefly suggest a number of things that could be inserted into the treaty to assist in protecting India’s rural poor?
First, before the FTA is signed, it should be agreed that the EU and the Indian Government conduct a comprehensive human rights impact assessment, and that should include the principles in the UN rapporteur’s right to food. That is in line with a 2008 resolution in the European Parliament, which agreed that such impact assessments should take place before trade agreements are signed.
Secondly, before the agreement is concluded, there should be meaningful consultation with all stakeholders, and particularly the vulnerable, with full openness and transparency. Thirdly, the tariff lines for poultry and dairy products should be exempted in the agreement at this stage. There should also be a mechanism in the treaty for identifying any other products that may need protection, particularly during the transitional period.
In addition, there should be a special safeguard mechanism to enable India to react to sudden import surges. There should also be no provisions in the treaty limiting the right to secure the redistribution of land. Finally, there should be a monitoring mechanism in the treaty to ensure the continuous assessment of the FTA’s human rights impact as a result of the trade in goods.
Those provisions are critical. We have a detailed knowledge of what has happened when FTAs have been concluded elsewhere in the world and not been properly scrutinised. They have not only failed to tackle poverty, but undermined the ability of individual Governments to reduce it. Armin Paasch’s report for Ecofair Trade Dialogue has evidenced and exposed the fundamental shortcomings of many EU FTA treaties.
It is not often that I pray in aid Peter Mandelson, but he argued in yesterday’s Financial Times that, before such a treaty is put in place, we have a responsibility to ensure that the domestic capabilities exist to enable it to be used to the best advantage of both the trading partners signing it. That has not happened in this case.
We have a few weeks to resolve this matter. If we do not act at this critical stage, the traditional Indian and UK relationship of good trade, which those of us who have spoken in the debate are urging should continue, could be undermined.
Mr Charles Walker (in the Chair)
Order. I remind colleagues that the winding-up speeches start in 34 minutes.
Tony Baldry (Banbury) (Con)
I shall make three brief points. First, following on from the comments of the hon. Member for Hayes and Harlington (John McDonnell), there is no stronger advocate in the House than I of the need for the UK to have a strong international development programme. As a former Chair of the Select Committee on International Development, I think we all owe a duty of care to the very poorest in the world. However, India, which has a nuclear programme and a space programme, and which spends a considerable amount of its GDP on defence, also has a duty of care and a duty to ensure that the growth of its economy is more fairly shared among its people. We should be careful that we do not find ourselves in a position where the west and Europe are somehow expected to look after India’s poor, while India’s middle and upper classes continue to get wealthier and, on occasions, disregard the poorest in their community.
My second point is this. When I was fortunate enough to be a Minister in John Major’s Government, we set up the Indo-British partnership initiative, so there has been no shortage of UK Governments seeking to engage with India and increase trade with it. However, as my hon. Friend the Member for Wimbledon (Stephen Hammond), who introduced the debate, accurately described, we have been falling down the league table very fast. Twenty years ago, we were very high in the league table, but we are now in something like 15th position. Some of the countries that have overtaken us, such as Nigeria, may well have done so because they are selling a lot of oil to India, but some work needs to be done by the Foreign Office, BIS and UK Trade & Investment to analyse why we are falling down the league table. What are other countries doing that is moving them further up it? In part, as my hon. Friend said, it is because the Indian Government still restrict activities in areas of the economy where Britain is strong, such as banking, insurance and legal services. However, that does not, of itself, necessarily explain why we are falling down the league table. We therefore need a solid piece of work and analysis in Whitehall by the Foreign Office, BIS and UKTI as to why that is happening.
My third and final point is this. Yesterday in the House, the Foreign Secretary announced a further round of sanctions on Iran. Two days ago, the Indian Oil Minister announced that India would seek to purchase considerably more oil from Iran, given the lowering of the price of Iranian oil. India has aspirations to join the Security Council, but it cannot show two faces: it cannot show one face to Europe, as a partner to Europe and the international community, and seek to be a member of the Security Council, but then show a different face to some of its neighbours in Asia. If international sanctions against Iran are to be effective, every responsible nation must enforce them, and that includes India and China. They cannot take advantage of the fact that the European Union and many other countries are imposing oil sanctions on Iran to seek to purchase cheaper oil from Iran for gold, which would have various other consequences. India must be a full player in the international community if it is to be taken seriously.
Barry Gardiner (Brent North) (Lab)
I am delighted to serve under your chairmanship, Mr Walker. In accordance with your guidance, I will try to speak exceedingly quickly. I am delighted to speak in the debate, and I pay tribute to the hon. Member for Wimbledon (Stephen Hammond) for initiating it. He has made many valuable points.
For the past 15 years, I have counted myself, and been counted, as a friend of India. In 1999, I founded Labour Friends of India, which I now once again chair. I set up and currently chair the all-party group on UK-India trade and investment. I declare those matters as interests. I have argued the case for, and often defended, India in Parliament. However, true friends do not just tell us what we want to hear, and today I want to be a true friend of India—yes, praising her development and economic progress, but also highly critical of her failure to achieve her full potential for economic growth.
There is no doubt that India’s growth is impressive. Like all the BRIC nations, she has consistently outgrown long-term predictions, with average growth of 7.45% between 2000 and 2011. India emerged practically unscathed from the international financial crash, with GDP dropping only as low as 5.8%—a figure unimaginable to us in the UK during peak periods.
The advancement in infrastructure has been clear to see for those who are frequent visitors, and the UN recently reported that India is on target to reduce her poverty rate from 51% in 1990 to 22% by 2015. The suggestion of the hon. Member for Banbury (Tony Baldry) that the Indian Government are not doing enough to tackle the country’s domestic poverty is frankly outrageous. However, of all the BRIC nations, India is the furthest removed from its potential, and the causes of that disparity show no sign of changing soon.
India’s failure to reform its markets, deal with the problem of corruption and establish a market conducive to foreign investment means that it has consistently failed to realise its potential for growth. If those structural problems continue to plague India in the years ahead, it will struggle to maintain the current rate of poverty reduction and development, and will stand no chance of building the infrastructure that it will require, just a quarter of a century from now, to deal with what will then be an ageing population.
On regulatory reform, India has consistently dangled the carrot of liberalisation in front of investors, only to renege on its promises and refuse to change. Making promises of reform that remain unfulfilled is more damaging than refusing to reform in the first place. Just last week, the central Government caved in to public pressure and paused the long-awaited retail sector reforms.
A recently released study estimated that those reforms would have opened the door to more than $1 billion of foreign direct investment in the food retail sector and increased the size of the organised retail market to $260 billion by 2020. That would have resulted in an aggregate increase in income of $35 billion to $45 billion a year for all producers combined, 3 million to 4 million new jobs directly, and 4 million to 6 million new indirect jobs. The Government also stood to gain by the move and would have expected to receive an additional income of $25 billion to $30 billion, by way of increased tax collection and reduction of tax slippages. That investment is not only on hold, but at permanent risk, as investors begin to question whether India will ever follow through its pledges on liberalisation.
Retail is just one sector where foreign investors are begging for the reforms that will allow them to start pouring capital into the country. Last week I met representatives from the UK’s banking, accounting, insurance and legal sectors. They told me that they had been poised to invest heavily in India for decades, but their patience, too, is wearing thin. In the retail banking sector, the largest foreign bank in India is limited to fewer than 100 branches, in a country with a population of more than 1 billion. It considers itself fortunate; the strict licensing laws have until now limited almost all other foreign banks to one branch in Mumbai.
With liberalisation, the banking sector would pour tens of billions of dollars into India. In the legal sector, the limitations are even stronger. No foreign lawyer is allowed to practise in India. The Indian market is dominated by small-scale practices rife with corruption and inefficiency. Liberalising the legal sector would improve productivity, pull billions of dollars of foreign investment into the country and go a long way towards eliminating the graft that stagnates that legal system.
Perhaps the best example of India’s hesitance on market reforms, however, is the EU-India free trade agreement—the longest awaited free trade agreement in European history. Time and again, negotiators have made compromises and offers, only for the goalposts to be moved. Despite compromises on medical patents, immigration and other areas, the Indian Government seem as far away as ever from signing.
India now insists that reforms in such areas as financial services and retail are for bilateral agreements, not EU-wide treaties. Those involved in the negotiations from an EU perspective have begun publicly doubting whether India wants to sign the treaty at all. The FTA exemplifies the failure of Indian leaders to grab the bull of reform by the horns, and drag India into the modern global economy.
It is not just market reform and liberalisation that hold India back. On a range of issues including the use of technology, agricultural productivity, education and the problem of corruption, India needs to do more. We know that India can transform sectors when it decides to. The infrastructure strategy for the current five-year plan is astonishing. The Government have predicted that $1 trillion will be spent on infrastructure over the next five years. That means billions of dollars of foreign investment that will revolutionise the infrastructure of the country and prepare it for its future needs in transport, energy and housing. It is just a shame that that bold vision is not repeated in other areas of the economy.
On corruption, Congress has repeatedly refused to take the steps that would not only mark the beginning of the end for corruption in India, but would reassure Indians, as well as foreign investors, that the Government are serious about tackling the problem. Anna Hazare and his supporters have been attacked. They have been deliberately frustrated and undermined by politicians from all parties.
Barry Gardiner
Other colleagues want to get in, so I will not take interventions.
The most recent version of the Lokpal Bill has question marks over it with respect to the independence of the body it would create and why senior politicians and judiciary should be excluded from its reach. A stronger Bill, which satisfied all the concerns, would have sent the message across the world that India will no longer tolerate corruption and graft.
I reiterate that I outline these criticisms out of concern for India, and in the hope that its Government will indeed make the necessary reforms to enable the country to bloom in the coming decades. But India is by no means alone in its failure to change.
Here in the UK, we have fundamentally failed to realign our trade and investment towards the economies that will offer the best prospects for growth and returns in the future. I praise the focus that the current Government have placed on trade with India, including the Prime Minister’s first overseas visit, but we need to do much more.
Between 2000 and 2010, the UK’s imports from India rose by 250%, while UK goods and services exported to India rose by 140%. Over the period, India has become a relatively more important trading partner for the UK. UK imports from India in 2010 accounted for 0.9% more than in 2000 and exports of goods and services to India accounted for 0.4 of a percentage point more than in 2000. That is to be expected. As India has grown in importance on the world stage, so it has grown in importance to the UK’s overall trade.
However, it is not against the percentage of overall UK trade that we should judge whether trade with India has grown enough, but against the percentage of overall Indian trade. That is the only way to see whether British companies are making the most of the opportunities available in India, and whether the Government are doing enough to prepare businesses and the general population for the shift in the balance of economic world power that will move eastwards in the rest of the century.
Despite growing at such a high rate, between 2000 and 2010 the UK fell from fourth to seventh in the list of India’s largest export markets, and was overtaken by Singapore and the Netherlands. Similarly, in terms of import partners, the UK fell from third in 2000 to 22nd in 2010. Most recently, we were overtaken by the Republic of Korea. The UK now provides only 1% of all imports into India. That shows that Britain is falling behind in the world race to provide India’s population with the goods and services they want. In our current economic situation, with the lowered demand of our domestic and European markets, we cannot afford that to continue. Our companies must begin to look to India far more as a source of growth and as an essential market for their future survival. The trade delegations and CEO forums will undoubtedly help to close the gap, but the Government need to be much more active in promoting India to British businessmen and entrepreneurs.
There are good programmes, which must be increased in size. The UK-India education and research initiative is a scheme designed to increase links between educational institutions in our two countries. Education is one sector in which India needs huge growth in the coming years, and it also happens to be one in which the UK is a world leader. The scheme establishes relationships between universities, but so far has involved supporting the development of only two new universities in India, and supporting a small number of exchange students.
If we are serious about targeting India as a major source of our future growth, we need to support tens of thousands of Britons to study in India and build the personal and cultural connections that will help them successfully navigate the Indian market in the future. We need to work with all UK educational providers to offer them active assistance in penetrating the Indian market.
My view of the relations between the UK and India is a real masala. I am profoundly hopeful, but also seriously worried. I am hopeful that India will make the changes needed to maximise its growth, eradicate poverty and prepare for the future, but I am worried that the required leadership may come too late. I am hopeful that British companies can take their proper place in the Indian market and help to provide our economy with growth for the future, but worried that UK businesses and entrepreneurs have become too hesitant to grasp the opportunities.
Finally, I note that the high commission does not have a presence here today. That is extraordinary for a debate of this nature on India. I have never known that to happen before, and it shows not only a lack of rudder at the high commission but a downgrading in the mind of the Indian Government of the importance of what we say in this Chamber, and of the UK in India’s relationships.
Mark Field (Cities of London and Westminster) (Con)
It is a pleasure to be here under your chairmanship, Mr Walker, and in a debate initiated by one of my close friends in Parliament, my hon. Friend the Member for Wimbledon (Stephen Hammond). I will speak, if I may, very briefly.
I have made two visits to India—in 2003 and in 2006. Between those years, there was a change in Government. What struck me was the confidence of the business and political classes in New Delhi and Bombay. I suspect that, six years on, there will be an even greater sense of a country that is forward looking and confident of the future, notwithstanding all of the issues that have been raised by hon. Members in this debate.
Above all, it is important that we do not see India as just another Asian nation. Both UKTI and the Foreign Office have tended to regard Asia as just one area, which is what we tend to do with eastern Europe as well; we see it as an homogenous area rather than recognising its great historical importance.
One of the issues that I hear time and again, particularly where our companies are competing against German companies, is that the German embassies based in India, China or South Korea recognise that their role is not to be some sort of propagandist for their country but to drill down and work out who is really important in the local community. Therefore, it is important to have attached to the embassies people who are there for many years, developing long-term relationships.
Mark Field
If the right hon. Gentleman does not mind, I will not give way, because other Members wish to speak.
There is a lot of doom and gloom at the moment. We have seen today that our economy has contracted by 0.2% in the past three months, which I suspect may be the precursor to a fully fledged recession in this country in the next few months. Clearly, there are major problems in the eurozone market, which are not going to go away any time soon. In fact, I fear that they will be there for a long time to come, because there is not the political will to drive forward. As a result, it is perhaps easy to be gloomy about the economic situation. One of the interesting things about the IMF report yesterday was that it was presented as being very negative, but even the most pessimistic scenario suggested that there would be global growth of 3.3% next year. Indeed, some 4% was suggested during 2011.
In a conversation with one of the two Chinese law firms that have opened in London in the past couple of years I mentioned the global economic recession. A partner, who was a Chinese native with perfect English, smiled and said, “Back home, we call it the north Atlantic crisis”. There is a very important lesson for us to learn. Amid all that doom and gloom, let us get out there and recognise that we have great strengths.
In relation to India, some of the important issues have already been mentioned. We clearly have some good connections on the manufacturing side, especially in the technology and bio-technology sphere. There is much that India can teach us. Nehru has that legacy of those five great technology universities that remain a great success.
The Minister has done a phenomenal amount of work in this area in often difficult circumstances. Privately, he knows that I do not entirely support our immigration policy and I suspect that, behind closed doors, he has some sympathy with my views. We need to be a beacon for the brightest and the best. We must encourage young Indian, South Korean and Chinese people to come to this country. If they spend two or three years as students here, they will be ambassadors for this country for the rest of their lives. I am afraid that our policy on the headline figures is wrong. [Interruption.] I do not wish totally to eliminate the Minister’s career, and I am sure that he has a few words to say.
The Minister for Universities and Science (Mr David Willetts)
I completely support the policies of the Government of which I am a Member. There is no numerical limit on the number of overseas students coming to study in Britain, provided that they have the proper qualifications and they are going to attend a legitimate higher education institution.
Mark Field
I do understand that. Will the Minister also recognise, though, that the message is that this country is not entirely open to those brightest and best people? We must have a message that we are open not only for business but for the brightest and best to come to this country.
Mark Field
If my hon. Friend will excuse me, I will not give way because others really do wish to speak.
As a London Member of Parliament, I believe that if we are to exploit these connections with India, we urgently need to invest in our infrastructure—what I am about to say now will give the hon. Member for Hayes and Harlington (John McDonnell) some satisfaction—which means a 21st-century airport. Even before Boris Johnson talked about an estuary airport on Boris’s island, I was a great believer in an entirely new airport. Patching and mending either Heathrow or Gatwick is not the right solution. A new airport will be one of the most positive messages that we can put across. We want to attract the brightest and best, particularly out of Asia. An estuary airport will provide the dozens of flights that we need each and every night to come through from those countries to land in London without disturbing the constituents of the hon. Gentleman or of many other London MPs. Thank you, Mr Walker, for allowing me to make a brief contribution.
Caroline Nokes (Romsey and Southampton North) (Con)
I congratulate my hon. Friend the Member for Wimbledon (Stephen Hammond) on securing this important debate and on having led, in September, a parliamentary delegation to India, in which I was fortunate enough to participate. Coincidentally, our delegation went to India at exactly the same time as a delegation of members of the Solent India Business Network. India is a large country and we did not manage to meet up.
I want to draw attention to the work done since 2009 to foster business links and trade relations between small and medium-sized enterprises in the Solent region, which the Minister will be particularly pleased about and proud of, and British business groups in India.
The delegation attended a conference in Pune and a historic memorandum of understanding was signed between the British business network in the UK and the British business group in that part of India. The co-chairmen of the network are a local solicitor, Amarjit Singh, and the deputy vice-chancellor of Southampton university.
Paul Uppal
In reference to the discussion that we had about attracting the brightest and the best, Leeds university is taking a lead on this with a campus in Bhopal. That is one way to get service providers and students working together around the immigration problem.
Caroline Nokes
I thank my hon. Friend for those comments. Pune university has a staggering 650,000 undergraduates, which is an enormous number compared with Southampton university. However, that does not prevent the two institutions from working together to share business visions and fresh perspectives. My hon. Friend the Member for Cities of London and Westminster (Mark Field) mentioned that young people are the future, and that is exactly the sort of initiative and message that is being promoted in the Solent region.
I am conscious that my comments about Anglo-Indian trade relations will be exclusively positive because that is the experience of the members in my constituency.
Priti Patel
I am delighted to hear that the experience of my hon. Friend’s constituents has been positive, because, as we have heard during this debate, things have not always been perfect. Does she hold the view that when Dr Singh comes to visit this country later this year, it is incumbent on our Government to raise some of the barriers to doing business, particularly relating to corruption and the other issues that have been raised here today?
Caroline Nokes
My hon. Friend makes an important point. We cannot focus just on the positives, although they are there and they are important. We must ensure that some of these issues are resolved, preferably before the Prime Minister’s visit in the summer.
I hope that the initiative that we have seen in the Solent region is not the first, and that it is something that can be spread across the whole of the UK. I know that UKTI has been very positive in supporting that view and is looking forward to welcoming the delegation from Pune when it comes to Southampton later this year. In short, I regard our relations as wholly positive. I have kept my comments deliberately brief so that other Members can contribute. I hope that the links that we have established in the Solent region will go from strength to strength.
Lorely Burt (Solihull) (LD)
My hon. Friend the Member for Cities of London and Westminster (Mark Field) should have no fear about the need to build a Boris island, because we are having our runway extended in Birmingham, in the west midlands, where a great number of members of the Indian subcontinent reside and we will be able to take another 18 million passengers.
The biggest employer in my constituency and a key player in the west midlands in terms of jobs and growth is Jaguar Land Rover. We have heard about corruption, but that company is exemplary. It is a far-sighted company that looks towards the medium and the long term and cares for its employees.
I want to speak briefly about the EU-India free trade agreement. We have already heard about the summit that is due to take place on 10 February. However, despite hopes that negotiations about the agreement will reach a conclusion, it has become clear that the best expected result is a limited agreement on trade in goods. Crucial negotiations on services, investment, public procurement and intellectual property rights will continue. The failure to reach agreement on those areas is a shame, because there are huge benefits for the EU generally in reaching agreement with India. India is a market of more than 1.2 billion people, with a burgeoning middle class and an economy that, according to some statistics, is now growing faster than that of China.
For the UK, trade with India is hugely important. In 2009, it was worth £11.2 billion. Moreover, the UK seems a natural partner for collaboration with India, particularly on education, which has already been mentioned, as well as on low-carbon and energy efficiency development, science and research, and advanced manufacturing, including in the aerospace and defence sectors.
Among the most serious obstacles in the negotiations about the EU-India free trade agreement are the unwillingness of India, first, to include the automotive sector in the agreement and, secondly, to reduce the tariff on car imports, which is currently 100%. India is also unwilling to include wines and spirits in the agreement. For example, our wonderful Scotch whisky receives a tariff of 150% in India. And another obstacle is the reluctance of India to include a sustainable development chapter in the agreement.
I am sorry to say that the EU is also putting in place obstacles to the agreement. They include an obstacle related to mode 4 services, which is a controversial “defensive” interest for the EU. “Mode 4 services” refers to where the EU negotiates the temporary transfer of personnel from a partner country to provide a service within a corporation for a limited period of time. The EU normally only negotiates trade commitments for professionals if they have at least a university degree-level of education. It is a great shame that we cannot allow other people to come into the EU for a limited period when they have skills to bring, including training skills, and when they have a contribution to make to the economy of the EU, including the British economy.
Keith Vaz
The hon. Lady makes a very powerful case for relations with India. I want to make one point. When our Prime Minister and our other leaders go to India for summits, far too often they take “the great and the good” with them. Is it not important that they should also try to take representatives of some smaller businesses, which are the driving force of growth in trade between our two countries? And those representatives of smaller businesses should of course come from Birmingham too.
Lorely Burt
The right hon. Gentleman makes an even more persuasive case by referring to Birmingham. He is absolutely right that small businesses are the generator that is dragging us out of this recession, and the ability of small businesses to access Indian markets is vital. He could not have made a more appropriate point.
Can the Minister say whether the Government will reconsider their position on mode 4 services and come back with an improved offer as a means of unlocking the EU-India free trade agreement, hopefully by the end of this year?
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Thank you very much, Mr Walker, for allowing me to catch your eye and speak in this debate. I will follow the lead of my hon. Friend the Member for Banbury (Tony Baldry) and make a few points briefly. I hope that someone else might be able to speak before the wind-ups begin.
The first thing to note is that I think that this is one of the first parliamentary debates that we have had on trade in the past five years, and the popularity of this debate shows the importance of trade. As Britain learned in the 17th and 18th centuries, trade is not a zero-sum game. The more that nations trade, the more that they create prosperity and jobs, so trade is hugely important.
The problem for us is that 65% of our trade is with countries in north America and Europe, but between now and 2020, the gross domestic product of those countries as a proportion of world GDP will decline by 40%. By contrast, between now and 2030, GDP in the BRIC countries—Brazil, Russia, India and China—as a proportion of world GDP will increase by 40%. Basically, we are not trading with the right people; we need to increase our trade with the BRIC countries, whose economies are growing.
I entirely agree with my hon. Friend the Member for Banbury that both UK Trade & Investment and the Department for Business, Innovation and Skills need to do a proper job of work to determine why the UK’s trade deficit with India has increased hugely during the past 10 years, as demonstrated by the statistics that the hon. Member for Brent North (Barry Gardiner) has just cited. UKTI needs to benchmark itself against rival successful operations around the world, such as the trade organisations in Germany and Hong Kong, to find out what it could do better to encourage more trade with India and other countries.
Trade is a two-way thing; it is not only about exporting but about foreign direct investment. One or two Members, including my hon. Friend the Member for Stafford (Jeremy Lefroy), have mentioned FDI already. FDI is incredibly important to this country. Why did Li Ka-shing, the Hong Kong property tycoon, invest in Felixstowe, our biggest port, and transform our port industry? Why did the Japanese invest in our car makers, effectively bailing them out, in the 1960s and 1970s? FDI—inward investment—is incredibly important for jobs. Not only do we need to encourage more FDI, but we need to encourage those foreign companies that have already invested here to invest more here than they have already.
I want to mention education. My right hon. Friend the Minister will be interested to know that 38,500 Indian students came here to study last year, but guess what the number was for China: 110,000. In India, 600 million people are under the age of 30—a demographic that will propel India into the world lead for centuries to come. Consequently, we should pay much more attention to educational links with India. I went to the university of Madras, which is one of the “Nehru five” universities. It is emerging on the world stage in terms of its research, including the number of patents that it files. Indian higher education is becoming a really important factor in the world.
I also want to pick up on the point made by my hon. Friend the Member for Cities of London and Westminster (Mark Field) that unless we maintain internationally competitive infrastructure, we will not remain internationally competitive in trade. I am afraid to say that the Government need to rethink High Speed 2. There is nothing wrong with HS2, but there is nothing right with it either. There are much better solutions to the transport problem. We need to think of a holistic approach, which incorporates connectivity right around the country and getting freight on to the railways, which in turn incorporates getting people out of their cars. Having internationally competitive infrastructure is really important.
We also need to think about trade barriers, both here and in India. When I was in India in 2008, there was no doubt that there were still considerable trade barriers in India for our legal services, accountancy services, insurance and banking. Everyone is quite right that, when Manmohan Singh comes to this country later this year, we need to erase those trade restrictions with his country.
Equally, we must retain our own trading competitiveness. There is no doubt that our immigration structures are problematic. I am not advocating to my right hon. Friend the Minister that we should join the Schengen agreement, but we must recognise it as a fact that is limiting our trade. Why did Huawei, which is now the second largest manufacturing company in the world, move its European headquarters from the UK to Dusseldorf? It was because of the Schengen arrangements. We must recognise the fact that we have a problem with our visa system.
Finally, I just want to say again that trade is vital to our country. If we are going to get out of the economic problems that we are in, we must reorient our trade with the rest of the world. Trade is good for our country, and for our companies as well. Between 1996 and 2004, companies that traded increased their productivity by 34% and the average figures for those companies that did not trade showed that their productivity decreased by 7%. There is an overwhelming and compelling case for trade. We need to have more of these debates, and this is an advanced bid for the Backbench Business Committee to consider having more debates on trade.
Mr Iain Wright (Hartlepool) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Walker, as I did in the Education Bill Committee. My mother sends her regards. [Interruption.] That was a private joke; hon. Members would need to have been in the Education Bill Committee to understand it.
I congratulate the hon. Member for Wimbledon (Stephen Hammond) on securing this debate, which has been excellent. The contributions to it from right hon. and hon. Members have shown how important the economic, social and cultural links between the UK and India are. At the heart of our countries’ relationship is our close historic links. However, we should not look at the relationship too sentimentally. Instead, as we have done in this debate, we should assess how increasing trade with India could significantly boost income and prosperity for both countries.
Right hon. and hon. Members have mentioned the links between India and their own constituencies. For example, the hon. Member for Solihull (Lorely Burt) mentioned Jaguar Land Rover, and I will be pleased to meet representatives from the company later today. The hon. Member for Romsey and Southampton North (Caroline Nokes) mentioned the Solent India Business Network. In my constituency, we have Tata Steel, and that combination of Indian investment and Hartlepool skills provides steel pipes that are exported all over the world, are laid across the globe’s oceans and provide prosperity. The North East of England Process Industry Cluster has very strong links with the Indian chemical sector, and delegations have visited the north-east and India in recent years. A focus of this debate has been India’s huge potential, and as the global economy moves eastward, the potential for closer trading links with India should not be underestimated or overlooked.
India has emerged very resiliently from the global recession, with economic growth averaging at about 7.2% for 2000 to 2008, slowing only marginally since the world financial crash, to about 6%. The medium and long-term forecast is 8% to 10% per annum. As a result of a growing middle class in emerging markets, it is estimated that international trade and investment will expand faster than general gross domestic product, and that is particularly true of India where robust domestic demand, a high savings rate and a young population all play into the forecast that expenditure will rise fourfold in the next 20 years. We need to be at the heart of that. My hon. Friend the Member for Brent North (Barry Gardiner) said that although trade with India has become relatively more important to us in the UK, it is becoming less important to India. That point needs to be addressed, and I hope that the Minister will give a response.
The fact that India is a parliamentary democracy, with a mature civil service and an independent judicial system, should serve to reassure investors and exporters. One theme of today’s debate has been concern about corruption in India, which will compromise potential business investment, and I want to mention last week’s ruling by the Indian Supreme Court that Vodafone does not have to pay the tax bill on its acquisition of Hutchison Essar in 2007. My sense is that that demonstrates that the judicial system is independent of the Government, and that should help to provide a huge boost to foreign investors in India. It would be useful to get the Minister’s opinion on that matter.
The hon. Member for Wimbledon was particularly strong in saying that we should work to our competitive advantage. We are very good at exporting to India the likes of business and financial services, but we need to do a lot more because we are underutilising our potential. He was right in saying that we are very behind the curve when it comes to things such as construction services and exploiting the huge investment in infrastructure, in the road and rail networks that India will be providing. We need to do a lot more, and I hope that in his winding-up speech the Minister will say how we will broaden the range of export activities that we can provide to India, not just business and financial services but in the fields of construction, chemicals, science and infrastructure.
Mark Field
Another very important area, particularly given the common language—the official language in India is English—is intellectual property. Given the passion for sport, there is an opportunity to export premier league rights and other things. We are increasingly able to export a huge amount of animation and other UK products, not just to India, but to other parts of Asia.
Mr Wright
The hon. Gentleman is absolutely right about intellectual property, and I hope to come in a moment to the matter of legal services.
It has been almost a year since the Government’s trade White Paper was published, and the Opposition agree with its broad direction and rhetoric, particularly its focus on emerging markets. I suggest that that journey started under the previous Government and that the present Government are continuing it. In the White Paper, the Government stated that the conclusion of an EU-India free trade agreement was a top priority—a focus of today’s debate—and it was estimated that it would produce an additional €4 billion in trade by 2020. We agree that the successful negotiation of a trade agreement is important, but that negotiation has stalled. The White Paper stated that a conclusion was expected by the end of 2011, and I recall that when the Secretary of State for Business, Innovation and Skills made a statement to the House on the White Paper, he specifically mentioned the agreement and said that progress was being made—a fact mentioned by my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Brent North. Will the Minister update the House on when the free trade agreement negotiations will be concluded? Will they be concluded by 8 or 10 February? What will we see in the agreement? Will it be watered down to the point at which it is meaningless?
The White Paper also states that the Government will work towards a doubling of trade with India by 2015. This is a fairly dramatic objective, although laudable in its ambition, and I wonder precisely how the Government will help businesses to achieve it. That will be difficult, given that the most recent trade figures show a growing decline in exports to non-EU countries, including India. Moreover, the CBI monthly trends survey for December reports that export order positions remain well below long-run averages for the second month running. Companies are stating that present export orders above normal are plus 12, but those reporting below normal are minus 44. Given those concerning figures, will the Minister outline how the doubling of trade, which, as I said, is laudable, will be achieved?
Part of the solution is to encourage and incentivise as many British firms as possible to consider exporting their goods and services to India, but in doing that businesses face several problems, which have been highlighted today. The British Chambers of Commerce’s international trade survey found recently that 70% of small and medium-sized enterprises are not current exporters and are not likely to be in the next few years. I agree with the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) that we need to encourage and incentivise trade outside the EU to boost prosperity in our country. What will the Government do to help achieve that? What will the Minister do to address that issue, specifically with regard to India?
A potential barrier is the lack of appropriate finance for exports. The export enterprise finance guarantee scheme has been up and running for about a year now, so will the Minister update the House on how many businesses it has helped, and in particular how many businesses have benefited from the scheme in exporting to India, and the value of the goods in respect of our economy?
I want to talk about regulatory barriers to trade between us and India, particularly in relation to high-value professional services, such as banking, legal services and accountancy. As has been mentioned, we still await the liberalisation for foreign banks and the opening up of competition to foreign players. That could significantly increase British exports in this field, particularly in parts of India with no banking provision. What work are the Government doing, alongside the World Trade Organisation, to ensure that India’s banking system is opened up to competition? There is a similar position regarding legal services. It remains illegal for foreign lawyers to practice law in India, and it is proposed to address that issue in the EU-India free trade agreement, but will the Minister say something about the work being done to come to some agreement on the provision of legal services?
In my profession of accountancy and auditing, there remains a restriction on the ability of global accountancy and consultancy firms, many of which are based in Britain, to use their brand names for auditing and accountancy purposes. The Institute of Chartered Accountants of India has negotiated a memorandum of understanding with the Institute of Chartered Accountants in England and Wales, of which I am a member, which allows members of one body to join the other in certain circumstances. That should boost trade between the two countries. It should provide regulatory and auditing rigour, which should improve corporate governance and reporting, and therefore reassure investors, which in turn would help the Indian market to grow. Given our expertise in knowledge-intensive industries, we have huge potential here, but it would be useful to hear more from the Minister about how he intends to facilitate such growth.
The hon. Member for Cities of London and Westminster (Mark Field) said that we should be a beacon for the brightest and the best, and that brings me on to student visas. I am very pleased that my right hon. Friend the Member for Leicester East (Keith Vaz), the Chairman of the Home Affairs Committee, is here. We have a huge reputation in higher education, but there is a perception that student visas are somehow a barrier and that we are somehow closed for business. Will the Minister outline the discussions that he has had with his counterparts in the Home Office about how that will be addressed?
Close historic and social links have the potential to grow into equally close and mutually beneficial investment, commercial and trading opportunities. We welcome the scope for more Indian direct investment into the UK, while wishing to see our exports grow to ensure that India becomes a more significant partner. Given the strength of feeling and the backing of Members in this debate, I hope that the Minister will be able to outline how UK-India trade will grow still further.
The Minister for Universities and Science (Mr David Willetts)
This has been an excellent debate. I congratulate my hon. Friend the Member for Wimbledon (Stephen Hammond) on calling for it and on opening it so effectively.
The Government absolutely recognise that trade between Britain and India is vital as we seek to rebuild and rebalance our economy at home. We are committed to ensuring both that the UK remains a top destination for foreign direct investment and that our businesses engage properly with high-growth emerging markets. As several hon. Members have said, there can be no better example of a high-growth emerging market than India. My hon. Friend put it particularly well when he said that we should not be complacent, because contracts are not won but worked for. We should all remember that motto.
The British Government are therefore committed to making our relationship with India broader and deeper, and that certainly includes the trade area. That commitment was clear in the Prime Minister’s decision that his first major overseas visit should be to India, with a delegation of Ministers, including me, and senior business figures. The Prime Minister has made it clear to us that that was not a one-off but part of a process of continuing engagement with India. Indeed, I have been back on two further missions since then involving trade, universities and research.
I welcome the intervention by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes). She mentioned the Solent India Business Network and the university of Southampton. I can report to the House that I took with me a gift for my Indian opposite number. I remembered that the university of Southampton, as my hon. Friend knows, holds the archive of the Mountbatten papers, including the papers from the negotiations with Gandhi on Indian independence. We politicians are sometimes accused of writing our ideas on the backs of envelopes. The archive includes documents from the period when Gandhi was negotiating with Mountbatten. He had made a vow of silence, so he was not speaking directly to Mountbatten, and I can report that he did indeed write his proposal for the future of India on the back of used envelopes. I took copies to give to my Indian opposite number.
We have historic ties, but this debate has rightly focused on our trade relationship. The British Government are clear that we aim to double trade with India by 2015. That is our objective. To achieve it, we must offer more help to small and medium-sized enterprises to export. We still have an insufficient number of SMEs in the export business. We must help our companies win major, high-value contracts. We need to attract much-needed inward investment, which builds trade links, and to build strategic relationships with key companies. The hon. Member for Solihull (Lorely Burt) made an effective case. We recognise fully that Jaguar Land Rover is a classic example of a key company.
We focus on India not just because we understand its high growth prospects in the abstract but because we have analysed particular sectors where we can see that growth happening. India plans to spend $1 trillion over the next five years on improving its infrastructure. That is a market. It is expected to be the world’s third largest car market by 2020; that is another crucial opportunity. Its health care market is expected to triple to $150 billion by 2017.
Several hon. Members have mentioned my particular responsibilities. The Indian Government have plans for 40 million extra university places and for 500 million more people to receive vocational training over the next 12 years. When I have had discussions with Kapil Sibal and other Indian Ministers, they have recognised fully that to achieve those extraordinary ambitions, they must work with others. Who better to help them than Britain, given our strengths in education and vocational training?
Mr Willetts
The British Government have a shared view, to which, of course, all Departments subscribe. Included in that, as I said, is the fact that there is no limit on the number of suitably qualified foreign students who can come to legitimate universities. However, I fully accept the challenge of communicating that effectively, given how the policy has sometimes been reported, not least in the Indian media. One reason why I have paid visits to India is to communicate as clearly as I can that there is no numerical limit on legitimate students coming to legitimate higher education institutions.
Mr Willetts
I am terribly sorry, but I have only five minutes left, and I have several other issues to touch on.
One issue raised by several Members involves the problems that a number of UK companies have experienced obtaining payment for goods and services provided during the Commonwealth games. Some UK companies, most notably SIS LIVE, are alleged to have been involved in instances of bribery, which they have strenuously denied. Several hon. Members have vouched for those companies in this debate. All those cases are being examined by the Indian Central Bureau of Investigation. Until that work is complete, we doubt that any resolution of the matter is possible. All the Commonwealth games cases have been handed over to a group of Indian Ministers, who will decide what needs to be done.
I assure hon. Members who have raised the matter that the British Government are energetically pursuing the concerns of British companies with the Indian Government. The high commissioner met the Indian Secretary for Home Affairs and followed up with a letter. Our Prime Minister has written to Prime Minister Singh about the outstanding payments, and Ministers and officials are working to resolve the outstanding issues. My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport has written to his Indian counterpart, the Minister for Sport, requesting that the investigation be expedited as quickly as possible. We remain very much engaged with the issue.
Mr Willetts
I apologise, but it has been a crowded debate. We understand the arguments made by my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) for more debates on these issues.
I was asked about the EU-India free trade agreement, including by the hon. Member for Hartlepool (Mr Wright). The UK has been one of the strongest supporters of the FTA since negotiations started. We believe that there is now a genuine prospect of concluding an ambitious agreement this year that will deliver significant benefits to UK business, with a potential value of £2 billion over 10 years. We now look forward to the EU-India summit in February, to which several Members have referred, and hope that progress will be made there.
We have made it clear throughout the negotiations that in order to conclude an agreement, it is essential for India to open up markets in key areas such as services, wines and spirits and the automotive sector, which the hon. Member for Solihull mentioned. India’s implementation of reform in single-brand retail is a positive sign, but we need more progress on services including multi-brand retail, banking and insurance.
Some Members asked what that will mean for migration. We expect the chapter on international trading services in the FTA to include provisions on the temporary movement of highly skilled professionals from India to the UK and from the UK to India. We recognise that a key element of the UK’s offer in trade negotiations is its willingness to admit temporarily to the EU highly skilled professionals under mode 4. However, any such measure must be consistent with our commitment to limit levels of economic migration to the UK. We expect the outcome of the negotiation with India to allow for the operation of minimum salary thresholds and wage parity testing. The Government are strongly committed to policy in that area.
In conclusion, the British Government absolutely agree with hon. Members from all parties about the importance of our relationship with India. That is why the Foreign Secretary has announced the expansion of our network across India, creating 30 new positions. It is a truly cross-Government effort. Our relationship is much wider than trade and investment; we co-operate closely with India on education, science and research. The UK India Education and Research Initiative has now reached a scale of £90 million, and I have launched improved research collaboration with India. We are also researching and working together on climate change and development. We have an increasing defence and security relationship, and we are working with India on international issues.
Despite the global downturn, India continues to enjoy rates of growth that are the envy of Europe and the US, with the north Atlantic problem to which an hon. Member referred. We will continue to work across Government and with the private sector, universities and our Indian friends. We want more UK companies to do business in India, and we welcome those opportunities.
Postgraduate Education
(12 years, 3 months ago)
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Mr Philip Hollobone (in the Chair)
I welcome hon. Members and warn them that we may be interrupted by Divisions in the House. If that happens there will be a 15-minute interruption to proceedings. Let us hope that that does not happen.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
It is a pleasure to speak in Westminster Hall again, Mr Hollobone, but under your chairmanship for the first time. I hope that I will not need much calling to order during my remarks.
The Minister knows about my long-term interest in higher education and so do my colleagues. I thank my hon. Friend the Member for City of Durham (Roberta Blackman-Woods), truly a good friend and not just formally so, who had the original idea when she asked, “Isn’t it time that we talked about postgraduate education?” thereby inspiring me to request this debate, which I am delighted about and lucky enough to introduce.
I introduce this debate with a fair-minded point of view. Many hon. Members know that I have a long-term interest in education. I chaired the Education Committee under its different names for 10 years and particularly enjoyed my time as the Chair of the Education and Skills Committee, when I had a brief covering higher education, stolen away as it was when I became the Chair of the Children, Schools and Families Committee, which did not have the higher education remit. I have missed it.
Many years ago, I started the all-party parliamentary university group, on which my hon. Friend the Member for City of Durham now has a senior position, because it was important that this vital sector in our economy had a good relationship, good conversation and good communication with Members of both Houses of Parliament.
I have a long-term interest. I am now involved in the newly formed Higher Education Commission, chaired by Lord Broers, the first inquiry of which will look at postgraduate education. It is important to discuss that part of higher education because it is a bit isolated—on its own—and we have had a pretty eventful period for undergraduate education over the past months and years. Everyone has been busy looking at student finance for undergraduates, which has led, unfortunately, to our taking our eye off the postgraduate world.
I read somewhere recently that the Minister said—I believe him—that the noble Lord Mandelson could not be persuaded to include the postgraduate sector in the Browne review of higher education. I shall give way to the Minister if he wants to correct me.
The Minister for Universities and Science (Mr David Willetts)
In the negotiations that happened under the previous Labour Government, when Lord Mandelson was Secretary of State and I was shadow Secretary of State, I specifically urged that the terms of reference should make it clear that postgraduates, not just undergraduates, were included. The terms of reference included postgraduates, but Lord Browne did not advance any specific proposals. Postgraduates were included in the terms of reference partly at the request of the official Opposition.
Mr Sheerman
It is good to get that on the record. Of course, there is barely a page in the Browne report about the postgraduate world.
We desperately need to consider postgraduate education, because higher education can only be considered holistically. Where do we get our students from? What are the qualifications for getting into university? Who is pitching up to be taught as undergraduates in universities? How difficult is it for children of all the talents to get into university and higher education, even into elite research institutions? We have concerned ourselves with many things to do with universities and will continue to do so.
In respect of the changes under the Browne recommendations and the coalition Government’s implementation, there has been a fundamental shift and change in the situation for undergraduates. I will make my remarks today pretty much on an all-party basis, so there will be no hauling over the rights and wrongs of that. We are where we are, but to deny that the new situation for undergraduates does not have real implications for the postgraduate world would be foolish.
In a sense, we are in a bit of a policy vacuum in respect of postgraduate education. I urge the Minister and the Government to set themselves the task of filling that vacuum with something that is innovative, informative and positive. The fact is that, taking the dismal view of the situation at the moment, it might be said—in terms of economics being a dismal science—that the health of our research base could be threatened. The universities are some of this country’s greatest assets. Indeed, if universities were taken out of many of our towns and cities, they would be in a parlous state.
Any hon. Member who saw this week’s review of the health of cities will know that, although there is not entirely a correlation, a city without a university is likely to be in the lower percentile of success as a city. I am greatly concerned about our universities being threatened in any way. My wonderful university of Huddersfield is the largest employer in the town. It is a vast, expanding and developing university in the top 10 for employability and for widening participation. It is debt-free, successful and is developing and expanding, with strengths right across the arts, the sciences and design—in almost every subject that can be thought of—but with a practical bent in most departments.
Looking across the university estate, the problems faced by postgraduate education are different depending on where it sits. Universities are at the heart of our national wealth and well-being and are absolutely at the heart of the likelihood of our economy remaining diverse and successful. I shall speak about the threat to our research base, particularly in respect of the science, technology, engineering and mathematics subjects—big science—and will come to that in a moment.
Higher education is going through a period of uncertainty and change, with the new funding arrangements coming from the Browne report and the reduction in funding for teaching—the £9,000 cap. That is the situation that we are in.
I would be happy if the Minister mentioned something that we all discussed at some length when the Government produced the White Paper, “Higher Education: Students at the Heart of the System”. I told the Minister that I was a bit worried about that, because he kept saying that students had to be in the driving seat. When I worked for a living—[Interruption.] That is supposed to be an amusing aside. When I worked for a living I used to be a university teacher and I have reflected on the fact that, when students pitched up to be taught by me, I expected and thought that teaching staff were in the driving seat. Sometimes our job was to be quite nasty to undergraduates if they did not work hard enough or did not take their courses seriously enough. Part of the university experience is to get some pretty good, firm advice. I was worried that, with the White Paper, we seemed to be moving into a rather soft world, where we treated students as the consumer and the consumer could do no wrong, and we would have to dance around and provide nice soft courses and a lovely three years before students were ushered out into the wide world.
A lot about the students quite worried me, but I was waiting with anticipation for an education Bill. Suddenly, to my great surprise, shock, horror, I had to reach for my iPad and tweet. That is how serious it was. An early tweet—that method of communication provides early news—informed me that there would not be an education Bill any time soon. Today is a splendid opportunity for the Minister for Universities and Science to put us right. There have been rumours that a Bill will not be presented for two or three weeks, two or three years, or until 2013-14. There are also rumours that the Liberal Democrat part of the coalition has said, “No, no, no”, and that it will not be this side of an election. If the Minister wants to enlighten us, I will happily give way.
Mr Willetts
The Government will set out authoritatively our position on how we will implement our reforms in the White Paper very soon, but not in response to the bait being offered by the hon. Gentleman at this very moment.
Mr Sheerman
I think the Minister has gone as far as we can persuade him to go. Perhaps there is time for reflection, because there was almost nothing about postgraduate research in the White Paper, and perhaps this is an opportunity to cover that. If the higher education sector is not considered holistically, something is very wrong indeed. It should be considered from when students are recruited right through to PhD, doctorate and post-doctorate level.
I am sure, Mr Hollobone, that you took part in the Royal Society’s twinning scheme between research scientists and Members of Parliament. It was one of my most enlightening activities as a Member. One realises what a precious resource it is when young people have come through university, obtained a brilliant first degree, are encouraged to go on to a master’s degree, followed by a full research doctorate, and then post-doctoral work. In my placements when I have been part of the scheme under the last Government and now, it is a worry that if there is no continuous educational progression, the research stream starts to dry up. Post-docs get to a stage when they are getting on bit, they are married, they have a couple of kids and they are finding it hard to maintain a decent standard of living, and if there are no full-time scientific research positions or academic posts that are well paid, or relatively well paid—we are not talking bankers here—the whole system starts to look very thin indeed.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate the hon. Gentleman on securing this important debate, and on his excellent work on the matter over many years. On research, does he agree that we must pay tribute to the excellent work of the seven UK research councils which, with the research charities, do a fantastic job in providing support and funding for postgraduate research in innovative areas?
Mr Sheerman
I am happy to do that. The research councils are a brave body of men and women, and they are going through tough times, because they are eking out research grants to many people who need and deserve them. It is a tough time to be entering the postgraduate world. They are in the firing line for saying yes or no, and too often it is no.
Paul Blomfield (Sheffield Central) (Lab)
I thank my hon. Friend for giving way on the specific point of the research councils. Will he note the comments by Research Councils UK in 2007—the Minister laughs, but I do not think it would change its view now—when it argued:
“There is a critical need to grow postgraduate research…in the UK in order to counter the demographic ‘time bomb’ of an ageing population of academics in some disciplines”
and that without
“a strategy to address this, there will be serious implications for future retirement and replacement needs”?
There remains a concern that there is no strategy.
Mr Sheerman
My hon. Friend is absolutely right, and that is why I keep pleading for higher education to be considered holistically through the career path of senior researchers and academics to retirement, and to consider the demographics of that. My hon. Friend makes the strong point that we must keep refreshing and replenishing that stock all the time. Many of our senior academics are approaching retirement age in a bunch as the demographics work.
When it is announced that one has a debate such as this, information pours in from all over the place. I pay tribute to Universities UK, the Russell group, the ’92 group and others who have furnished me with excellent background material. I was reading about some of the important things that we do in the research community: employer engagement, research, executive education, knowledge transfer, regional partnership building, and so on. But I return to teasing the Minister about the policy vacuum.
Let us look at the history. In March 2010, the Adrian Smith review, “One Step Beyond: Making the most of postgraduate education”, was published. What has happened to it? Sir Adrian has been pulled in—I am sure he did not have be pulled in, but was delighted—to talk to the Minister, who has got his team together again for at least one meeting. Will he enlighten us on whether that review is going anywhere in influencing Government policy? That would be useful.
I want to dwell on the rather dark side of the argument. Higher education and the postgraduate world are heavily dependent on a particular market, and when I was Chair of the Education Committee, I looked at the international market in higher education. The Committee learned that it is intensely competitive. Universities all over the world compete, and five years ago the main competitors were the United States, Australia and emerging countries such as India and China, sometimes in partnership with UK and US universities. It is a very competitive world, and includes Saudi Arabia, India and Germany. The Germans and the Dutch are now teaching postgraduate and undergraduate courses in English to attract a broader audience. If the income from international students were taken out of higher education, we would be in a sad state indeed.
That market is heavily dependent on taught postgraduate work—the one-year or two-year master’s degree. It is highly competitive. As a member of the court of governors of the London School of Economics, I know it very well. It is highly competitive, and there is no cap on fees, which are very competitive. At the lower end, there are some good cheap bargains in higher education in the UK. At the higher end, a business master’s degree in some of our better-known departments of management will cost a lot of money.
Growth in the number of international students, great threat from competition, and—I do not want to be partisan—a slightly clumsily organised change in the visa arrangements have had an impact on some good institutions. I am the first to say that there were some dodgy players pretending to be respectable colleges, and we could have used a little more finesse in weeding out the obvious cowboy operators without impacting on the serious players in higher education, but there is no doubt that visas have been a difficulty, as have the cuts in teaching grants. We have no tuition fee loans for postgraduates, and the research councils cannot help with that.
Rehman Chishti
Does the hon. Gentleman agree that the Government made it clear that they are committed to supporting funding? They said that they are
“maintaining the annual £4.6 billion budget for science and research programmes with £150 million each year supporting university-business interaction.”—[Official Report, 8 December 2011; Vol. 537, c. 35WS.]
In these difficult economic times, the Government have made it clear that they are committed to supporting that funding.
Mr Sheerman
I do not want to be very party political today, but I will be party political in the sense that I still do not think that that is good enough. There is a problem with overall cuts in funding. The view that we are all in it together and so everyone has to stay at the same point is one with which I have never agreed. Why do we have to kill the goose that lays the golden eggs? We need only look at the international competition and how much money is being put into research and development, higher education and postgraduate education worldwide. This is a time when we should be being as ambitious as anything because the payoff, the return to the community, in relatively fast terms is very large. There is a great bonus to be had from moving in that direction. I understand what the hon. Gentleman says, but I think that for higher education, every bit of investment is very worth while.
I do not know the hon. Gentleman’s constituency and community, but in mine, investment in the university is the one way in which we will get regeneration. I cannot remember his constituency, but I have been telling the Government for a long time, because people ask, “Are we in recession or aren’t we?”, that outside London and the south-east, we have been in recession for a long time, and if it was not for the universities, heaven knows where we would be, so any bit of investment in research in universities and any bit of investment that encourages participatory working with small and medium-sized enterprises in our regions is worth while. I would have thought that any Government in their right mind would be pouring money into that.
Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is making an excellent speech. On regeneration, is it not the case that we will not be able to grow our economy unless we invest in higher-level skills, and that is what postgraduate education is all about?
Mr Sheerman
As ever, my hon. Friend is absolutely right about that. I want to gallop through the last part of my speech.
Rehman Chishti
I am most grateful to the hon. Gentleman for giving way again; he is very generous and always has been. He raises the issue of universities in different parts of the country. There are four universities in Medway, with 10,000 students, and they do a fantastic job. The point that I want to make to the hon. Gentleman was made to me by Professor John Williams from the university of Wales at Aberystwyth. He said that much of postgraduate funding comes from outside the block grant, and to increase funding, people have to go out there and get more funding from industry and benefactors coming into postgraduate education. What more does the hon. Gentleman think needs to be done to get that funding?
Mr Sheerman
I will not be tempted by that question because I intend to talk about that issue at the end of my speech and I would ruin it if I did so now. It might surprise people in Westminster Hall this afternoon, but there is some shape to my speech—a little. Let me gallop through the rest of it. I will come to the hon. Gentleman’s point, I promise.
At present, there is one great danger—well, there is more than one, but let us start with this one that I have picked up over the years. I want as many UK-based students as possible to come through as postgraduates, as the researchers of the future, but too often, I am looking at departments—even the big science departments of the big science universities—that rely too much on overseas students. In science and engineering, students come particularly from China and India. In other subjects, the students are very often from the United States. People can see the statistics on that. UK students are increasingly coming through with high levels of debt—EU students are also pretty stretched in the present economic climate—and I worry that those high levels of debt may be putting them off further study. There is the belief that debt levels will be much higher in the future. Whether they are right or wrong, they are thinking, “Can I afford to go on into postgraduate education and then the commitment of a doctorate and all the rest?”
I become very worried when I look at the statistics and I hope that the Minister will come back to us on the matter. Is he content with the number of UK-based students, particularly in the challenging subjects to which I am referring? We have to have a high density of scientists and clusters of scientists in our country. In particular, is he confident that we will be breeding the postgraduates that we need—tomorrow’s researchers?
We want to keep up the research dynamic in our country. We want to keep up its international excellence. We still have it. We find it very easy to do ourselves down in this country. We say, “Oh, it’s all terrible.” It is not all terrible. We still have fantastic universities that have the top ratings in the world. However, it is possible to become a little complacent and then suddenly our institutions become less attractive, not just to overseas students but to the high-level, high-calibre scientists who we want to come and work in them as part of the teams there. We must keep up the research dynamic if we are to have international excellence.
I am also worried about access to postgraduate education. As Alan Milburn said in his report on social mobility, are we getting into a situation in which only kids from very wealthy backgrounds can contemplate staying on in education long enough to push their talent to its furthest potential? That really worries me. Will we be in a situation in which many bright young people from less well-off backgrounds are put off staying with a science or a social science? Will they be put off staying in education long enough to be part of a successful research future?
Let me return to the point made by the hon. Member for Gillingham and Rainham (Rehman Chishti). I am totally in favour of partnership between researchers and industry. I think that it is fantastic. People can see that I am in my best suit today. This is real Huddersfield cloth. Not many people could afford it, but I am the Member for Huddersfield and am in a privileged position. I should not drop names, but the reason why I am wearing it is not that I am in your company, Mr Hollobone, but that I am having dinner this evening with Lord Bhattacharyya. He is one of the great exponents of partnership across universities. He built Warwick as a partnership university and has had great success.
I believe in partnership, but I also believe in free science. I believe in academics having the freedom to conduct science that has nothing to do with likely commercialisation. That is what I call free science—science for its own sake, or the subject for its own sake. It could be social science; I am a social scientist by training. It should be able to go somewhere where it does not have to be sponsored and does not have to have a tag saying that it might be useful to some institution, lobby group or whatever. The fact is that we will be a poorer nation and will cease to be a high-science nation if we do not have what I call free science. Free science research must be at the heart of what we do. That is not to gainsay at all the wonderful relationships that do other kinds of more applied science.
This is an important debate. I am sure that the other hon. Members present will say much more profound things than I have said, but there is a policy vacuum that needs to be filled. We need a sense of direction for the future of postgraduate education and research in this country. We also need to know that our research universities have a healthy future and that anyone in our country who has talent and the potential to contribute to that will be able to do so.
Mr Philip Hollobone (in the Chair)
The hon. Gentleman may be wearing a suit made of cloth from his constituency. I am wearing shoes made by Cheaney’s in Desborough in my constituency. I am sure that we both appreciate each other’s attire.
Mr Speaker has received a very nice handwritten note from Paul Blomfield, so I call him to speak next.
Paul Blomfield (Sheffield Central) (Lab)
Thank you, Mr Hollobone. I appreciate Mr Speaker’s recognition of my efforts to be called today. It is a delight to contribute to the debate under your chairmanship.
I congratulate my hon. Friend the Member for Huddersfield (Mr Sheerman) on securing this debate. There is concern across the sector, which, I think, has been shared by the Minister, over the lack of attention that has been given to postgraduate education in the whole debate about the future of our universities and our higher education system and in the higher education reforms. I am not sure where those reforms stand now in the light of the announcement in The Daily Telegraph yesterday of the Government’s new position, to which the Minister has not added much clarity, but I am sure that he will come back to it later in the debate.
Postgraduate education issues and the failure of the Browne review to look at them were matters that I raised with Lord Browne when he appeared before the Business, Innovations and Skills Committee. It was clear that he did not have the inclination to examine postgraduate study, despite recognising in his earlier evidence that what happened in one area of the sector was important to the other areas. In one of those bizarre moments in our fairly long discussion with Lord Browne, he said that we had to understand the interdependence in the sector. What we do in one part of the sector has an impact on another part, he said. He told the Select Committee that he did not look at postgraduate education in anything other than in the most cursory way. Instead, he pointed to the postgraduate review chaired by Sir Adrian Smith and said that it would tackle the issues, and indeed it did in many ways.
When the Smith panel published its report in March 2010, it identified four significant challenges: promoting the value of postgraduate study to both potential students and employers; ensuring that sufficient emphasis is placed on skills, development and employability; crucially, considering barriers to the access and availability of financial support; and, finally, providing key information better to inform student choice, which has been at the heart of the Government’s narrative.
Not unreasonably, there was an expectation that those issues would be addressed in the White Paper on higher education. Surprisingly, though, they were not addressed, and the White Paper declares an intention to revisit postgraduate funding as the new system of undergraduate funding beds in. Universities UK said that that approach
“does not address some of the challenges the sector faces in maintaining postgraduate provision in the meantime, not least because of the withdrawal of elements of HEFCE teaching funding from as early as 2012/13.”
My hon. Friend has convincingly made the case for postgraduate education. It is an important part of the higher education sector. We have some of the top universities in the world, and our postgraduate education has an international reputation. It makes a vital contribution to the economy and is a major foreign export earner.
Over the past decade, the number of taught postgraduate students has grown significantly—around 40% since 1999. Taught postgraduate students now make up around 20% of the total student population, rising from 17% a decade ago. Much of that growth is attributable to international student recruitment—it certainly was before the visa changes—and to a growing number of young, under 25-year-old, UK students. There was nearly a 16% increase in the number of under-25-year-olds going on to postgraduate taught study between 2008-09 and 2009-10. One of the key reasons for that, which was confirmed by the postgraduate taught experience survey in 2010, was that they wanted to distinguish themselves in an increasingly competitive employment market and to improve their employment prospects.
In advance of today’s debate, I talked to academic and student leaders at the two fine universities in my constituency—the university of Sheffield and Sheffield Hallam university. I spoke to the vice-chancellor of Sheffield, Professor Keith Burnett, who the Minister knows and, like me, respects as one of our outstanding academic leaders. I asked him, “What would be the key points that you would want us to focus on in our discussions this afternoon?” He said that his concerns were twofold, and that they were both about access. First, professions that require postgraduate work, such as law and architecture, will have an increasingly more biased social mix, as the effect of undergraduate loans bears down on applicants from a widening participation background. Secondly, many areas in arts and humanities rely on self-funded students for department income and for training future university teachers. He said that that will lead to universities being staffed by those from more privileged backgrounds.
Professor Keith Burnett’s concerns were echoed by Thom Arnold, student president at Sheffield university. He said that his main concern relating to postgraduate education
“is funding and widening participation, in particular related to the impact of rising prices for postgraduate courses without a funding system in place”—
I hope the Minister will talk about that issue—
“and what impact this will have, particularly on people from lower socio-economic backgrounds. We are concerned that people will be priced out of postgraduate study, and as a result will also be unable to access professions where a masters is a prerequisite. We see a clear need for a review of funding and support arrangements for postgraduates with a view that this review will lead to the development of income contingent loans for postgraduates.”
Reflecting on a point in the Smith review, which I hope the Minister will also address, he said:
“Another area is access to information and guidance. The White Paper aims to put students at the heart of the system by providing more information to undergraduates with the key information sets. However, potential postgraduate students still remain largely in the dark when applying. Despite the limitations of key information sets, an attempt to roll out a KIS style for postgraduate taught students would be positive.”
Jake Kitchener is student president at Sheffield Hallam university and represents students drawn from a different demographic. He had the same concerns but raised an additional point. He said:
“We think it’s disgraceful that there is still no financial provision for those wishing to take up postgraduate study. I have spoken with students who have saved in excess of £10,000 just so that they can afford to go to university. The alternative is a graduate development loan, but it isn’t available to prospective students with a low credit rating, and when the student finishes it is a huge burden.”
Importantly, he said that mature students, who are a significant component of Hallam’s demographic mix, are not taken into account. He said:
“Those returning to study may have families, mortgages to pay and a reduction in income as they dedicate time to their studies. However, currently there are no systems in place to aid postgraduate study. Returning to education is a positive, but currently there is no student funding support to anyone that wants it. It’s a regressive system and our postgraduate students feel disregarded and hard done by.”
Those views are confirmed by a survey undertaken by the National Union of Students, which said that 60% of those whom it surveyed—a large sample—claimed that accessibility of finance or funding was a major factor on deciding whether to undertake postgraduate study. Some 67% of those whom it spoke to were entirely self-funded through a combination of savings, earnings, family loans and, in 15% of cases, overdrafts or credit cards. It also found out that self-funded students, who had often made the greatest effort to undertake that programme, were more likely than funded students to consider leaving or suspending their studies because of the financial pressures.
There is a crisis in postgraduate education funding. If it is not effectively addressed, we can expect to see mounting costs leading to decreased demand, closure of courses and increased reliance on international postgraduate income, which, however welcome in itself, should not be a substitute for the opportunities for UK students. Crucially, the UK population’s skill levels could decline, when we need higher-level skills to support growth and the knowledge economy, as the Minister will agree.
As my hon. Friend the Member for Huddersfield said, the crisis that we face in postgraduate education funding is due to two key factors: the impact of undergraduate higher education funding reforms, with which the Minister will not necessarily agree, but on which I would welcome his comments; and the impact of international student visa changes, with which I guess that he would agree, although he probably will not admit it. It is certainly true, as my hon. Friend said, that those changes were pushed through clumsily, and they could have been finessed better. We should have sought to deal with the issue not on the demand side, by discouraging applications, but on the supply side, by cracking down on the bogus colleges that have been mentioned.
The debate is not, however, just about postgraduate taught-course funding. Postgraduate taught courses, in particular, are a critical route to undertaking research programmes. As the million+ group of modern universities points out, students undertaking postgraduate qualifications not only provide future staff potential, but add significant value to our universities and the academic communities of which they are a part. As I said in an intervention, we need to recognise the concern that Research Councils UK has expressed about the demographic time bomb in our ageing academic population. If our universities are to play the role that my hon. Friend rightly talked about, that issue must be addressed.
Like my hon. Friend, I feel passionately about the role our universities can play in our economic future. Sheffield is a city with a fine industrial and manufacturing history, but it is seeking to identify a new way forward in a changing economy. The critical way that it can do that is by combining the innovation and research expertise of our universities with the traditional manufacturing skills in our city. As the Minister will agree, there is no finer example of that than the Advanced Manufacturing Research Centre at Waverley. That initiative was the work of the university of Sheffield and its key partners, Boeing and Rolls-Royce, and it has led to extraordinary innovation in manufacturing, but it came about only because of the sort of research capacity that we need to cherish.
In conclusion, I hope the Minister will spell out how the Government plan to address the four issues identified by the Smith review: promoting the value of postgraduate study; emphasising skills development and employability; critically, overcoming the barriers to financial support; and providing key information to enable student choice.
Mr Philip Hollobone (in the Chair)
I understand that Roberta Blackman-Woods has a postgraduate degree, represents a university town and is married to a professor. Even though she is dangerously overqualified, I am going to call her next.
Roberta Blackman-Woods (City of Durham) (Lab)
Thank you, Mr Hollobone. It was very kind of you to make those comments. May I say what a pleasure it is to serve under your chairmanship?
I congratulate my hon. Friend the Member for Huddersfield (Mr Sheerman) on securing this timely debate and on his excellent speech. I also congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield), who gave such an excellent speech that I am going to repeat some of it.
Postgraduate education is important in a number of different ways. It is important for the individuals who undertake study, because they can improve their employment opportunities, become the innovators of tomorrow and contribute to business development and to solving some of the economic and social challenges facing our country and others.
Postgraduate education is therefore important for individuals, but it is also important for universities, as my hon. Friend the Member for Huddersfield mentioned. Universities obviously benefit from the strengthening of the academic community that results from having postgraduate students. Indeed, I regularly see postgraduate students at Durham university bringing forward ideas, linking them into the work of academic programmes and teams and really taking those ideas in a new direction. That is very exciting for universities.
Increasingly, however, postgraduate education is also a marker of Britain’s academic standing in the world. I see a lot of postgraduate students in Durham from overseas, and they contribute to not only its international community, but its international research teams. Increasingly, that is how research develops in this country, although we mostly see it in science and engineering subjects. Those students are critical to not only securing economic growth, but helping to deal with some of our challenges.
The UK is second only to the United States in attracting international students, so it is important that we ask the Minister some serious questions about whether we will be able to maintain that international standing and whether new procedures or policies will need to be put in place to keep our standing as high as it is. Concern has been expressed in the academic community about whether we will be able to do that.
I thank the Minister again for attending the recent meeting of the all-party university group, when we looked at the White Paper. We really appreciated the time he spent talking to us about it. I hope that the session was not a complete and utter waste of time and that something from the White Paper will emerge in a Bill at some stage for us to consider. As the Minister will know from that session, a number of vice-chancellors have expressed concern about postgraduate study and wanted to hear more from the Government about how it would be strengthened. Indeed, million+ has said that there is a real risk that we will move into a period of decline, particularly in terms of UK-domiciled postgraduate students. Does the Minister share that concern?
There are two big issues with regard to postgraduate education. One is access, which several people have mentioned, and the other is financing. The Milburn report, which was called “Unleashing Aspiration”, addressed access and said that postgraduate qualifications
“have increasingly become an important route into many professional careers—in the law, creative industries, the Civil Service, management professions and others. But these courses are substantially more expensive than undergraduate degrees—often costing up to £12,000 per year—and there is no student support framework equivalent to the framework for undergraduate. New proposals need to be formulated to establish a clear, transparent and fair system of student financial support for postgraduate learners.”
That throws a real challenge out to the Government. If they are really serious about higher education contributing to social mobility, it should not stop at undergraduate level, and we need to look at postgraduate level.
While I am on my feet, I would not like to miss the opportunity to say that I am glad that the Milburn report did not think about widening access to higher education just in terms of getting some—a few—bright students from lower-income backgrounds into Oxford and Cambridge. It considered the wider issue of making higher education available across the piece to low-income students and, importantly, put the issue of postgraduate education on the agenda. I hope that the shadow Minister as well as the Minister will speak about that issue.
There is growing concern about access. I come from a low-income background and did several years of postgraduate study, but I am not sure whether that would be possible now for someone of my background. That is of concern to us. In researching the issue we could not find any study with up-to-date figures about the diversity or lack of it in postgraduate education, or about the current barriers, and we could not discover whether under-represented groups have been considered specifically. Perhaps the Minister would comment on that.
Before the Labour Government left office in March 2010 the Department for Business, Innovation and Skills put forward a series of recommendations on improving postgraduate education, in “One Step Beyond: Making the most of postgraduate education”. To be fair to the Minister, that report and its recommendations did not just fall off a precipice, which has happened in other contexts. They were brought back in the Government’s response to the postgraduate review, and the recommendations are almost identical. Obviously, those are excellent recommendations. One, for example, states:
“Universities UK and Research Councils UK should do more to identify and promote the economic and social value of postgraduate study.”
The response also states that attention needs to be given to funding. Some specific proposals are mentioned about getting research councils to work with other bodies
“to offer longer periods of postgraduate research”
so that perhaps students can earn income as well. I am sure that hon. Members will be pleased that I am not going to go through the list, as there is not time; but are those proposals being addressed? They seem to offer at least a partial way forward for improving access to higher education and the funding regime.
I also want to ask whether the Department has thought about what recent changes in undergraduate student finance and funding would mean for postgraduate education. The withdrawal of about 80% of teaching funding in England is affecting postgraduate courses, and possibly making them more expensive. In addition, students will finish undergraduate courses with a level of debt that may make them less likely to take up career development loans, in particular, or additional debt to undertake postgraduate study. The National Union of Students says that that is a real worry; in its view the average postgraduate taught fee will rise by about 24% by 2012-13. That could obviously add a disincentive.
My hon. Friend the Member for Sheffield Central also pointed out valuable work by the NUS in surveying current postgraduate students about their financial circumstances. It is worth repeating a few of the points that were made. The survey, carried out in October 2010, was a large one, and 60% said that accessibility of finance or funding was a major factor in deciding whether to undertake postgraduate study. That figure rose to 70% among respondents studying full-time. The 67% who were entirely self-funded were very concerned about debt, overdrafts and credit cards. Self-funded students were also more likely than funded students to consider leaving or suspending their studies, owing to financial concerns. I want to raise that with the Minister, because the more we rely on self-funding, the more students may drop out, as they are just unable to carry on with their studies and raise the necessary income. Fifty-two per cent. of those in receipt of financial support said that postgraduate study would not have been an option for them without it. From my experience I would also make that point.
There are two big challenges: access and funding. Addressing those issues is important, because, as hon. Members have said, not only is postgraduate education important for individuals and universities; it is essential for the country to invest in it, if we are to grow our way out of the economic crisis. If the Minister needs evidence for that he need only read the Centre for Cities report produced a few days ago. It made clear the link between growing a knowledge-based, higher-level-skilled economy and being able to ride out economic downturns. We need that to happen here: beyond the five cities that were identified in the report as potentially doing well, we need universities and research to be at the heart of economic regeneration. I look forward to hearing from the Minister how he will ensure that that happens.
Mr Philip Hollobone (in the Chair)
Even though Luton Town twice beat Kettering Town 5-0, both home and away, this season, I am still pleased to call the hon. Member for Luton South (Gavin Shuker).
Gavin Shuker (Luton South) (Lab/Co-op)
I am particularly grateful, Mr Hollobone, to serve under your chairmanship, and also that you have taken out the bulk of my speech by mentioning those historic victories by the Hatters over Kettering.
Many of my colleagues in the Opposition have raised pertinent points, and I congratulate my hon. Friend the Member for Huddersfield (Mr Sheerman) on obtaining the debate. I want particularly to focus on a couple of areas linked to my experience. I am grateful that I do not have to declare an interest. I am not a postgraduate graduate—or rather, I suppose I should say I am not a postgraduate. If I had been to university for postgraduate education I might have known the exact way to say that. I was born in Luton and went to Cambridge to attend one of the finest universities in the country. [Interruption.] Indeed—I will not repeat the remark made from a sedentary position. I really enjoyed my time at Cambridge, but chose to move back to Luton. When I left, the university of Luton was established; today it is the university of Bedfordshire. Alongside the other modern universities in this country, the university of Bedfordshire is doing incredible work in the postgraduate field. I think that sometimes a lazy shorthand is employed by people who perhaps are not as engaged in the debate as the hon. Members present today, who assume that the bulk of postgraduate education goes on in Russell group universities. The role of modern universities today is hugely interesting. My wife, Lucie, who would want me to point out that she is much smarter than I am, has spent most of the past decade in postgraduate education, and is now a research fellow at the university of Bedfordshire. I met her at the university of Cambridge, and I have witnessed at first hand the work done by the funding councils. I am grateful for it, having been a penniless student myself for most of my twenties.
The broader context of the debate is hugely important. The first thing to say is that there is a growing requirement for graduate qualifications, and Labour colleagues have raised that issue already. We need to compete with the world and that requires us to expand graduate qualifications in this country.
There is high graduate unemployment and underemployment. We know that this crisis is particularly affecting young people in the economic situation that we are in. Upskilling and obtaining graduate qualifications can be a good route through which to ensure that we—as an economy and as individuals—are able to pull out of the nosedive that we are in.
However, the 80% cut in teaching funding has also knocked on to affect postgraduate teaching, even though it was directly aimed at undergraduate teaching. In a sense, there are no Chinese walls. Many of the teachers at postgraduate level are also working in the undergraduate field. When we lose a teacher, or a teaching place, that loss is felt right across the university sector.
Of course, it is worth pointing out that the Government draw from the pool of postgraduate education and, in many cases, directly fund postgraduate education. I do not know if it is in order, Mr Hollobone, to speculate on the number of doctorates held by people in Westminster Hall today, including the civil servants and Clerks, but I will. I know that there are certainly MPs in Westminster Hall who are “doctors”, but I also know how little help they would be if I stubbed my toe on the way out. I am sure that there are people with doctorates and other postgraduate qualifications present right here in Westminster Hall, who feed directly into the machinery of Government.
Let us also look, for example, at the Department for Education, which directly funds the postgraduate certificate in education. We are already seeing that there are changes being made in that system, for instance the reduction in bursaries. Similarly, the Health and Social Care Bill will take away the requirement to train and develop doctors, nurses and others from the strategic health authorities, and it will pass that requirement to GPs.
In the broader context, therefore, a lot is changing in the postgraduate world. There is not only the reduction in funding to consider but the direct action that the Government can take to fund postgraduate qualifications.
Much of the training for those qualifications takes place in our modern-day universities. My hon. Friend the Member for Huddersfield made a very good point when he said that even if there is not a policy vacuum right now—perhaps there is a series of ideas that are being worked through to an ultimate conclusion, which we will hear about in time—it seems that there has been much focus on undergraduate education and much less focus on postgraduate education.
I spoke about modern universities right at the start of my contribution. What do they do? They support a large number of postgraduates; about two in five postgraduate qualifications are gained in our modern universities. They also provide much greater support to part-time graduate students than older universities; they are the ideal place for part-time students to be working in the postgraduate field, so that they can put their skills back into business and learn on the job, as it were. One in two of the postgraduate qualifications obtained by part-time students is obtained at a modern university. And modern universities also support older students, more so than, say, Russell group universities, which are at the other end of the scale for teaching older students. About 40% of the postgraduate students that modern universities teach are over 35.
In addition, modern universities are more likely to reach students from minority ethnic backgrounds and communities; I see that in my own local university, the university of Bedfordshire. Modern universities have also been proven to do very well in identifying new markets, such as creative industries. Postgraduate qualifications can add something to those sectors and to the economy more broadly.
There are a number of things that can be done, and I hope that the Minister will respond in detail to my points when he winds up. At the moment, however, the situation feels a bit shapeless and baggy. Nevertheless, there is one idea that has a lot of traction—it is the idea of bringing in more funding directly from industry and enterprise.
That idea—of bringing private funding into the system—was made earlier in the debate, and it is a brilliant idea. In fact, I am very disappointed that the Browne review did not pick it up and run with it much more on the undergraduate side; I think that we have been quite vocal about that during the last 18 months.
Whatever system we come up with to ensure that our postgraduate education is among the best in the world—that it is adequately funded and that it reaches the students that we want it to, and not only those people who can feel they can afford postgraduate education or who feel a great expectation on them to study at postgraduate level, but a whole range of demographics—it is really important that the Government play a role in ensuring that the funding for that system is available to all students, regardless of where they choose to study and how they study.
My own preference is quite clear—there are obvious economic benefits in ensuring that funding is protected and enhanced. Where there is private funding, however, it should be the role of Government to ensure that it is available to all, regardless of where they choose to study. For example, a postgraduate student support and loan scheme might be a way forward, but we do not want banks simply shifting towards cherry-picking those students they believe have the best chance of earning significant sums in the future, based on the university that students attend or their background.
A loan scheme should be available to all postgraduate students, regardless of whether they are full-time or part-time students, regardless of their income and regardless of their credit rating or background. If the Government choose to go down the route of having a loan scheme, they should consider making it available to all students across the field.
In summary, I have three “asks” for the Minister and I wonder whether he might briefly comment on them. The first “ask” is quite simple; it is about improving the quality of the data that we collect about postgraduate students. Even in the time that I spent researching postgraduate education for this debate, I clearly noticed how little data we have on the types of students who are coming through. With the big funding changes at undergraduate level, it is all the more important that we start looking at the income, background, ethnicity, student profile and level of debt that people are coming into the sector with, so that we can see whether any changes being made by this Government are working well.
My second “ask” of the Minister is to ask him simply to acknowledge both the interdependency between the postgraduate world and the undergraduate world, and the fact that the 80% cut in the teaching budget will have an effect on postgraduate education as well as on undergraduate education. Indeed, I also ask him to acknowledge the point made by Labour colleagues that the cost of postgraduate education may also go up, just as the cost of undergraduate education has.
My third “ask” of the Minister is to ask him to commit to delivering an equitable scheme that is accessible to all postgraduate students—even if is privately funded or supported—to ensure that all of our universities have the chance, the role, the ability and the privilege of providing postgraduate education and qualifications, regardless of where they are located or the courses they run.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
It is a pleasure to serve under your lively chairmanship, Mr Hollobone, and to respond on behalf of the Opposition to what has been an excellent debate.
I congratulate my hon. Friend the Member for Huddersfield (Mr Sheerman) on securing this important and timely debate. He delivered his speech with passion and conviction, and he has a deep commitment to this area of policy. Indeed, he bought additional expertise to the debate, given his involvement in the Higher Education Commission, which is currently conducting an inquiry into postgraduate education. I am sure that all Members of the House look forward to the commission’s report, which will be produced once that inquiry is complete. However, having congratulated my hon. Friend on securing the debate, I must also congratulate my hon. Friend the Member for City of Durham (Roberta Blackman-Woods), who initiated the form-filling that helped to secure the debate.
My hon. Friend the Member for Huddersfield spoke very powerfully about the importance of postgraduate education and the fact that it has been somewhat isolated in the context of the current debate about university education. He also made the important point that higher education should be looked at holistically, and he is absolutely right about that. In addition, he spoke about the impact that the presence of a university has on the city and region in which it is located, and I too can relate to the experience of having a university in my constituency, given that Aston university is in my constituency and both Birmingham university and Birmingham City university are just outside my constituency boundary.
My hon. Friend spoke at length about postgraduate research, which I will discuss later. We also had excellent contributions from the other Members who spoke. My hon. Friend the Member for Sheffield Central (Paul Blomfield) addressed the issues in relation to taught postgraduate courses. He spoke powerfully about issues of access and the effect that widening participation in education can have, especially in improving access to the professions. Having been a barrister before I became an MP, I can absolutely attest to the fact that the professions often feel like middle-class enclaves, and when someone is from an immigrant working-class background—as I am—that is an entirely different kind of world.
My hon. Friend the Member for City of Durham spoke about the role of postgraduate education in strengthening both the academic community as a whole and international research teams, which is a very important point. She also talked about how that speaks to both our role and our reputation in the world. We have always punched above our weight, and we should treasure that. My hon. Friend returned to the important challenge of funding, which I will address later, and my hon. Friend the Member for Luton South (Gavin Shuker) rightly praised the role of modern universities. We are very lucky in this country to have a diverse higher education ecosystem, and we should cherish that diversity of mission, intake and teaching and research strengths.
This has been an important, constructive and necessary debate. Members have already made the point that discussion of higher education in Parliament often focuses on undergraduates, especially on an 18-year-old undergraduate’s journey through the system. That is, of course, extremely important, but it sometimes prevents both recognition of the importance of part-time and mature students at undergraduate level, and adequate discourse about postgraduate education as a whole, which is deeply unsatisfactory. Quite apart from the fact that postgraduate education generates something like £1.5 billion in output, we must, as other Members have said, take a holistic view of the sector if the policies we then formulate are to encourage quality, competitiveness, growth and social mobility.
We very much welcome any expansion of postgraduate education, especially that which took place between 2005 and 2010, as it clearly has benefits for the individual and for society as a whole. Taught postgraduate degrees, particularly when accessed by mature students, can help an individual improve their career prospects or change career entirely, especially with part-time study. Given the tough economic climate we face, coupled with the sheer terror of potential unemployment and what that does to life chances, particularly those of young people, students taking up postgraduate education immediately on completion of undergraduate courses do so increasingly because of the growing belief that we need more than one degree to be competitive.
However postgraduate education is accessed, and for whatever reasons, taught postgraduate education creates an increase in the national skills base and in earning capacity, and in that way benefits the economy and growth. Also essential to innovation and economic growth is research-based postgraduate education, through which we have the best chance of stimulating the kind of innovation we need to effect the rebalancing of our economy and get back to long-term growth, and we believe that the Government can and should play an active role in that. The UK’s delivery of global research output is second only to that of the United States, which demonstrates the health of our sector and the fact that, as I said earlier, we punch above our weight in the world, but with increasing competition from across the globe the Government must ensure that we keep pace with our competitor countries. My hon. Friend the Member for Sheffield Central made an important point about the ageing demographic make-up of the research community, and such issues highlight the need for the Government to bring forward a strategy that maintains the strength and diversity of our research base, especially given the reliance in some parts of the sector on international students, welcome though their contribution is.
One of the biggest areas of concern, as we have heard today, is funding. Funding concerns have been amplified by the Government’s decision to treble undergraduate tuition fees to £9,000. We are concerned not only about the impact that that will have on access to and participation in undergraduate education, but about what higher levels of undergraduate debt will mean for postgraduate education. With cuts in the teaching grant and higher fees, the debt burden gets ever higher, and so too does the prospect that students from deprived backgrounds, who are more likely to be debt-averse, and mature students with family commitments will be locked out of postgraduate education, thereby cementing the dominance of the middle classes. Particularly telling is the situation of those who would have become mature students but are deciding not to bother with postgraduate education because of the higher fees and the associated debt burden. Their aspirations are being blocked because they have come to the view that financially it simply is not worth the risk. That will also have an impact on social mobility, especially when we consider, as other Members have said, that postgraduate education is an important route into professions such as law and the civil service, which are rightly and regularly criticised for the lack of diversity among their intake. That scenario will only get further entrenched in the present situation.
It is in that context that we have argued that the Government should have changed course, to bring the cap on undergraduate tuition fees down to £6,000, a measure paid for by not going ahead with a corporation tax cut for the banks, and by asking the top 10% of graduates to pay a bit more.
Mr Willetts
Will the hon. Lady confirm that her proposals would not reduce graduates’ monthly repayments of student loans in any way?
Shabana Mahmood
The important point is about the headline level of debt, which I was coming on to make. Our proposal takes into account, and does not change, the Government’s decisions on the overall budgets. It clearly shows that it was still possible for them to do more to bring down the headline level of undergraduate fees by one third, thereby reducing the overall debt burden, which in turn would have had less impact on the numbers of people going into postgraduate education.
We welcome the attention being given to future funding options for postgraduate education by various bodies, such as the Higher Education Commission. I also note the report by CentreForum and its proposal for a £10,000 state-backed loan scheme for people taking one-year taught postgraduate courses, and that the National Union of Students and others are considering possible packages. We welcome the work being done to develop models for the sustainable funding of postgraduate education, and while alternative models are being developed and their viability assessed the Government can and should consider what more they can do to encourage the availability of professional career development loans, and to ensure that they work with banks to get the best possible deal for postgraduate students.
The Government’s White Paper on higher education unfortunately barely mentioned postgraduate education. It certainly did not create any legislative space for the discussion of issues affecting postgraduate education, or of how those issues might be dealt with. That was a mistake, and a missed opportunity. I note that the Minister reconvened the Smith review last year, and that additional work will now be done by the Higher Education Funding Council for England, so perhaps the Minister will take the opportunity today to update us on that funding consultation exercise being undertaken by HEFCE, and the participation review.
It is clear from the contributions to this debate and from the concerns highlighted by the higher education sector that a comprehensive strategy for postgraduate education is needed. We have, as other Members have mentioned, heard rumours in the past couple of days that the Government have U-turned on their policy of expanding the presence of for-profit providers in higher education, and so will not now introduce their planned higher education Bill this summer. The Minister might, therefore, have a bit more time on his hands, and could have even more if he heeded our call not to make any further changes to the core and margin model in 2013-14, allowing the sector to enjoy a year of stability. I wonder if the Minister might take this opportunity to redirect his energies into preparing the comprehensive postgraduate education strategy that is being called for by so many.
The Minister for Universities and Science (Mr David Willetts)
Thank you very much, Mr Hollobone, for chairing this debate. I congratulate the hon. Member for Huddersfield (Mr Sheerman) on his opening speech. I have always had a soft spot for him; I remember his chairmanship of the Education Committee, and he was also a student of Michael Oakeshott, so all we Tories have great respect for him. We then heard a series of speeches, which I welcome, from the hon. Members for Sheffield Central (Paul Blomfield), for City of Durham (Roberta Blackman-Woods) and for Luton South (Gavin Shuker), and then from the Opposition spokesman, the hon. Member for Birmingham, Ladywood (Shabana Mahmood). There was a theme, which I am happy to join in the support of, that postgraduate education is very important for a lot of reasons. It is very important for the economy, and for the individuals.
I can tell the hon. Member for Sheffield Central that I was talking to senior managers from Boeing about their overall strategy for research and development. They said that when they were planning an investment in the US, they were taking some leading figures from American universities close to where they were investing to Sheffield, to see at first hand how business-university collaboration could be done successfully. We can get it right, and we should celebrate those examples. Clearly, great achievements have been made at the university of Sheffield and elsewhere.
We have an important and valuable postgraduate education experience. I realise that there are a range of concerns in the sector, expressed by Members in this debate, about the future funding of postgraduate study. Let me make several things clear. First, it is unhelpful to think of it as a problem caused by a pile of undergraduate student debt. The more one looks at the issue, the more it is clear that the idea of a debt mountain that is a burden on people’s shoulders is misleading. It should be thought of not as a debt but as a flow of payments. The model, which we took in many ways from the previous Labour Government, has the best features of a graduate tax. It is essentially 9% of any earnings above £21,000 a year until the cost of the university education is paid for. If a child of mine were leaving university with £25,000 in debt on his or her credit card, I would be worried, recognising that it would threaten their ability to borrow, for example, to pay for postgraduate education if necessary. However, that is not a fair analogy with our student finance proposals.
Paul Blomfield
Does the Minister not accept that he is trying to appropriate the language of a graduate tax to describe a system that is actually nothing but an income-contingent loan? He mentioned the central principle of graduate tax. Graduate tax is a system whereby people pay back according to what they can afford, as opposed to what they had to borrow to go to university.
Mr Willetts
The total amount to pay back is determined by the cost of the higher education, and it keeps the connection with the university. That is where I part company with the graduate tax. The point that I am trying to make is that graduates will experience only a slightly higher deduction from their pay packet by Her Majesty’s Revenue and Customs, and if their income ever falls to less than £21,000, no payments whatever will be made. That matters to the debate about postgraduate education. I am not simply trying to reopen the debate on our undergraduate proposals.
The idea seems to be that it will be harder for postgraduates to finance themselves, because they will suddenly have an enormous amount of debt. In all the conversations that we have had with lenders about, for example, graduates’ ability to access a mortgage, they have said that what lenders look at is fixed monthly repayments. We have increased the threshold for repayments from £15,000 to £21,000, so the monthly repayments under our system have fallen compared with the system that we inherited from Labour. That matters to postgraduates’ ability to fund themselves. That is the source of Opposition Members’ anxiety: a misunderstanding of the implications of the reforms.
Nevertheless, I accept that there is concern about postgraduate issues. We recognise the need to monitor closely what is happening, investigate if problems arise and be absolutely clear what they are and what will need to be done about them. Today, we published the letter that we sent to the Higher Education Funding Council for England with the grant statement for the coming year. A paragraph in that letter specifically discusses postgraduates:
“We are pleased that the Council is taking the lead on gathering evidence to improve our understanding of the purpose and characteristics of, and outcomes from, postgraduate study, with the intention of reviewing postgraduate participation following the changes to undergraduate funding.”
We accept that it must be monitored.
“We also note the progress the Council is making, with its HE Public Information Steering Group”
on better information for postgraduate students. Also, of course, we refer to continuing
“work on strategically important and vulnerable subjects”.
Mr Sheerman
Where can we get hold of that letter? We would like it urgently. I also remind the Minister, who always mentions that I studied under Michael Oakeshott, that I was also taught by Ralph Miliband.
Mr Willetts
That in turn gives the hon. Gentleman an opportunity to educate the junior Milibands. The letter was published today on the website of the Department for Business, Innovation and Skills.
We have asked HEFCE to monitor the situation. I accept that one finds when one digs into the matter that we need better access to data. Some data are collected by the Higher Education Statistics Agency, and some by HEFCE. The hon. Member for Luton South, in particular, discussed that. We need to do better at making those data accessible.
I have asked officials to continue to consider all the policy issues on postgraduates. This is a coincidence, I think, but this very afternoon—probably as we speak—a round table discussion on postgraduate education is being held with BIS, HEFCE, the research councils, the learned societies, mission groups and other interested parties. We recognise the importance of watching for any effect on behaviour and seeing whether any policy proposals are called for. However, we must not forget that at the moment, postgraduate education is a mixed economy.
Of course there will be a lot of interesting ideas. People have referred to Tim Leunig’s paper for CentreForum, one of the few policy ideas proposed so far. I would welcome a more wide-ranging debate, but good for Tim Leunig for setting it going.
I do not think that there is scope under any political party for the creation of a new public spending programme. We would have to be very careful. We already support postgraduate education and research through a range of expenditure programmes, not just through HEFCE, although that alone contributes to the cost of supervision to the tune of £200 million. We also support postgraduate work through the research councils, and the proportion of PhD students training in cohorts through centres for doctoral training is increasing. Those centres have been shown to have value for students. They develop people who are internationally competitive and more productive and have a high impact.
Only yesterday, at the university of Reading—again, this is a coincidence—I announced a £67 million new investment in postgraduate training and development in the biosciences. Over the next three years, the doctoral training partnerships that I launched yesterday will support 660 four-year PhD students, as well as 70 other postgraduate studentships from this autumn. Those programmes aim to ensure that postgraduate study and research in the UK continue to have strength and depth.
The coalition recognises the value of the postgraduate experience to both the individual and the economy. We recognise that it is a key part of our universities’ role, and that it has grown more rapidly than the undergraduate experience. It is a source of important revenue, notably external revenue, for our universities. We will collect more data on participation than previously. We are continuing to see what policy options are available if they should be necessary, but we must work within a framework. We do not wish to create a new public expenditure programme when, historically, the mixed economy has worked successfully.
Stoma Care
(12 years, 3 months ago)
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Mr Philip Hollobone (in the Chair)
Someone has asked me to explain the subject of this debate on sponsored nurses and off-script tendering in stoma care, but I do not know where to start, so thank goodness that the hon. Member for Cardiff North (Jonathan Evans) is here to reveal all and enlighten us.
Jonathan Evans (Cardiff North) (Con)
Thank you, Mr Hollobone, for that generous introduction. It is a privilege to serve under your chairmanship for the first time in my political career, and I hope that I will enlighten you.
Every year, more than 40,000 people in this country are diagnosed with bowel cancer. Bowel cancer is the UK’s second biggest cancer killer, but if found early enough, 90% of patients can be treated successfully. Often, colon or bladder surgery will lead to the fitting of stoma products or bags. Two thirds of such patients are estimated to need stoma care for the rest of their lives. With more advanced screening and the excellent work that is being done to raise awareness, it is expected that those patient numbers will only rise to even higher levels.
Valuable work is being done by many charities in this sector, and I give particular praise to Lynn Faulds Wood for her efforts in highlighting the prevalence of bowel cancer and for campaigning for greater awareness and early intervention. The charity Beating Bowel Cancer has designated this week as “be loud, be clear” week, and the charity is at Westminster today—its members are at the Speaker’s apartments as I speak—raising awareness among our parliamentary colleagues.
We are all in debt to such individuals and organisations for their campaigning work, but I want to make it clear that the focus of this debate is not on the challenges of bowel cancer itself, but on two specific concerns in relation to the current operation of stoma care—the care of those who have had colon or bladder surgery and require the fitting of medical devices, such as stoma bags. My concern relates to the private commercial sponsorship of stoma nurses and the potential impact of major changes that are being discussed between private sector manufacturers and primary care trusts that might eliminate any patient choice in relation to the medical appliances that they receive.
I am grateful to the three major patient groups in this sector—the Colostomy Association, the Urostomy Association and the Ileostomy and Internal Pouch Support Group—all of which have supported me in drawing attention to these issues and provided helpful background information.
Let me set this debate in context. There is almost daily comment about the Government’s proposed reforms of the NHS, and any such debate regularly throws up the charge that change in the NHS inevitably means privatisation of the NHS. Only last week, the House debated those issues, and over the weekend the head of the Royal College of Nursing added his voice, on behalf of the nursing profession, to those who are calling on the Government to abandon their reforms. It has therefore been a major surprise to discover over the past 18 months that the vast majority of NHS nurses who provide stoma care through health trusts in the UK actually have their salaries met by private commercial sponsors.
Glyn Davies (Montgomeryshire) (Con)
I am one of the 40,000—I contracted bowel cancer in the past and have had a colostomy. I also have a commercially sponsored stoma nurse, who is a guardian angel. We need to realise that a number of stoma nurses are marvellous. My stoma nurse made it clear to me that there were alternative products that I could have used, but it so happens that I accepted one from the same company that was paying for her. It was clear that I could choose any product that I wanted, and I was not put under any pressure.
Jonathan Evans
I respect my hon. Friend’s views on many matters and also have only praise for stoma nurses, but that does not take away many of the concerns in relation to sponsorship. Sponsors have a direct interest in the clinical decisions made by nurses, because they are the manufacturers of the products that are being prescribed under the NHS.
If the Secretary of State for Health had proposed the introduction of such an arrangement—the sponsorship of nurses by commercial organisations—as part of his current reforms, we can imagine the outrage it would have produced. “Newsnight” and the “Today” programme would have relentlessly questioned the Minister. We might even have seen a “Panorama” special on the BBC. The reality is that this extraordinary situation started more than 30 years ago and expanded to its current pre-eminence during the years of the previous Government.
The concept was thought up not by the commercial firms themselves, but by the health care trusts, which first approached the manufacturers to explore the commercial opportunities. The Department of Health does not appear to have played any part in the dialogue, not even in terms of establishing a protocol that could reassure the public that commercial sponsorship does not impact upon clinical judgment, just as my hon. Friend the Member for Montgomeryshire (Glyn Davies) has said that he is satisfied that that was not the case in his experience.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman think that it would be acceptable if sponsorship were offered to help the patient or the health board itself?
Jonathan Evans
I am not going to propose the end of sponsorship, but we need more robust mechanisms of managing the potential conflicts of interest. I will develop that argument in the limited time available.
The Department of Health appears to take comfort in the professional code of nurses, which states:
“You must ensure that your professional judgement is not influenced by any commercial considerations.”
Surely, we can be sure that that code is being properly observed only if the Department undertakes, at least from time to time, some assessment of the commissioning decisions being made, but it has never done so.
In January 2001, The Guardian drew the practice to wider public attention, reporting that the NHS planned to crack down on these commercial sponsorship deals. The paper claimed that more than half of stoma nurses were funded by commercial deals that were worth— remember that this was a decade ago—up to £100,000 a year to each health trust. The RCN claimed that the manufacturers specified that a minimum percentage of patients had to be fitted with the commercial sponsor’s products.
The previous Government’s response to The Guardian’s revelations was to issue new guidance requiring NHS trusts to review all such arrangements in which suppliers met all or part of the cost of members of staff, discounts on drugs and equipment, or subsidised research and training as a condition of the contract. Nevertheless, Health Ministers maintained that they did not want to prevent collaborative partnerships between the NHS and private contractors—nor do I—but they also said that clinical decisions should always be based on evidence of what was best for the patient. I agree, but how do we know? Again, the Department did not undertake any assessment of its own to reassure itself that that was being done.
By 2003, sufficient concern was being expressed over these commercial deals that the then Government launched the first of what was to be a series of consultations on the arrangements for paying appliance contractors. By 23 January 2006, the Government issued a report on the consultation, noting:
“Specific and frequent mention was made of the issue of sponsored nursing posts in secondary care, with most parties”
—I stress, “most parties”—
“feeling that this practice was inappropriate, and that it should cease.”
The Department of Health’s response to that concern was to ignore it. It maintained its policy of resisting any assessment of impact of commercial sponsorship on commissioning decisions, and that strand of concern was, interestingly, subsequently eliminated from further consultation on these matters by Health Ministers.
In Scotland, the Scottish Executive took a completely different line. The Scottish Government decided that commercial sponsors could no longer directly subsidise specialist nurses in stoma care. The nurses were taken on and paid directly by the NHS. In fact, the British Healthcare Trades Association funded transitional support to the Scottish health boards for two years because of that dramatic financial change. The outcome was also dramatic. Free samples of stoma products were withdrawn from Scottish hospitals by the manufacturers that had always previously provided them, and it is estimated that, over the following five years, the number of specialist stoma nurses in Scotland fell by up to half.
In Scotland, therefore, the policy has been to ban commercial sponsorship—this addresses the concerns expressed by my hon. Friend the Member for Montgomeryshire and the hon. Member for Strangford (Jim Shannon)—with a consequential fall in both the quality and the availability of specialist stoma care to patients. By contrast, the policy of Health Ministers here has been to refuse to undertake any assessment whatsoever of the impact of commercial sponsorship on these arrangements within the rest of the UK.
As I hope I have made clear, I am not arguing for the Government to follow the Scottish policy. Patient groups have made it clear to me—this is endorsed by the words of my hon. Friend the Member for Montgomeryshire—that they recognise that the quality and the availability of stoma care in Scotland has fallen markedly. I want to make it clear that I am not questioning in any way the commitment or the concern of stoma nurses. Again, I can say that patient groups who have briefed me for this debate have made it clear that they deeply value the services that are provided by stoma nurses.
Nevertheless, as I indicated to the hon. Member for Strangford, there are real questions about conflict of interest, which successive Governments, sadly, have ignored. Let me draw an analogy with another sector that we debate a lot in the House: the financial services sector. Today, all financial services companies are required to satisfy the regulator that they have robust processes in place that are fully understood by all staff for managing conflicts of interest. Can we imagine a Minister standing at the Dispatch Box talking about concerns with financial services and saying that he is entirely satisfied there is no need for robust conflict of interest processes because he is satisfied that the professional code of those who work in financial services will always require them to act properly? That is a ludicrous proposition. There is a need for the management of conflicts to be subject to a similarly robust process in terms of stoma care.
In March 2011, Health Ministers were asked by parliamentary colleagues some basic questions to glean information on the number of stoma care nursing posts sponsored in the UK. No helpful response was provided, and the Department had no statistics to share with colleagues. So, for this debate, I have had to turn to the British Healthcare Trades Association for the figures. According to the association, stoma care manufacturers sponsor more than 200 of the 337 departments in England at a cost of £10 million a year. However, some of those manufacturers share the same concerns about commercial sponsorship that I am outlining. They only maintain their sponsorship for fear that other suppliers will otherwise corner the market. Those manufacturers have even expressed their concern to me that the current commercial arrangements might fall foul of the new Bribery Act 2010. Have Ministers undertaken any assessment of that?
On 15 October, I wrote to the Minister and received a response from him on 9 November confirming again that the Department had not made any assessment of the commissioning decisions of PCT employees sponsored by private enterprises. Again, he highlighted the fact that Ministers relied on the code of professional conduct, but he said in his letter that he was satisfied that that was a concern and that he had asked his officials to make further studies into the activity. I hope that the Minister can tell us the outcome of those studies.
The issues that I have raised relate to the maintenance of patient choice in the appliances that are prescribed for stoma care, and the concerns are shared by patients, charities and several manufacturers. Such concerns have been shown to be very well-founded by reports of recent discussions between major manufacturers of stoma care products and PCTs about what has come to be called off-script tendering, which you mentioned in the second part of your comment, Mr Hollobone. What is being proposed is that preferred or single supplier agreements are made between commissioners and manufacturers, in which the commissioning body would get a bulk discount for requiring all patients to take one manufacturer’s products. The arrangements would then bypass the operation of the drug tariff for the provision of such products, which is regularly reviewed on an annual basis by the Department.
Currently, a GP or suitably qualified nurse issues a patient with a prescription—an FP10—and the patient is free to take that to the manufacturer of their choice to have the product dispensed by a pharmacy contractor or an appliance contractor. The drug tariff industry forum considers the advantages of that system to be patient choice, cost and value for money, quality of products and a centralised system working on a local basis. The British Healthcare Trades Association has obtained legal advice that suggests the off-script arrangements being discussed by big manufacturers might be beyond the powers of health trusts. However, the question arises whether such arrangements could be taken forward as part of the Government’s health reform.
Those questions were raised by the Urology Trade Association, which is a body representing 95% of manufacturers, and by the Urology User Group Coalition on behalf of patients in evidence given last year to the Select Committee on Health. Unfortunately, follow-up questions by parliamentary colleagues confirmed the long-standing Department of Health response that no assessment of those issues had been undertaken either.
The thousands of patients who suffer bowel or bladder cancer and require ongoing stoma care deserve better. They should be assured that the Government will defend patient choice and maintain robust processes for managing real or perceived conflicts of interest in the commissioning of services. The Government should ensure the continued provision of specialist nursing advice and support and reassure us that it is in no way influenced by financial or commercial considerations.
Mr Philip Hollobone (in the Chair)
All has become clear. What are the Government going to do about it?
The Minister of State, Department of Health (Paul Burstow)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Cardiff North (Jonathan Evans) on securing the debate and on setting out so clearly his concerns. I want to spend the rest of the debate trying to address the points he has made.
I certainly echo my hon. Friend’s comments about the excellent work that Lynn Faulds Wood has been doing over the years to highlight and raise awareness of bowel cancer, not least through her personal experience. This month, the first ever Government funded “Signs and Symptoms” campaign for bowel cancer has been launched and the pilot of the roll-out of flexi-sigmoidoscopy has also begun. The Government can therefore rightly claim to be taking these matters very seriously indeed and to want to see significant improvements in survival rates from bowel cancer.
My hon. Friend also talked about the fact that—this might come as a surprise to some people who listen to this debate or read it afterwards—private involvement in the NHS is not some creation that has occurred in the past 18 months. The interrelationships between the NHS and the private sector have been there right since its foundation and were a growing feature of it during the life of the previous Administration.
Paul Burstow
Let me develop my point a tad further and then I will be more than happy to give way to my hon. Friend, although I hope to ensure that I conclude answering the questions of my hon. Friend the Member for Cardiff North.
My hon. Friend is absolutely right. As part of the reforms that the Government are introducing, we need to ensure that we close the loopholes that the previous Government left gaping in their legislation. We also need to ensure that, as a Government, we have transparency and clear rules under which people operate, so that we see competition as a servant of the patient’s interest and not as an end in itself. That is absolutely integral to those reforms.
Glyn Davies
I simply wish to say how shocked I was to discover the arrangements nearly 10 years ago, when I was given a colostomy nurse of my own. I was making the very point that my hon. Friend the Member for Cardiff North (Jonathan Evans) made—that by pushing the matter, I was threatening the future of the service in that particular hospital. If we try to address what is a legitimate concern, we must have a guarantee that there will be funding, so that we do not have a repetition of the Scottish experience.
Paul Burstow
That is a very succinct summary of the case that our hon. Friend has made in his Adjournment debate today.
Let me say something about prescribing arrangements because it may help if I set out the arrangements for these products or appliances, as they are usually called, in terms of the NHS in England. Prescribers operating under the NHS primary medical care contracts are able to prescribe as appropriate for their patients those stoma and neurology appliances listed in part IX of the drug tariff. There should be no barriers to prescribing a stoma product on the NHS, as long as it is listed in part IX of the drug tariff. NHS dispensing contractors, pharmacies, dispensing appliance contractors and dispensing doctors are able to dispense prescriptions of these products. Primary care trusts are responsible for ensuring that general practitioners are complying with their primary medical care contractual arrangements and that dispensers are complying with their contractual frameworks. Within that, there is a set of checks already in place to deal with the prescribing practices of GPs.
Jonathan Evans
In that context, will the Minister say that he deprecates off-script tendering arrangements, in which major manufacturers—in fact, multinationals—seek an arrangement with PCTs making them the sole supplier?
Paul Burstow
I will come to that part of my hon. Friend’s speech a little later, if he will forgive me.
New services associated with dispensing such appliances in primary care were introduced in April 2010—I stress that date—including emergency supply of appliances at the request of the prescriber, repeat dispensing service and, where pharmacies and appliance contractors choose, provision of appliance use, reviews and customisation of stoma appliances. Customisation—personalisation and greater choice—is an essential part of what we need throughout health care delivery.
The key point in my hon. Friend’s debate is sponsored nurses, the role that they play and possible conflicts of interest, highlighted by all hon. Members who contributed. There is concern in some parts of the industry, including companies in my hon. Friend’s constituency, which led him to write to the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns).
Paul Burstow
My hon. Friend rightly mentioned patient groups and I pay tribute to their work.
Stoma specialists play a vital role, as we have heard, supporting patients adapting to a life with a stoma, which often involves a number of physical and psychological changes. Stoma care patients face a number of issues, many of which are still considered taboo and can lead to embarrassment and distress. Services provided by stoma nurses are therefore much valued, as we have heard today, by those receiving them.
I am aware that the employment of some specialist nurses is funded by some manufacturers of stoma products to support patients in hospital and in their own homes. That can also lead to concerns, which have been so well set out today, about potential conflicts of interest. Although I recognise the potential for conflicts of interest, my hon. Friend will forgive me if I repeat the code of professional conduct that he mentioned, because it is relevant to this point, and I will mention why it remains relevant.
The code states that nurses must ensure that their professional judgment is not influenced by any commercial considerations. Any concerns about professional conduct are of course within our framework of regulation of professional groups, which is a matter for the Nursing and Midwifery Council. As a result of my hon. Friend securing this debate, I have made further inquiries of the NMC and the Royal College of Nursing, asking whether they are aware of any concerns being raised. The answer was no. I suspect my hon. Friend would say that that is because they are not reviewing and monitoring this matter either.
I will follow up on the report published some years ago by the RCN, which my hon. Friend mentioned, because although it is a little bit out of date it clearly speaks to some of the issues that he talked about. I will go further than that, because officials have had discussions of the sort mentioned by my right hon. Friend, in his response to my hon. Friend’s letter of November 2010, with suppliers and trade associations on sponsorship. I understand that one prominent trade association, the British Healthcare Trades Association, is discussing the industry’s views with its members. We have yet to receive the final feedback on those issues from the industry. I hope that, through this debate, we can ensure that we get that response, because the Department will certainly want to see it.
The BHTA code of practice—another code of practice—for health care and assistive technology products and services states:
“No pressure must be exerted on the sponsored individual to favour the sponsoring company’s products over any other. At all times the products supplied should be that which the professional considers is best suited to the client’s needs.”
Clearly, the trade bodies themselves recognise that potential risk and have identified it in their own codes of conduct with regard to their members.
On localised formularies and tendering, I am sure my hon. Friend is aware of the pressures facing NHS organisations as a result of our ageing population, and the increased diagnosis and treatment of cancers that he mentioned. On top of that, the NHS obviously has to achieve the Nicholson challenge of £20 billion of efficiency savings by 2015 through a focus on quality, innovation, productivity and prevention. Every saving made from that is being reinvested in patient care to support front-line staff. As we move forward, it is very important that NHS procurement is undertaken at national, regional and local level via the NHS supply chain, regional collaborative procurement organisations and individual trusts. Some NHS organisations may also use formularies to form the basis of a recommended list of products for prescribers, which is intended to provide a sufficient range of choice to meet the clinical needs of most patients. They may also run tenders to acquire local supply of these products. Local formularies or tenders are generally prepared by multi-disciplinary teams and reflect, as far as possible, best clinical practice.
I understand the concern that the hon. Gentleman has about choice and I appreciate the importance that stoma patients often place on continuing to receive a product in which they have confidence. We want to ensure that patients are at the heart of the clinical decisions that are being made about them, which is one of the reasons that we want to see a wide range of products available through the drug tariff to meet different needs of individual patients. However, and it is important that I stress this, any local arrangements of the sort that the hon. Gentleman has described do not override the clinical judgment of the GP who is still free to prescribe products listed in part IX of the drug tariff to meet specific needs of patients. Any decisions to undertake local procurement activity rest with local NHS organisations—primary care trusts now, clinical commissioning groups in the future—and we expect them to act in accordance with the principles when they are exploring the opportunities for tendering.
When it comes to patient choice, we want to go further than that. As part of our commitment to this policy of any qualified provider, we identified continence services as a good candidate for the approach. We felt that the competition should be on quality and not on price.
Jonathan Evans
Before the Minister concludes his remarks, let me again raise one question in relation to sponsored nurses. He referred to the code of professional conduct, which places the onus on the nurse. Nurses have to exercise independence of thought while knowing that their salary is being met by a commercial sponsor. Is it not the case that the position of those nurses would be enhanced if the Government were to ensure that there was a robust arrangement for the management of conflicts of interest, which manufacturers knew existed, rather than leaving all the onus on the nurses themselves? That is placing too much on them and not ensuring that the public are satisfied that we have the same processes for requiring management of conflicts that we require in other public policy areas.
Paul Burstow
The Government recognise that sponsored nurses provide a valued service. We have heard that very well expressed in this debate. There is a potential for conflict of interests. There are codes that provide a framework in which those decisions should be made. My hon. Friend has presented very clearly his concern on behalf of a range of patient groups that that is not working as well as it needs to. We have already indicated our desire to engage with the trade associations and we need to carry that through to its conclusions. We are looking forward to the response of the trade associations. I would certainly be happy to give further thought to the points that my hon. Friend has made during this debate. Our reforms are very much about ensuring that conflicts of interest are identified, managed and transparent. I hope that, as a result of this debate, we have brought this issue to this Chamber in a way that is very helpful so that we can move it forward after today.
Micro-Businesses
(12 years, 3 months ago)
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Mr Philip Hollobone (in the Chair)
We cannot mention the word micro-business in this House without thinking of the hon. Member for Newton Abbot (Anne Marie Morris). We now have a very important micro-debate on micro-businesses.
Anne Marie Morris (Newton Abbot) (Con)
I look forward to serving under your chairmanship, Mr Hollobone, and I am delighted to see the Minister in his place. As you rightly say, micro-business is absolutely at the heart of what I have been doing in my time here in the House. Perhaps I should start by saying that there is no division or debate about the importance of micro-businesses. I am absolutely clear that the EU and the UK recognise their importance and the role that these very small businesses play in growth and community stability. The challenge for us today is this: what can we do to ensure that Government policy is best shaped to help that growth? I will consider that in relation to four different areas.
First, we need to consider how we might clarify what we mean by a micro-business. Secondly, we need to examine regulation. We need to consider what the Government could do to reduce the burden of regulation and to reduce not just the amount of taxation—that is a difficult issue—but the bureaucracy that goes with it. Thirdly, I should like to consider how we might help micro-businesses to get access to finance and to consider alternative sources. Finally, I should like to consider the culture change that we need to make to help this country to grow micro-businesses and to help young people to see them as a career route to which they might want to aspire.
In the UK, we do not have a definition of a micro-business. The EU has definitions; they are not compulsory but voluntary ones. It defines small and medium-sized enterprises, micro-enterprises and micro-entities. Perhaps when the Minister is considering any changes at EU level, he will suggest that the last two names are too similar. Let me explain the difference between a micro-enterprise and a micro-entity. A micro-enterprise is a business with fewer than 10 employees and a turnover of less than €2 million. By contrast, a micro-entity still has a cut-off of 10 employees, but the turnover cut-off is €700,000. There is an additional option test of assets worth up to €350,000. Those are ceilings to the definition, and the criteria—whether we consider the number of employees, turnover or assets—are optional, so it is a very flexible definition.
As a matter of practice, the UK Government and particularly the Department for Business, Innovation and Skills have accepted the ceiling in most cases, but it is interesting to note that the Department for Work and Pensions has recognised that there is a significant difference between those businesses with fewer than five employees and those with more than five employees. It has recognised that a business with fewer than five employees does not have the same managerial support and expertise. Therefore, the burden of regulation is that much greater. In secondary legislation under the workplace pensions reform, the DWP said that micro-businesses should mean businesses with fewer than five employees. That is particularly relevant now, because the EU is considering reviewing the definitions again, while it reviews the Small Business Act.
The Minister will know that I have argued for some time that the definition of fewer than 10 employees encompasses too large a group of businesses to enable the Government to focus their policy, not that I would choose a smaller definition to exclude businesses from relief. On the contrary, unless the definition is realistic and properly applies to a recognisable group, there will be fewer exemptions from which small businesses will benefit.
My real concern, however, is that when the European Union looks again at the definition, it may choose to remove the flexibility and instead have a fixed definition, with a fixed number of employees and turnover. That will significantly reduce the UK’s ability when it wishes to use those definitions, as indeed it may be required to under EU legislation. So I think that it is for the Minister and the Government to decide now what they think the right definition is, not only so that they can lobby the Small Business Act review group, but for their own purposes, so that should they want to use a small definition for a tax scheme or in relation to pensions, they still have the flexibility to do so.
Both the EU and the UK are committed to reducing the burden of regulation on these very smallest of businesses. Indeed, for new legislation, the EU has a lovely mantra: “Think Small First”. That is spot on. Going forward, it has concluded that any new legislation should, de facto, exclude micro-entities—that is the smallest size that it has come up with—unless there is a good reason for including them. That sounds like a good starting point. It also says that for the next size up—micro-enterprises—any new legislation should have a light-touch approach.
Andrea Leadsom (South Northamptonshire) (Con)
My hon. Friend has done extraordinarily well to obtain this debate. Micro-businesses are such an important part of our economic growth going forward. Does she agree that as more than 90% of very small businesses are UK-only, it is astonishing that the EU is telling them what to do at all?
Anne Marie Morris
My hon. Friend makes a very good point. Such businesses need the freedom and flexibility to do what entrepreneurs do extremely well. Her intervention is absolutely en pointe.
Turning to the UK, I am pleased that the Government have introduced a three-year exemption on new regulation, and they are to be commended for that. The real challenge for the EU and the Government is what do we do about the pages and pages of existing regulation. The Government have introduced the red tape challenge, and I commend them for that. They have already looked at 12 sectors, and there are five more to come. I believe that they will report in three months or so, which will be valuable. Will the Minister adopt the EU mantra, “Think Small First” when he considers what can be got rid of? The EU has also gone through a simplification procedure on a number of occasions, but at the end of the day, we need to move faster and further.
The Minister has already looked at one area that needs further review from the perspective of micro-businesses: employment law. The British Chambers of Commerce has raised the issue with Ministers and in its various reports, but recruitment and dismissal procedures are onerous for very small businesses. No one wants to take away an employee’s rights, but the overall protocols and processes are complex. The second issue that small businesses have raised with me is health and safety. Lord Young has done some valuable work, and I look forward to it being implemented so that low-risk businesses can be excluded from much of the burdensome regulation and a more pragmatic approach is taken to those in higher-risk categories.
Still under the heading of regulation, I want to raise some issues about taxation. Paying less tax is clearly something that we would all be happy about, but it is the burden of the process that causes real pain for very small businesses. First up is fuel duty. I would, wouldn’t I?—I have been approached by a number of small businesses—plead with the Minister not to implement the fuel duty rise in August and to look again at a price stabilisation mechanism, because that would make the cost of petrol affordable and predictable for the smallest businesses. Both things are equally important.
Turning to national insurance, the Government have a good record on the rate and the holiday that they introduced for new businesses, so that they would have relief from employer national insurance for their first 10 employees. I suggest that we could allow mini-micro businesses—we have so many definitions on the table at the moment, but those with fewer than five employees—who take on up to four employees, so those with a total work force of four, not to pay employer’s national insurance for the first year, although employee contributions would stay in place. That would enable them to assist with the cost of the training and general upskilling of those new employees.
The group employing one to four employees represents 7% by turnover of the private sector, so it is not a small group for which I want to the Government to provide support. They are already considering the challenge of aligning PAYE with the national insurance regime, and I look forward to the results. May I encourage the Minister and his Cabinet colleagues in the Treasury to look at simplifying the classes, because there are so many that the average bookkeeper is totally confused?
I turn now to business rates. Again to the Government’s credit, they extended the small business rate relief and said that the scheme they were introducing would apply for a further year. I suggest to the Minister that that becomes a permanent feature, or lasts at least until the end of this Parliament. It is valued by small businesses, and that really would make a huge difference. However, business rates give rise to process issues, the first of which concerns valuation. Why do so many of the large business players, such as Tesco and Sainsbury’s, seem to be paying less than the smaller players? There is something wrong with the way in which the valuation criteria work, and they might sensibly be reviewed. I am often approached by small businesses that believe that they are suffering hardship and are frustrated by the appeals procedure. It is so bureaucratic and takes so long from start to finish that generally they are out of business by the time that they have finished the process, which simply cannot be what the Government intend.
My final point on business rates concerns empty properties. I accept that an incentive is needed to bring such properties back into use, but allowing six months, or three months for retail, to do so is not long enough, and the penalty for leaving them empty longer than that is disproportionate.
I turn now to VAT—a tax that is necessary and without which we would not be able to take this country back into the black. None the less, it has some wrinkles that the Minister and his Treasury colleagues might helpfully look at. We have on a number of occasions talked about the possibility of reducing rates for restoration and repair of houses, bringing the rate down to 5% rather than the full 20%. It seems to me that, given the pressure on the Government to increase the available housing stock, now is the time to look at that again.
Colleagues have considered a reduced rate of 5% for the accommodation charge for bed and breakfast and in hotels. Given that this is our Olympic year, why do we not set the rate at 5%, just for this one-off tax year, and let it be part of our marketing campaign to get people to visit the UK and enjoy the Olympics?
Perhaps one of the biggest challenges is the VAT cliff: once a business is earning £73,000, it has to register for VAT, and if it provides services to individual customers who are not VAT registered, the increase in profitability that it has suddenly to achieve is significant. I suggest that we look at introducing a ratchet mechanism or a VAT rebate, which will ease the situation so that the full force of VAT does not affect the business in the first year.
Jeremy Lefroy (Stafford) (Con)
Does my hon. Friend accept that in some cases the VAT threshold—the cliff edge—acts as a disincentive to growth?
Anne Marie Morris
My hon. Friend makes my point extraordinarily well. It prevents growth, and if we can find a way of easing the burden, that would be well worth while.
My final point on VAT concerns the enforcement challenge. Only last night a small business came to me saying that it was one week late with its VAT and had been asked to pay £955 as a penalty on an original bill of £6,370. Clearly, we want people to pay, but that business was only a week late and the penalty seems disproportionate.
The third issue is access to finance. The challenge is how to make better use of what we have and how to find new sources and new organisations to provide money to very small businesses. Under the existing arrangements, the problem for the banks is that they are in a cleft stick. Given the capital adequacy requirements, if they offer a loan to what is inevitably a risky start-up business, they have to do so at very high rates, so the loan might not be accepted. Can we consider capital adequacy adjustment for the banks—just for loans to micro-businesses, not for the rest? The Government schemes to provide equity, debt and so on are aimed at the whole SME community, ranging from those with no employees to those with 250. Banks are in business to make money and are targeting most of their help at the larger businesses with good, clear business plans and a track record. We need some ring-fenced schemes specifically for micros. The Minister might like to consider that with his Treasury colleagues when we get to credit easing.
The Government are consulting on new sources of finance until the end of this week. The Federation of Small Businesses has looked at other sources of funding and will share its findings with the Government. I recommend that the Government look at what is going on in central and eastern Europe, in Asia and in south America—countries that have more experience than we do of different funding mechanisms.
I have an additional suggestion. One of the challenges faced by most small businesses is that, when they start up, they cannot separate the risk and the liability of the business from personal assets and find themselves having to mortgage their house and give personal guarantees. Can we not consider extending the limited liability partnership?
Mr Philip Hollobone (in the Chair)
It is likely that we will be called to another vote imminently, but I shall call the hon. Member for Newton Abbot (Anne Marie Morris), who might want to use these next two or three minutes to wind up her remarks.
Anne Marie Morris
I shall repeat my last point, because it might have been lost. I should like the Minister to consider using the limited liability partnerships legislation to create a new limited liability sole trader equivalent, which would enable the enterprises to have the limited liability benefit without the corporate registration requirement.
In conclusion, I believe that the Minister has enough to think about, and I should like him to go away and indeed think about the matter, and then come back and tell me what might and might not be possible. I recognise that not only does the detail need to be addressed, but that we have the bigger challenge of changing the culture through our education system—primary, secondary and tertiary—our local businesses, which might support these little baby businesses, local government, which can provide incubators and start-up units, and our local enterprise partnerships, which can also provide support and guidance. I therefore look forward, with pleasure, to the Minister’s response.
Mr Philip Hollobone (in the Chair)
The Minister with responsibility for small businesses, but with a big heart: Mark Prisk.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
You are very kind, Mr Hollobone. Within the 10 minutes that I gather I have, I should like to try to respond to the smorgasbord of ideas suggested by my hon. Friend the Member for Newton Abbot (Anne Marie Morris). Although this is indeed a debate about micro-businesses, it is nevertheless significant—colleagues are still streaming back from the vote in the main Chamber.
This country has a strong tradition of entrepreneurship, and we as a Government really do have an ambition to ensure that we retain, and indeed strengthen, our position as one of the best places in which to start and grow businesses, throughout their life cycle—start-ups, micro-businesses, small and medium-sized enterprises, and so on. About 4.3 million micro-businesses exist in the UK, and yes, they represent about 95% of all enterprises in the country. In that cohort lies a huge variety of enterprise, everything from the university high-tech business—the spin-off—right the way through to the traditional family concern. Therefore, the Government need to be clear and effective in focusing on the right long-term framework for all types of enterprise, regardless of size and throughout their development. That will relate, in a moment, to the question of definition.
My hon. Friend has rightly set out her thoughts about how we can best help micro-enterprises, and I want to put very firmly on the record, as you have done Mr Hollobone, that with her enthusiasm and knowledge she is one of the best champions in this field. We could do with more champions like her.
I shall address the question of definition, and then come on to some of the other issues, at reasonable speed I am afraid, given the time before me. The issue that has been highlighted is: how do we define micro-enterprises? In some cases, people have argued that we might look at that group of up to and no more than four employees—
Mr Philip Hollobone (in the Chair)
Order. I am sorry to interrupt the Minister, but what we feared would happen has happened: there is another Division in the House. I encourage Members to come back as quickly as possible. I should like to restart the debate at 16 minutes past 5, at the latest.
Mr Philip Hollobone (in the Chair)
I thank hon. Members for returning so quickly. We have until 5.21 pm.
Mr Prisk
I shall recap, although Hansard will seamlessly slide through the process, unlike the rest of us.
I was trying to respond to my hon. Friend’s suggestion that we need to revisit the definition of a micro-business, not least to make the policy more effective. This has largely revolved—in our previous discussions, including with other hon. Members—around whether we need to narrow that definition from 10 employees to fewer than five to target better the policies, as my hon. Friend highlighted.
I understand the point. I share the view that when we set policy, we need to ensure that it really addresses those people we are trying to help. It is also true that the Treasury will rightly want to ensure that when we are using taxpayers’ money, we direct financial support accurately at what they like to call leakage, which is a strange phrase but one that is understood in terms of the money being spent not necessarily reaching the people one is trying to support.
The definitions that we use are quite well established across Government and within the Office for National Statistics. As my hon. Friend also rightly said, those are clearly understood and are adopted on the basis of policy development in the EU as well. Without securing a change in definition across Whitehall and with the ONS and the EU, there is danger of confusion between different definitions when we develop policy.
Let me give some practical examples. At the moment, we are in the middle of discussions with EU partners about exemptions for micro-businesses from future regulations, to which my hon. Friend alluded. These are important. If we were to engage in a process, which would probably take a year or so to establish, according to which we might wish to define micro-businesses in a way that is different from the EU as a whole, clearly there would be a problem. It would be similar, in a sense, to our discussions with our EU partners over the next round of structural funds, which would start in 2014.
It is also true that we need to be careful about domestic policy and how that is applied. For example, my hon. Friend mentioned the micro-business moratorium, the moratorium from regulation, giving micro-businesses relief from the burden of additional changes in rules and red tape. We have secured significant reductions: the two that immediately leap to mind are, first, the postponement of the change in rules banning the display of tobacco products in shops, which is now only applicable to supermarkets, giving small businesses three years to consider how their business might be developed and, secondly, giving them the opportunity not to face those costs up front.
A similar case with a greater financial benefit to the smaller firms is the exemption that we secured, mentioned in part by my hon. Friend, on auto-enrolment for pensions. Again, that is a big saving for small businesses. Were we now to change the definition, there is a danger that there would be an immediate impact on firms employing between five and nine employees that are currently enjoying micro-business status.
I should like to highlight that, although there are benefits from considering whether the definition is accurate, our concern would be that there are obviously adverse consequences as well.
Anne Marie Morris
Does the Minister agree that it is crucial that we engage with the debate at European level about what those definitions should be, so that they work not just for other European member states, but for ourselves? Although I accept what he says, it is perfectly possible, without conflict, to have a UK definition that works within this ceiling umbrella, which the EU has created.
Mr Prisk
I think that that is true. My only concern would be that, as the policy is applied, if a business found itself defined as a micro-business in terms of one set of policies but not another, there is a danger of confusion in the very group that we are trying to help. I understand my hon. Friend’s point. We are not oblivious to the fact that, often, government of all forms probably thinks of small businesses as businesses employing 100 people, let alone ones employing three, four or five people, as we are discussing.
I shall deal with the definition, then I will get on to the practicalities in respect of what we are doing to help this important group. I am not seeking to dismiss the issue; I am trying to explain why the Government would be cautious about embarking on this path. I am happy—I have said it to my hon. Friend before, but am happy to put it on the record—to engage with her and the all-party parliamentary group to look precisely at how the definitions work, where the pinch points lie and how Government policy can best help this group.
My hon. Friend mentioned numerous important issues, and I will canter through them briefly in the few minutes that I have. The first is tax. I am grateful for her support for the changes that we have made, for example to small business rate relief. We have extended that holiday for smaller businesses for a further six months from October this year.
I understand the point about appeals. It is always a little challenging for a sole trader to take on the process. I trust and will ensure that my ministerial colleagues in the Department for Communities and Local Government consider that, and it is certainly high on our agenda.
Tax enforcement is always a sensitive issue. Clearly, it is principally a matter for my colleagues in the Treasury, but as the Minister with the privilege of responsibility for small businesses, I can say that we occasionally have a direct dialogue—he said carefully—with my Treasury colleagues and the tax and revenue authorities. They need to understand that ultimately, all of us, as public servants, are paid for by those same businesses, so the manner of enforcement is important. A careful distinction must be made between the real rogue and the person who has made the odd mistake on their VAT return late on a Sunday afternoon at the end of a working week. It is an important one.
I am also grateful to my hon. Friend for supporting what we have achieved on national insurance. She raised numerous other issues about tax, including fuel duty and the VAT threshold. Ironically, the VAT threshold—the cliff edge, as I think our hon. Friend the Member for Stafford (Jeremy Lefroy) called it—is, in a way, a cutback to the argument about how to define micros. We must be careful, but I welcome the points raised by my hon. Friend the Member for Newton Abbot. As I would like to remain the Minister with responsibility for business and enterprise, I will not pre-empt what the Chancellor might or might not say in his Budget in a few weeks’ time. However, those are good representations, and I am sure that the Treasury is listening.
Access to finance is an important issue. We have tried to think about micros. The enterprise finance guarantee was put in place specifically for those businesses without security to offer when seeking a loan, and it is very important for a micro-firm. Under the Merlin agreement, lending to small businesses increased in the past year over the previous year. Perhaps it might not achieve the full 15%, but we have yet to see the final figures.
Anne Marie Morris
Has my hon. Friend’s Department asked the banks to break down what sizes of business are benefiting from the schemes, so that he can see how many sole traders and mini-micros with fewer than five employees have benefited? That would be informative.
Mr Prisk
The Small Business Economic Forum regularly meets the small business organisations and the banks. We will ask it for that kind of breakdown, so that we can get a better understanding of the scale of micro, small and medium. It is important.
I agree with my hon. Friend that some of those proposals do not necessarily reach the smallest businesses. That is why we have supported the community development finance institutions. Working through the regional growth fund, we have put together a package in response to an application, so that some £30 million of taxpayers’ money can unlock something like £60 million of lending. The money involved is very often the several thousands of pounds that a micro-business needs to make the difference between a good idea that becomes a profitable venture, and a good idea that remains just a good idea. It is an important area and very often it is an area where, frankly, retail banking struggles to justify the work involved to deal with such loans, and CDFIs are well placed to fill that gap.
In finance terms, the business angels are a crucial part of this equation. When we think of micros, we tend to focus simply on the type of lending—whether that is loans, credit cards or whatever—that the smallest of enterprises engage in. But I am a strong believer that, alongside the larger venture capital funds, we need to ensure that business angels are encouraged. That is why we have put together a co-investment fund of £50 million, to start to grow that market substantially.
Anne Marie Morris
That is a great idea, Minister; my challenge is to get that communicated. Can we ensure that the local enterprise partnerships have a role in that communication, because the money is there but nobody knows about it? The new website—the “Business In You” website—has 851 of these schemes listed, and it is fantastic, but it is not something that is easy for someone to work their way around.
Mark Pritchard
Indeed. It is not too difficult, on the basis that I can work my way around it, so it is fair to say that it is not too challenging. Nevertheless, I understand the point that my hon. Friend is making and, yes, communication is important. That is the purpose of the campaign that has been announced by the Prime Minister.
To conclude, we very much welcome this debate. It has been a useful opportunity—albeit one that has been slightly interrupted—to address the questions of what we mean by micros and how can we best help them. As a Government, we are determined to provide the support that micros need and I am confident that in the years ahead the UK will remain one of the best places in which to start, invest and grow a business.
Question put and agreed to.
Written Ministerial Statements
(12 years, 3 months ago)
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Brazil and the Caribbean (Foreign Secretary Visit)
(12 years, 3 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to update the House on my first official visit to Latin America and the Caribbean as Secretary of State for Foreign and Commonwealth Affairs.
In November 2010 I set out in my Canning House lecture the Government’s commitment to reinvigorating important relationships in Latin America. I am pleased to confirm that the Government are turning this vision into concrete results. Last year, 27 Ministers visited Latin America of which 14 visited Brazil. We have reopened our embassy in El Salvador and a new consulate in Recife and we are sending additional diplomats to the region to staff these new missions. As a major emerging political and economic power, Brazil’s role in the world is set to grow. We also want to develop a better understanding between Britain and Brazil in foreign policy. Brazil’s role in international affairs is set to grow significantly this century. This flows naturally from their growing economic weight and the shifting international landscape.
Britain has much of the expertise that Brazil needs as it continues its growth—including financial services, sustainable development, the energy sector, defence, security and sports infrastructure. During my visit I held a strategic dialogue with Foreign Minister Patriota—an upgraded mechanism for foreign policy and bilateral discussions between the two countries, reflecting the new momentum in the relationship. I also explored options for further bilateral defence and security co-operation with Defence Minister, Celso Amorim and the Head of the Brazilian Navy, Admiral Moura Neto. Britain and Brazil have a unique opportunity this decade to further bilateral relations through sport, as adjacent hosts of the Olympic and Paralympic games. My meeting with the Governor of Rio de Janeiro reinforced UK/Brazil political and commercial co-operation on the Olympics and the security issues related to these major sporting events. I also announced the launch of the Great Campaign in Brazil which will take place in March 2012 and HRH Prince Harry’s visit at that time.
In a short visit to Panama on 20 January I met the President, First Lady, Foreign Minister and other member of the Panamanian Cabinet. We discussed Falkland Island issues, co-operation on combating money laundering and the possibility of a double taxation agreement with the UK.
In the Caribbean, I attended the UK/Caribbean ministerial forum, leading the strongest delegation of UK Ministers—the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), the Minister of State, Department for International Development, my right hon. Friend the Member for Rutland and Melton (Mr Duncan) and the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire)—and senior officials to visit the Caribbean in recent years. The forum brought together members of the Caribbean Community (CARICOM) and the Dominican Republic, with the Caribbean Overseas Territories and Cuba, USA, Canada and Australia participating as observers. Together we committed to a revitalised partnership, with stronger co-operation on areas that matter to both Britain and the Caribbean: trade, counter-narcotics, climate change, and key foreign policy issues. In recognition of the private sector’s role as an engine of growth, a broad range of British and Caribbean businesses also participated in the forum. The forum underlined the value we attach to our enduring friendship with the Caribbean and our desire to re-energise the relationship, creating a more modern, dynamic and forward looking affiliation.
The forum concluded with agreement to a new strategic economic partnership, promoting prosperity and economic resilience among the countries of the Caribbean and the United Kingdom. There was also agreement to enhance collaboration and co-ordination in the fight against illegal drug trafficking between the Caribbean, Britain and the Overseas Territories. This will include a new partnership between the UK, US and the Caribbean to develop land-based intelligence sharing and interdiction capability in the region. We also agreed on the importance of working together on further criminal justice reform which provides the essential underpinning for our drugs and crime work in the region. On climate change, we agreed to work together with urgency and vigour to close the ambition gap on emissions, to mobilise climate finance on the necessary scale, and to secure agreement by 2015 on a comprehensive legally binding global framework. Together we will continue to build on the alliance that emerged at COP17 between the members of the Alliance of Small Island States, Least Developed Countries and the EU. Finally, we agreed to work together in international forums, tackling pressing security issues facing the international community and working to strengthen the Commonwealth as a focus for democracy, human rights, development and prosperity. We also agreed a text in the Caribbean action plan to support the principle and right to self-determination for the Falkland Islanders.
It is this Government’s intention to shape a distinctive foreign policy that protects and promotes our national interests, strengthens our economy, makes the most of the opportunities of the 21st century and upholds the highest values of our society. This visit is part of how we achieve that, and represents a step change in British—Latin American and Caribbean relations. I will also lay in the Library of the House a copy of my speech in Brazil and agreed text from the Caribbean forum on the Falkland Islands.
NHS Property Services
(12 years, 3 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I am announcing today our intention to create a Government-owned limited company, “NHS Property Services Ltd”. The company will take ownership of and manage that part of the existing primary care trust estate that will not transfer to national health service community care providers under the plans for healthcare reform set out in the Health and Social Care Bill.
This follows on from the announcement on 4 August 2011 that aspirant community foundation trusts, other NHS trusts, and foundation trusts are to be given the opportunity to acquire part(s) of the primary care trust (PCT) estate deemed “service critical clinical infrastructure”. A copy of the relevant guidance, “PCT Estate: future ownership and management of estate in the ownership of primary care trusts in England”, has previously been placed in the Library.
NHS Property Services Ltd will be wholly owned by the Department of Health. The arrangements for it will be finalised in the coming months, however its objectives will be to:
hold property for use by community and primary care services, including for use by social enterprises;
deliver value for money property services;
cut costs of administering the estate by consolidating the management of over 150 estates;
deliver and develop cost-effective property solutions for community health services; and
dispose of property surplus to NHS requirements.
Properties to be transferred to NHS Property Services Ltd will include some operational estate, estate with multiple occupiers, office and administration estate, estate to be occupied by social enterprises and surplus estate.
Estate that is clearly linked to the provision of clinical services and mainly occupied by NHS providers for that purpose will be transferred to them.
Existing contractual arrangements with service providers that deliver and maintain NHS properties will remain in place to support the needs of this property portfolio.
Charging Heavy Goods Vehicles
(12 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Transport (Mike Penning)
The Department for Transport has today launched a consultation on a proposed road user charging scheme for heavy goods vehicles (HGVs) of 12 tonnes and over. This is one of the commitments in the coalition programme for government.
The proposal’s primary objective is to ensure fairer arrangements for UK hauliers. UK-registered HGVs already pay tolls or user charges on motorways and, frequently, other roads in most EU member states. Save on some specific pieces of infrastructure (the M6 toll and various bridges and tunnels), there are no tolls or user charges in the UK. As most foreign operators currently purchase their HGVs’ fuel outside the UK, they therefore contribute nothing towards the cost of our roads.
A scheme for HGV road user charging cannot discriminate between UK-registered vehicles and vehicles registered elsewhere in the EU. It will therefore apply to both UK and foreign-registered HGVs. It must also comply with the Eurovignette directive (Directive 1999/62/EC as amended by 2006/3 8/EC and 2011/76/EU) which sets out a framework of rules for tolls and charges, including maximum daily rates for the latter.
We propose a simple time-based charge, applying to the use of any road in the United Kingdom, meaning that a five-axle HGV of 38 tonnes or more would pay £1,000 a year or £10 a day. The Eurovignette directive’s maximum permitted charge is currently €11 per day, although by the introduction of the charge this is likely to have been uprated by inflation to €12 (about £10 at current exchange rates). The precise level of charges will depend on exchange rate movements and inflation between now and the implementation date later this Parliament. UK hauliers would pay an annual (or six months) charge for each HGV at the same time and in the same transaction as they pay its vehicle excise duty (VED). This would avoid extra administration costs for UK business. Foreign hauliers could pay daily, weekly, monthly or annual charges.
As VED and the charge are paid 12 months in advance, UK hauliers would begin to pay the user charge as they renewed an HGV’s VED from 11 months before the introduction of charging for foreign vehicles.
The Government will also come forward with measures to offset the additional user charges for UK hauliers, through reductions in taxes, duties or charges they currently face, or through appropriate spending measures. The Chancellor has discretion over tax and spending measures, but the most likely balancing measure in practice will be a reduction in VED towards minimum EU-levels.
The overall cost burden will not increase for the vast majority of UK-registered vehicles. We believe that, if we reduce VED to levels at or just above the minimum rates set out in the Eurovignette directive, around 94% of the current UK vehicle fleet would be no worse off, with 98% paying no more than £50 a year extra.
Non-payment of the user charge would be a criminal offence, which could result in a fine imposed by the courts. The user charge would be enforced by DVLA records, ANPR cameras and checks by the Vehicle and Operator Services Agency (VOSA) at the roadside. VOSA would also be able to issue fixed penalties on the spot to non-compliant drivers (and take financial deposits from drivers based outside the UK).
We are consulting on whether the scheme as a whole should be implemented, as well as on the details of the proposed charging bands, how the scheme will be administered, payment methods, enforcement and support for UK hauliers.
The consultation will run until 18 April 2012. The consultation document and associated tax impact assessment are available in the Library of the House, or on the DFT website at: www.dft.gov.uk.
Automatic Enrolment Timetable
(12 years, 3 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
On 28 November 2011, the Government announced that the timetable for the implementation of automatic enrolment will be adjusted so that small businesses are not affected by the reforms during this Parliament. This will provide them with some additional breathing space to prepare for the reforms while operating in tough economic times.
We also reaffirmed our commitment that automatic enrolment will start on time, from October 2012, and will apply to all employers.
I can now confirm that under the revised timeline, all employers with an existing staging date of on or before 1 February 2014 are unaffected. This means that no large employer will have to make any changes to their plans—which are in many cases already advanced.
Medium-sized employers will be reallocated automatic enrolment dates between 1 April 2014 and 1 April 2015. This means that the implementation dates of some of these employers will be up to nine months later. However, this still means that around 70% of eligible workers will be automatically enrolled before the end of this Parliament compared with around 75% under previous arrangements.
Small employers will be allocated automatic enrolment dates between 1 June 2015 and 1 April 2017.
New employers setting up business from 1 April 2012 and up to and including 30 September 2017 will have automatic enrolment dates between, and including, 1 May 2017 and 1 February 2018. Any new employer setting up from 1 October 2017 onwards will be required to comply immediately if paying earnings which attract PAYE deductions in respect of any worker.
We propose to delay from 1 October 2016 to 1 October 2017 the increase in the minimum rate of employer pension contributions from 1% to 2% of banded earnings. Contributions will increase to 3% from 1 October 2018.
We plan to publish a consultation document on the detail of these changes shortly. Draft regulations and an impact assessment will be published alongside the consultation document.
The table below sets out the revised automatic enrolment dates for all employer sizes.
From (inc.) | To (inc.) | |
|---|---|---|
250 or more members | 1st October 2012 | 1st February 2014 |
50 to 249 members | 1st April 2014 | 1st April 2015 |
Test tranche for less than 30 members | 1st June 2015 | 30th June 2015 |
30 to 49 members | 1st August 2015 | 1st October 2015 |
Less than 30 members | 1st January 2016 | 1st April 2017 |
Employers without PAYE schemes | 1st April 2017 | - |
New employers Apr 2012 to Mar 2013 | 1st May 2017 | - |
New employers Apr 2013 to Mar 2014 | 1st July 2017 | - |
New employers Apr 2014 to Mar 2015 | 1st August 2017 | - |
New employers Apr 2015 to Dec 2015 | 1st October 2017 | - |
New employers Jan 2016 to Sep 2016 | 1st November 2017 | - |
New employers Oct 2016 to Jun 2017 | 1st January 2018 | - |
New employers Jul 2017 to Sep 2017 | 1st February 2018 | - |
New employers Oct 2017 | Immediate duty | - |
House of Lords
(12 years, 3 months ago)
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Employment: Sickness Absence
(12 years, 3 months ago)
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the Independent Review of Sickness Absence by Dame Carol Black and David Frost has provided a valuable contribution to the evidence base about the issues facing individuals, employers, healthcare professionals and the state. The Government will carefully examine the findings and respond later this year. Given the complexity of the issues raised and the work needed to consider the recommendations, it is too early to speculate on whether and how individual recommendations may be implemented.
Lord Luce
My Lords, I welcome the Minister’s response. Does he agree that the report is full of recommendations that are designed to help those who suffer from long-term diseases such as chronic pain to get back to work or indeed to stay in their jobs? Since sickness absence costs the economy something like £15 billion in output and £13 billion in health-related benefits, does he agree that the early implementation of these recommendations would do a great deal to boost both the quality of life of a large number of people and the economy?
Lord Freud
Yes, my Lords. This initiative, which I am proud to have commissioned and sponsored, is really very important for improving the quality of life for a lot of people. With this review we are talking about a way of intervening much earlier so that we stop people start falling out of the labour market. The present system allows them to drift on for months, if not years.
Lord Harrison
My Lords, does the Minister agree that there is a connection between a healthy economy and a good health service? Given that back problems are the most important reason for sickness absence, early intervention by physiotherapy services is important for those who fall foul of that problem. Will he ensure that we have a service for physiotherapists that is able to match the need in order to return people to healthy work as soon as possible?
Lord Freud
My Lords, one of the reasons why this is quite a challenging report that implies quite a lot of work is that we need to reshape the provision for people. I shall give your Lordships a statistic that I find truly shocking. We have one occupational health professional in this country for every 34,000 people. In the Netherlands, there is one for every 4,000 people. That just shows how far we have to go to get provision for people in that position.
Lord Kirkwood of Kirkhope
Does my noble friend agree that general practitioners have a critical role to play in the health-at-work policy area? Is it too early to say whether there has been any flow-through from the recent introduction of the fit note certification process on absence rates? Will he give sympathetic consideration to the idea in this very welcome report that we should have an independent assessment service? That would be of signal assistance to general practitioners, who are trying to persuade their own patients that it is often in their own interests to go back to the world of work earlier rather than later.
Lord Freud
Yes, my Lords. The recommendations in the report were very supportive of maintaining the GP’s role. The independent assessment service could be a supplement to that, which a lot of GPs would find very welcome in helping to get people back into the workplace.
Lord McKenzie of Luton
My Lords, if we are going to prevent people becoming ill at work and accidents at work, should we not do more to promote and applaud the health and safety system that we have in the UK? Would the Minister have a word with his right honourable friend the Prime Minister to ask him to stop making ill informed comments that undermine the system?
Lord Freud
My Lords, in practice there has been a lot of emphasis on the safety aspects of work and too little on health in work. One of the things that we are trying to encourage is the ramping up of health support, both in work and as people fall out of work. That is why this set of recommendations is so interesting.
Lord Brooke of Alverthorpe
I welcome the report and the update that the Minister has given us on the process for its implementation. He mentioned early interventions in this context, and in the debates on Monday he spoke frequently about the need for early interventions with certain families to try to get them on the right track. That is a lot of additional work coming the way of the Civil Service. Is he confident that his department has the resources to address these issues adequately? Can he say whether his department will increase or diminish in size between now and 5 April?
Lord Freud
My Lords, the department has an enormous workload; I am absolutely conscious of that. It is driving through one of the biggest social changes that this country has seen for many decades. At the same time, we are decreasing the numbers in the department at the centre. That does not mean that it is happening at Jobcentre Plus, which is the client-facing area. We are confident that the department, which I have now been in for some time and genuinely find admirable, is able to fulfil these objectives.
Baroness Masham of Ilton
My Lords, does the Minister agree that it is sometimes easier for GPs just to write a sick note, rather than find the real cause; and that this is very difficult for employers?
Lord Freud
One of the things that the sickness absence review did was to look at the mismatch in what people were trying to do. The worst of the mismatches was that GPs were signing people off on their sick notes because they could not do a particular job, while the work capability assessment later looked at whether they could do any job. It is those mismatches that we need to stop and sort out.
Lord Campbell-Savours
I suffer from ankylosing spondylitis, which the noble Lord will know is a long-term disease. Does he have any provisional views on the recommendations in the report on physiotherapy services?
Lord Freud
My Lords, I think I tried to deal with this a little earlier. There is inadequate support across a whole range of occupational health therapies, including physiotherapy. We are taking our time to do this properly, but one of the important implications is the question of what provision is needed for people who are of working age and in danger of going out of the workforce. We seem to have far too little provision generally, and we will probably need to bulk it up.
Aviation: Passenger Duty
(12 years, 3 months ago)
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Lord Palmer
To ask Her Majesty’s Government why the air passenger duty on private jets will not be implemented until 2013.
Lord De Mauley
My Lords, from April 2013 air passenger duty will for the first time cover passengers travelling aboard private or business jet flights. The changes will bring a substantial number of new operators into the regime and will require the introduction of special rules, tailored to business aviation. Given that the sector comprises many small operators, the Government decided to implement the change from 2013 in order to ensure that burdens both for HMRC and industry were minimised and that the system functions effectively.
Lord Palmer
I thank the noble Lord for that reply. Can he categorically confirm that every single private jet will in fact be liable for APD after 2013?
Lord Trefgarne
My Lords, can the noble Lord tell me how far down the scale this tax will go? For example, if I still had a little two-seater, would I be liable?
Lord De Mauley
My noble friend will be very pleased to hear that his two-seater, provided it is propelled by a propeller, will be exempt.
Lord Morris of Handsworth
My Lords, in light of the Question on the Order Paper, do the Government now accept that the air passenger duty was falsely promoted as a positive measure towards mitigating climate change? Is it not just a Robin Hood tax in reverse whereby the Government take from poor families in the Caribbean, as we heard earlier this week, and give to bankers through subsidising their private jets?
Lord De Mauley
My Lords, that is quite a question. The Caribbean issue was addressed extensively when my noble friend Lord Sassoon answered questions on Monday. As regards whether it is a tax dressed up as an environmental duty, broadly speaking I agree with the noble Lord. It is a revenue-raising duty which makes an important contribution to the public finances.
Baroness Benjamin
My Lords, BA has cut scheduled flights to the Caribbean. Travel agents that serve the region are feeling the pinch as fewer people are travelling, meaning a loss of APD revenue to the Treasury. However, last week the Foreign Secretary, William Hague, stated at the UK Caribbean Forum that the Government had not closed the door on further discussions with regard to APD. That is most encouraging, especially to the UK Caribbean diaspora who feel betrayed. However, in the mean time, will my noble friend tell the House what plans the Government have to provide economic support to the Caribbean now that many livelihoods are threatened by the unfair banding of APD?
Lord De Mauley
My Lords, I recognise the importance that my noble friend places on this issue. As I said, the question of the Caribbean was addressed extensively by my noble friend earlier this week. I have nothing to add at the moment but as soon as I do, I will bring my noble friend up to date.
Lord Berkeley
Is not this air passenger duty a way for the Government to levy an environmental charge on the carbon discharged by airlines? Does the noble Lord agree that this is fair given that airlines get tax-free fuel whereas all motorists and truck drivers have to pay a large duty?
Lord De Mauley
I have said that it is a tax. I am not prepared to go further than that.
Lord Mawhinney
My Lords, given my noble friend’s answer to the noble Lord, Lord Morris, and that this duty will not come in until 2013, does that not give the Government the opportunity comprehensively to review the whole issue of this duty and perhaps to come up with a tax in its place which promotes UK growth, is less damaging to the competitiveness of UK carriers and is explained in a way that moves away from relying on an essential environmental message, which, frankly, few now believe, to some explanation for the tax that is more credible?
Lord De Mauley
My Lords, we have recently gone through a full consultation exercise on this. In answer to my noble friend’s question about the effect on the economy, the Government’s top priority remains to tackle the fiscal deficit. That means that these APD revenues must be maintained for the foreseeable future. The Government believe that the aviation sector should continue to make a fair contribution to the public finances.
Lord Davies of Oldham
My Lords, both the noble Lord today and the Minister on Monday made it absolutely clear that this tax is about revenue-raising. Why, therefore, has he indicated this concession for private jets, while the tourism industry, particularly in relation to the Caribbean, is being affected adversely? Why are the Government not consistent in their approach to industry?
Lord De Mauley
My Lords, I am speechless that the noble Lord opposite, who was an esteemed member of the previous Government who did nothing about the taxing of business jets for 13 years, should raise the issue at all.
Lord Swinfen
My Lords, will passengers who are taken up for a jaunt, and who take off and land at the same airfield without stopping elsewhere, still be liable for this duty?
Lord De Mauley
My Lords, I am struggling to think of a situation where that might be practicable, but I think the answer must be yes.
Armed Forces : Legal Representation
(12 years, 3 months ago)
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Lord Trefgarne
To ask Her Majesty’s Government whether they propose to pay the legal costs of the Territorial Army soldier who has been interviewed under caution in relation to an incident in Afghanistan in the summer of 2010.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, it would be inappropriate for me to comment on a case currently being considered by the independent Director of Service Prosecutions, but legal aid is available for all personnel, including reservists, who are subject to service law or service discipline at the time of an alleged offence, through the Armed Forces Criminal Legal Aid Authority. The scheme is based on the same principles as civilian criminal legal aid in England and Wales and is designed to mirror it, while making necessary adjustments for service life.
Lord Trefgarne
My Lords, I readily accept that it would be quite wrong to comment on any particular case that may or may not come before the courts, but is it not right that the Ministry of Defence—as, in effect, the employer of soldiers, sailors and airmen—should cover their proper legal costs when the need arises, and not leave them to the vagaries of the legal aid system?
Lord Astor of Hever
My Lords, as my noble friend said, I will not be able to respond to specific questions on this case; the department must protect the personal data of our employees, and I do not wish to prejudice any possible future disciplinary or administrative action. However, I can say that the MoD will pay for the defence of an individual charged with an offence that is committed in the course of their duties and while acting in accordance with any applicable regulations or direction. However, where someone may have fallen short of the high standards we expect of our personnel, it must be investigated and, if appropriate, proceed to trial. In this situation, legal aid funding will provide representation according to the charge and the defence case, engaging counsel if and when appropriate. All legal representatives used by the Armed Forces Criminal Legal Aid Authority are civilian solicitors or barristers registered with the Law Society or the Bar Council. By funding appropriate legal representation, we are confident that the Armed Forces legal aid scheme well serves individuals subject to the service justice system.
Lord Thomas of Gresford
My Lords, as chairman of the Association of Military Court Advocates I wonder whether my noble friend will accept that, as the results have shown, there are many skilled lawyers who will appear for the defence in the most serious cases involving the military?
Lord Astor of Hever
My Lords, I absolutely agree with every word that my noble friend said.
Lord West of Spithead
My Lords, I am sure that the noble Lord will agree that we are very lucky in this country to have some amazing men and women volunteering and serving as reservists. However, is it not a huge risk to assume that reservists can fulfil on a very large scale the tasks that are done by regulars? With the current reduction in Regular Forces and increased reliance on reservists, this will be a major problem militarily.
Lord Astor of Hever
My Lords, we are not assuming that they will fulfil the role of the Regular Forces. That is not the case at all.
Lord Burnett
My Lords, can my noble friend reassure the House about the independence of this process? Who conducts the investigations, and who makes the decision on whether to prosecute?
Lord Astor of Hever
My Lords, each of the services has its own service police who derive their powers from the Armed Forces Act 2006 and are independent of Ministers and the chain of command for the purposes of investigations. In the case of the Army, the Royal Military Police special investigation branch conducts investigations. Decisions on what charges should be faced by any soldier are taken by the independent Service Prosecuting Authority, which is under the general superintendence of the Attorney-General. Neither Ministry of Defence Ministers nor the chain of command play any part in such decisions.
The Lord Bishop of Exeter
My Lords, does the Minister agree that when a member of our Armed Forces is asked to revisit traumatic events in which they were involved in the course of a tour of duty and which may lead to legal action, they are often in need not only of legal support but of pastoral and counselling support? What is his degree of satisfaction that such levels of support are readily available to them?
Lord Astor of Hever
My Lords, I can assure the right reverend Prelate that a great deal of support is given to reservists both while they are serving and after they have left their operational tour.
Niger
(12 years, 3 months ago)
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Baroness Kinnock of Holyhead
To ask Her Majesty’s Government, in the light of the Save the Children and Oxfam report on the crisis in east Africa and the call for early responses to warning signs, what they will do to ensure a similar crisis is averted in Niger.
Baroness Northover
My Lords, the Government are very concerned about the emerging crisis in Niger and have been monitoring the situation closely. The Secretary of State for International Development has announced emergency support to mitigate the impact of the crisis. This will reach 68,000 children in Niger, Chad and Mali and provide livestock support to 30,000 families.
Baroness Kinnock of Holyhead
My Lords, I thank the noble Baroness for her response. The warning signs of looming disaster were there in the Horn of Africa two years ago, but no action was taken and tens of thousands of Somalis starved to death and millions of people in east Africa were affected. Against that background, will the Government give active endorsement to the UN-supported charter to end extreme poverty, which identifies five specific actions that must be taken when we know that a crisis is predicted and preventable? We can and must stop the drought in west Africa and the Sahel turning into a famine. We must say never again and mean it.
Baroness Northover
The noble Baroness is right that we must say never again and mean it, but I dispute that the Department for International Development was not leading on the response in the Horn of Africa. Credit has been given to the UK Government for that. The report from Oxfam and Save the Children to which her Question refers is extremely welcome. It indeed emphasises that the intention is to manage the risk, not the crisis. That is absolutely the right way to go about it: to intervene early and build resilience. That is why the Department for International Development did that in the Horn of Africa and is doing that across the Sahel.
Lord Chidgey
My Lords, is my noble friend aware that in the report, A Dangerous Delay, which has just been issued, Oxfam states that many of its messages chime well with the humanitarian emergency response review chaired by my noble friend Lord Ashdown? Focusing on anticipation of and resilience to natural disasters, what measures have been put in place to co-ordinate cross-departmental and cross-agency efforts through the stabilisation unit and other means?
Baroness Northover
The noble Lord is right that the humanitarian emergency response review made some extremely important recommendations for the anticipation of disasters and building resilience to them. That is being taken forward at the moment. DfID is in the process of developing a humanitarian framework for Africa and a Sahel resilience strategy which will help the UK anticipate and respond strategically to crises across the continent. The building stability overseas unit normally focuses on resilience against conflict issues rather than natural disasters. Nevertheless, the two feed on each other, so there is action that that unit can take as well.
Lord Alton of Liverpool
My Lords, has the Minister seen the reports this week that Boko Haram, the radical Islamist group in Nigeria, has been responsible for a large number of people escaping from the violence there into neighbouring areas in Niger, and that this is both leading to an exodus of refugees, compounding the existing problems in Niger, and preventing food being transported from Nigeria into Niger? Did she see the warning from the European Union earlier this week from Kristalina Georgieva, the commissioner for human aid, that it is a race against time to safeguard the lives of the 5.5 million people who are currently at risk?
Baroness Northover
The noble Lord is right to flag up the problems in the area generally. Indeed, the knock-on effects from the problems in Nigeria are having an effect. So, too, are the returning mercenaries from Libya who instead of sending back remittances now need to be supported in that area. My right honourable friend the Secretary of State today spoke to the Commissioner about the situation in the area and the EU has just doubled its contribution. We are acutely aware of the difficulties of working in this area as it is very unstable.
Lord Richard
Can the noble Baroness give us a figure on what the British contribution has been so far and what she intends it to be in the future?
Baroness Northover
The United Kingdom has just contributed £2 million to this directly in response. It is worth bearing in mind that the United Kingdom is also a major contributor to the UN Central Emergency Response Fund which has just put in £7.9 million, of which £1.9 million was from the United Kingdom. The European Commission contribution, as I have just mentioned, has doubled in the past few days to £105 million and we contribute 17 per cent of that. Maybe the noble Lord would like to do some of the maths. For historic reasons, the French are the leading country in this area, and DfID staff are in France right now seeking to gear up the response.
The Lord Bishop of Liverpool
My Lords, according to the World Health Organisation 40 per cent of the healthcare in Africa is delivered through the churches. Can the Minister say whether the Department for International Development will be working through the churches as part of its response to these crises?
Baroness Northover
The right reverend Prelate is right that the churches are very active in the region and DfID is working with a number of organisations. This is a region where, generally speaking, it is not possible to channel money directly through Governments. Therefore, a number of other organisations are the routes to support in the area.
Lord Boateng
In the light of the Minister’s very helpful answers to previous questions, will she consider how she might co-operate with her colleagues in the Ministry of Defence and the Foreign and Commonwealth Office in seeing how we can better support the African Union and ECOWAS in terms of their peacekeeping or conflict resolution capacity in view of the deteriorating situation in the Sahel involving the Tuareg?
Baroness Northover
The noble Lord is right. In terms of co-operation, the FCO, the MoD and DfID are working very closely together. My noble friend made reference to the building stability overseas unit, which is, as it were, a concrete example of that working together. The support for the African Union is very strong and will continue to be so.
Baroness Tonge
My Lords, some of us may be old enough to remember that in times of plenty the Pharaohs used to build up stores of excess supplies to use in times of famine. I wonder whether the international community has made any progress in pre-empting these crises by making sure that there are stores in strategic parts of the world that are likely to suffer famine in advance of the famine occurring.
Baroness Northover
The World Food Programme and UNICEF are indeed already stockpiling supplies and a lot of work is going into how best to ensure that these crises do not occur. The Question from the noble Baroness, Lady Kinnock, was all about how to pre-empt such crises and develop resilience in an area where already the population is exceptionally vulnerable. A lot of the problems are because of rising food prices rather than necessarily food scarcity. The noble Baroness’s point is well taken.
The Earl of Sandwich
Will the Minister join me in commending BBC correspondent Mike Wooldridge and his colleagues for outstanding coverage of the famine in West Africa? One point that he made, which the noble Baroness mentioned, was that food prices had risen 40 per cent in a single year, out of reach of the local population. What is DfID doing for longer-term sustainability? The noble Baroness mentioned cattle; perhaps she would comment on agriculture as a whole.
Baroness Northover
I am very happy to commend the BBC and its journalists for their brave coverage in these very unstable areas. DfID supports the Comprehensive Africa Agriculture Development Programme, a pilot programme from the World Bank on climate resilience, which is extremely important here, and a global facility for disaster risk reduction. It is also important to emphasise DfID’s support for social protection programmes, and for cash transfers where appropriate, to try to build up these vulnerable communities so that they will be more resilient in circumstances such as this.
Lord Skelmersdale
My Lords, that is all very well, but will the noble Baroness tell me what is being done to extract and preserve water, on which all agriculture and horticulture depend?
Smoke-free Private Vehicles Bill [HL]
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text
Local Digital Television Programme Services Order 2012
(12 years, 3 months ago)
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Lord Strathclyde
That the draft orders and regulations be referred to a Grand Committee.
Joint Committee on Privacy and Injunctions
(12 years, 3 months ago)
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Lord Strathclyde
That notwithstanding the resolution of this House of 27 June 2011, it be an instruction to the Joint Committee on Privacy and Injunctions that it should report by 15 March 2012.
European Union (Definition of Treaties) (Republic of Korea Framework Agreement) Order 2012
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the draft order laid before the House on 5 December 2011 be approved.
Relevant document: 36th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 January.
Immigration (Biometric Registration) (Amendment) Regulations 2012
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Earl Attlee
That the draft regulations and rules laid before the House on 6, 14 and 15 December 2011 be approved.
Relevant documents: 36th and 37th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 23 January.
Welfare Reform Bill
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:11 - Division on Amendment 62BJA - Ayes: 216 / Noes: 256 - Amendment 62BJA disagreed.
19:12 - Division on Amendment 62C - Ayes: 270 / Noes: 128 - Amendment 62C agreed.
Baroness Hollins
“71ZJ Non-recoverable overpayments
The Secretary of State may not recover any amount of any benefits paid in error by officials when the claimants could not reasonably be expected to know they where being overpaid.””
Baroness Hollins
My Lords, the House will wish to know, in connection with this amendment, that I am an appointee for my disabled son's benefits.
The amendment is designed to maintain the legislative position that prevents the state recovering overpayments where the mistake is entirely the fault of officials and where the claimant could not reasonably have been expected to realise that they were being overpaid. This protection has been on the statute book for over three decades, yet it stands to be removed by this Bill. This is of great concern to churches and charities that understand the impact of sudden, unexpected and, in many cases, unaffordable debt.
During Grand Committee, the noble Baroness, Lady Lister, emphasised the importance of this protection remaining enshrined in primary legislation rather than being in a code of practice. Unfortunately, despite the Minister’s assurances that the Government's draft code of practice, What happens if you are overpaid Universal Credit, Jobseeker's Allowance or Employment and Support Allowance, would,
“lead to considered, consistent decision making”,—[Official Report, 23/11/11; cols. GC 467-68.]
it appears incomplete and worryingly inadequate to protect claimants. Nor is there any duty in the Bill requiring officials to comply with the code of practice. Those representing welfare claimants against whom an overpayment recovery is being enforced could prevent costly litigation if they could point to a statutory duty to follow procedure, but the statutory duty is not there.
The opening section of the code of practice encourages claimants to check their award notices and to inform the relevant authority if anything is wrong, missing or incomplete, but even the most incisive individuals may face real difficulties in identifying whether officials have made an error or an omission—perhaps especially the 20 per cent of adults who are estimated to struggle with literacy or numeracy. The principle of expecting those in receipt of benefits to check their notices is, of course, neither new nor unreasonable in itself, but under the proposed changes the consequences of failing to recognise the state’s mistakes will become excessively severe. Will the Minister clarify what extra support people will be provided with in analysing their award notices, particularly in cases where they face barriers in literacy or numeracy or where English is their second language?
The second area of concern I wish to raise relates to the section in the code of practice “If you disagree with the overpayment decision”. Claimants are instructed that they have a period of one month from the day that an overpayment notice is dated in which they may challenge it. This may seem an adequate time on paper, but it takes no account of the reality facing many people at home. Let us take a single mother of four young children who is attending a college course to improve her chance of getting a job receiving an overpayment notification and being threatened with her benefits being stopped. She is balancing an education with raising a young family, and one month in which to challenge the decision would not be long at all. If you add literacy problems, waiting times for advice services and even time lost through postage, there is a very realistic prospect that claimants simply will not be able to respond in time. Will the Minister reconsider what appears to be an inadequate time limit? Will he also outline what provisions will be put in place for those who do not respond within the prescribed time because of any matter out of their control, such as hospitalisation?
In the section of the code “Paying back an overpayment”, claimants are informed that overpayments may be recovered through deductions from their benefits, direct debit, another regular payment method, a lump sum or through the courts. Crucially, it does not mention that an overpayment may be recovered through deductions from earnings, as outlined in the Bill, nor is there any mention of the additional administrative costs that could be imposed in such cases, an aspect that has been of particular concern to organisations such as the Zacchaeus 2000 Trust, which works on the front line with vulnerable debtors. Will the Minister clarify why these powers are not outlined in the code of practice and confirm that they will be conveyed in full to those in receipt of benefits so that those facing the recovery of overpayments in such a manner can fully understand the process and the implications?
Suitable safeguards must be put in place to ensure that the burden of official errors does not fall upon some of the poorest and most vulnerable people in our society. Profound anxiety has been expressed by a number of faith groups, including the five major Christian denominations that are backing this amendment. Noble Lords may have seen a recent letter to the Times by the Roman Catholic Archbishop of Southwark, who underscored these concerns.
Baroness Hollis of Heigham
My Lords, we should be grateful to the noble Baroness, Lady Hollins, for raising this issue, which comes at a point at which existing recipients of benefit may be experiencing real pressure. I hope that the Minister will be able to illuminate more fully than he has so far the Government’s intentions in this field. We are exceedingly grateful to the noble Baroness.
I think we all accept that one of the big problems with our current benefits system, which I strongly hope and believe universal credit will help to rectify, is that the complexity of benefits—the fact that they overlap and there is no simple, clear or obvious way of ensuring the appropriate entitlement—has been a great cause of error by both officials and claimants, and of fraud. These are built into the system in the present way in which it is organised. One of the reasons why I welcome universal credit is that the simplicity of a single benefit—with its clarity, its monthly paper trail and so on—should, I hope, allow us to overcome some of those difficulties.
Overpayments will still happen, and there must be a presumption, as with banks, that if there has been an overpayment one should seek to recover it because it properly belongs to the taxpayer. However, many benefit claimants cannot afford it and that should be one consideration; it may in that case properly be wiped out. Secondly, the benefit claimant may be under great stress, perhaps suffering from terminal illness or caring for someone with terminal illness, which has been overlooked and it is not now possible for them to repay; or the claimant may be in a mire of debts, including for utilities or rent, and if one sought to have a speedy recovery of any overpayment one could end up leaving that claimant homeless.
I am happy to leave it to the discretion of the local offices as to whether any overpayment should be pursued, deferred or patterned slowly for repayment, only if the Minister can give us full assurances about how that discretion will be used wisely and decently. Perhaps we could, in conjunction with the relevant voluntary organisations, go over the code of practice again in the light of its need to be clarified, given universal credit, and ensure that that code of practice has a statutory basis and that, if local decision-makers do not follow it, that would be a basis for appeal to a tribunal.
As I have said, I believe that if someone can afford to repay an overpayment and it is reasonable and decent to seek to get that repayment, we should do so, but for many people on benefits that will not be the case. It would be very helpful if the Minister could explain exactly how he will ensure that local discretion is exercised wisely and decently.
Lord Bichard
I support this amendment as someone who used to be responsible for delivering the benefits system. When I was in that position, I remember railing against the complexity of the system and am therefore delighted that we are doing something about that. I also railed against the complexity of some of the bureaucratic communications that were sent out. Since I am now more often on the receiving end of those kinds of communications, I fear that my railing had little impact because they are still excessively complicated and I find it quite difficult to understand some of the letters that I receive.
It is placing a very heavy burden on benefit recipients to expect them to understand fully all the communications that they receive and therefore fully to appreciate sometimes when an overpayment has been made. For those of us who had an overpayment of, say, an occupational pension that we have to repay, irritating though it is, we can probably afford to do that over a period of time. It is a very different issue for a benefit recipient to repay a large sum of money in their circumstances. Therefore, I support the amendment. It is really important to get some clarification of the situation as we move forward.
Baroness Hayter of Kentish Town
My Lords, it seems that the HMRC’s position on tax credits is to say, “If we fail to meet our responsibilities but you meet all yours, we won’t ask you to pay back all of an overpayment caused by our failure”. That is quite a strong statement of their side of the bargain and recognition of an error made by HMRC. Its own code of practice and guidance sets out the limitations of payments where a claimant is experiencing hardship and the circumstances in which an overpayment will be written off.
Given that we will now have a new and unfamiliar system of universal credit, once it is clear both that there has been an official error and that the recipient could not possibly have known about it, if all those overpayments were to be clawed back in those circumstances the officials would have precious little incentive to get the system right, despite the hardship that that could later cost claimants who, through no fault of their own, were overpaid.
In Committee, the noble Lord, Lord Freud, said:
“Although the starting point for overpayment recoverability will be that almost all overpayments of working-age benefits … will be recoverable … DWP will consider a claimant’s means, income or expenditure if the debtor”—
I do not like that word because it suggests that the claimant in some way invited this—
“considers that they are in hardship”.
However, that means that repayment is essentially means-tested in that the DWP will have the discretion to write off an overpayment based, in the Minister’s words, “on their individual merits”.
The Minister promised the Committee that the DWP,
“will ensure that deductions from benefit or earnings to repay an overpayment should not lead a debtor”—
a claimant—
“to suffer undue hardship”.—[Official Report, 23/11/11; col. GC 468.]
However, it seems to me that this has two problems. First, it is discretionary and possibly means-tested but without anyone knowing the rules. HMRC’s draft code, which was sent to us in December, as the noble Baroness, Lady Hollins, has said, says only that it might decide in exceptional circumstances not to seek recovery of an overpayment or part of it and that there are no prescribed circumstances for a discretionary write-off, although it hints that it would do so only in cases of immediate significant family hardship or a threat to their health, and emphasises that hardship is taken to be “other than financial hardship”.
Secondly, the code relies on claimants knowing that they can appeal against a required repayment without having been informed about that. The draft leaflet really does not make it very clear, nor does it explain how to appeal. If I have understood it correctly, it says only that you can consider the amount that is being asked for, but not the fact that you have to pay it because of your own circumstances. The Minister said in Committee,
“that if the debtor considers they are in hardship, they can say that and then there is a process built on that”,—[Official Report, 23/11/11; col. GC 469.]
but it is not clear how that would work. If this amendment falls and the system proceeds, will the Minister assure us, first, that anyone asked to repay to cover for official error will be told of their right to appeal; secondly, that they will be given rather more guidance than that given in the draft leaflet as to the circumstances in which any write-off will be allowed; and, thirdly, where the repayment is sought from landlords, which in certain cases it would be, that they will also have the right of appeal against a loss of income over which they will have no control?
The Minister knows that the IT problems caused significant headaches and hardship for many claimants in the early days of tax credits. Getting the position right on overpayments and ensuring that claimants do not feel that they have been unjustly made to pay for the errors of government officials will be essential to building confidence in universal credit. We look forward to the Minister’s response to these and the other queries raised, and emphasise that this amendment is about the consequences of official error, not of claimant mistakes.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, as we have previously discussed, Clause 103 is based on the premise that for those benefits within its scope, most if not all overpayments will be recoverable. I think we are all in agreement that a benefit recipient should not receive any more money than they are due; nor should they receive any less. In keeping with this general principle, we believe that a benefit recipient should not be allowed to keep money that they should not have received and that this should hold true even if they were not aware of the mistake. I do not think that we can accurately compare the issue of tax credit overpayments, raised by the noble Baroness, Lady Hayter, with that of benefit overpayments. That is because awards of tax credit are based on an estimate of what someone will earn, whereas benefit entitlement is based on actual information—and of course it will not have escaped anyone’s notice that the level of tax credit debt has grown significantly.
As we have discussed before, although the provision allows for all overpayments to be recoverable, this does not necessarily mean that overpayments will be recovered in all circumstances. We will endeavour to recover all overpayments where we are able to do so and where it is reasonable to do so without causing undue hardship. This remains a cornerstone of our overpayment recovery policy. The code of practice, a draft version of which has been distributed to noble Lords, will provide guidance about the circumstances in which recovery action will or will not be taken. It is intended that the code of practice will be available to the public in leaflet form and online. This will ensure that the decision-making process is transparent and that the right decisions are made about the recovery of overpayments. Where a claimant wishes to challenge a decision, they may exercise their right of appeal against it.
To pick up on the point made by the noble Baroness, Lady Hollins, on what compels decision-makers to apply the code of practice, the application will form part of the decision-making process, and failure to adhere to it would leave the DWP open to challenge and appeal on the decision itself or, indeed, judicial review for failure to apply good practice. While there may be no legal duty to comply, failure to do so renders the department more open to successful appeal by the claimants. So we have every incentive to adhere to the code of practice.
Baroness Hollis of Heigham
My Lords, the Minister reminded the House that the current maximum weekly repayment for overpayments is some £10 a week. Will he assure the House that when a local decision-maker decides on the pattern of repayments that may be appropriate, one of the key factors to be taken into account is any other debts and debt repayments that that person may have? Under the old social security system the rule was that no more than 10 per cent of a benefit income should be top-sliced to repay debts for utilities, the Social Fund and the like. Can we have that assurance? Otherwise someone could find themselves trying to repay housing, fuel and pay check debts, and now overpayment debts. Each claim may seem reasonable, but the total may plunge the benefit recipient into total desperation.
Lord Freud
My Lords, I think I can give that assurance on the basis that we are looking at financial hardship as the key criterion. Clearly the benefit recipient’s other debts form part of that consideration, so they will clearly be considered.
Baroness Hollis of Heigham
Does the Minister think it reasonable that no more than 10 per cent of total benefit income should go towards the repayment of any or all other debts.
Lord Freud
My Lords, I am not sure that I am in a position to give assurance on precise figures and percentages. I am giving a general assurance that that factor will be looked at as part of the financial hardship consideration.
Baroness Hollins
My Lords, I thank the Minister for his detailed and careful reply, which contained a number of reassurances. Many of the reforms proposed in the Bill are primarily about changing behaviour rather than reducing expenditure. On the issue of overpayments, it is difficult to argue that the changes to the procedures for repayment fall into the former category. The primary motivations, I understand, are ones of principle and finance.
Until we can be sure that when things go wrong the individual judgment of officials does not subject claimants who have been overpaid to undue punishments, we need clear safeguards. The Minister has tried to reassure the House that those safeguards will be in place. I am reassured by his comments that recovery will not cause hardship and by his reminding us that the DWP would be open to challenge or to judicial review. With great power comes great responsibility, and many Members may believe, like me, that when the DWP alone is at fault the DWP alone should take the hit, and that this ought to be clear in legislation.
However, I am reassured by the Minister’s comments and I beg leave to withdraw the amendment.
Lord Ramsbotham
“Guidelines to be followed by officials of jobcentres and local authorities when imposing sanctions, penalties or overpayments
(1) The Secretary of State shall issue guidelines applying to claimants which must, when imposing sanctions or penalties, be followed by officials of jobcentres and local authorities.
(2) When drafting the guidelines referred to in subsection (1) the Secretary of State will have regard to guidelines issued by the Sentencing Council covering the determination of fines.
(3) Officials of jobcentres and local authorities shall take into account all the relevant factors and circumstances of welfare claimants before deciding to impose any sanction or any penalty and before deciding to recover any overpayment.
(4) It shall be the duty of the decision makers in jobcentres or local authorities to give reasons for any decision in any case where any sanction or penalty is imposed upon a welfare claimant and where any decision is made that an overpayment is recoverable.”
Lord Ramsbotham
My Lords, Amendment 62A is in many ways complementary to Amendment 62ZC, which we have just debated.
The purpose of the amendment is to try to ensure that the standard of evidence required of officials in local authorities or jobcentres when imposing civil penalties and recovering overpayments should be the same as that required in the courts when imposing fines and enforcing debts. I set out at length my reasoning for the amendment to the Grand Committee and I do not propose to repeat that now.
In Grand Committee I was grateful to the noble and learned Lord, Lord Mackay of Clashfern, who helpfully suggested that, as tabled, the amendment was too prescriptive. The Minister, while agreeing that it was right and proper that decision-makers gave full consideration to all the relevant facts provided by a claimant, who should also have the right of appeal, suggested that adequate protections were already in place. However, he also agreed to meet those who had drafted the amendment to go through the issues in detail. That meeting has taken place, for which all who attended—I hope that I am speaking for the noble Lords, Lord McKenzie of Luton and Lord Kirkwood, as well as myself—were extremely grateful.
Before that meeting I tabled the amendment in its current form. It proposes that, to better ensure the original intention, the guidelines recently published by the Sentencing Guidelines Council, chaired by Lord Justice Leveson, should be followed. At the conclusion of the meeting the Minister said that he wanted to work with those attending the meeting, whom he recognised as being concerned about vulnerable people, to get the guidance right and compliant with the Wednesbury principles on reasonableness.
The Minister also said that he would look again at the current guidance with the reworded amendment and see whether adjustment was appropriate, not least because of the similarity with the decision-making required, on the one hand, of the courts when imposing fines and enforcing debts, and, on the other, by officials in local authorities and jobcentres in raising civil penalties and recovering overpayments. I hope that the consistency resulting from what I propose will encourage the Minister to accept at least the spirit of the amendment. I note with interest what he said about the code of practice. I am sure that that is the way in which the guidance should be got to officials. I would welcome his reassurance that the guidelines about which this amendment speaks have been included in the working of that code of practice. I look forward to his response. I beg to move.
Baroness Hayter of Kentish Town
My Lords, on behalf of my noble friend Lord McKenzie, I also thank the Minister and the noble Lord, Lord Ramsbotham, for that meeting. I know that he found it of considerable interest and use. The noble Lord, Lord Ramsbotham, of course knows rather a lot about penalties, sanctions and their fairness. His amendment seeks to ensure that the appropriate guidelines and procedures are in place when a jobcentre or local authority imposes sanctions, fines or penalties on claimants, and particularly that, when officials impose such penalties, they give clear reasons for doing so.
Clarity about circumstances in which a penalty, sanction or overpayment can be recovered is vital if administrative justice is to be realised but also to enable claimants to have confidence in the system. It obviously also makes the job of officials considerably easier when there is a clear set of steps to follow and a clear description of the circumstances in which they should consider possible hardship to a claimant. It is also essential that the reasons for any sanction or repayment are set out, preferably in writing, so that the claimant, any adviser or a reviewer can understand the grounds on which the decision was taken. We look forward to the Minister giving us assurances that a set of guidelines, safeguards and relevant procedures will be in place so as to meet the aspirations set out in the amendment.
Lord Freud
My Lords, I need to start by thanking the noble Lord, Lord Ramsbotham, for arranging a really useful seminar the other week on a range of issues related to sanctions and penalties. I was equally impressed by the content of that seminar, the iron discipline with which it was conducted and how much ground we managed to cover. We are very keen to draw on the expertise of others as we develop our implementation plans. I look forward to continuing to work with interested groups in this collaborative manner. I gave a commitment in that meeting that we would work collaboratively with the groups involved. I am pleased to repeat formally here that that collaboration will happen.
Turning to the substance of the amendment, I hope I have made clear that we are really on the same page on many of these issues. We absolutely agree that clear guidance should be issued to officials making decisions on behalf of the Secretary of State where discretion is exercised. We do this now and will continue to do it under universal credit. Decision-makers will be required to follow this guidance when applying the law to the facts of the case where they consider a decision about a claim, sanctions for non-compliance with work-related requirements, a civil penalty or the recovery of overpayment. As is currently the case, we will make this guidance publicly available.
Lord Ramsbotham
My Lords, I am very grateful to the Minister not just for those remarks but also for the seminar which he mentioned, where I know that his willingness to listen and what he said was hugely appreciated by the stakeholders. I am very glad that he mentioned the future collaboration because I know that it will also be appreciated by them. What this exercise has shown—the Grand Committee, the seminar and now today—is that it is essential to maintain a dialogue between the stakeholders on the ground and the people responsible to make certain that, if anything is going wrong or there are ideas for making improvements, that should be fed in to the people responsible rather than having to go through a tortuous process.
I am very grateful to the Minister for all that. Out of this exercise, the code of practice that goes down to the officials can only be the better. With that, I beg leave to withdraw the amendment.
Lord Freud
Lord Freud
My Lords, Clause 129 enables relevant information to be shared between DWP, local authorities and others for prescribed purposes relating to the operation and administration of welfare services and social security benefits. As thinking has developed in relation to new data-sharing arrangements, it has become apparent that we may want to supply social security benefit information to local authorities in connection with the administration of localised council tax schemes. These amendments will enable that, and will allow local authorities to share such information between and within themselves for the purposes prescribed. Making social security information available in this way will help local authorities design and deliver schemes that provide appropriate financial support to residents who are unable to meet the full cost of their council tax. I beg to move.
Lord Newton of Braintree
My Lords, I just want one penn’orth. I completely support these amendments, but they give me the opportunity which I missed earlier in these proceedings to record on the Floor of the House that the single silliest thing in this whole affair is the determination of the Department for Communities and Local Government to have separate council tax benefit systems in every corner of the country. That is a battle to be fought again on another day. I had devised an amendment that could have brought it up today, but I decided that discretion was the better part of valour at this stage. However, there is a local government finance Bill coming down the path. My noble friend—and, above all, his noble friends in the DCLG—should know that some of us are going to go on worrying away at this total absurdity, which I know is not supported in the DWP itself. These amendments may help to mitigate the effects but they will not completely eliminate them, and I shall go on trying to eliminate them.
Lord McKenzie of Luton
My Lords, I concur completely with what the noble Lord, Lord Newton, has just said. We obviously will not oppose these amendments, but that should not be taken to mean that we are supportive of this proposition. When I say that I concur completely, I am not saying I am sure that this is the single silliest thing in this Bill—but it is certainly in the top 10. The briefing note that we had makes it clear that the support for council tax in future is likely to be based on a system of means-tested discounts. How on earth that can sit sensibly with universal credit and single tapers is a mystery to me. Maybe we will be enlightened when we get that legislation, which I think will come our way quite shortly. We could have a long debate around this today, as it is a real flaw in the universal credit, but I accept the need for this amendment, as it makes the data-sharing coherent.
Lord Wigley
My Lords, may I have one word of clarification about the interplay between these provisions on council tax and how they play with the devolved authorities? There are provisions lower down, on page 100, relating to the National Assembly for Wales, but this brings in a new dimension in that local government in Wales comes under the Assembly as well. Is there agreement with the Assembly Ministers on the provisions which the Minister is putting into the Bill by way of these amendments?
Lord Freud
Yes, my Lords, I can confirm that we have agreements with the devolved Administrations on this matter. They will be receiving the information in slightly different ways, but we have sorted that out. On that basis, I will avoid the temptation to indulge in a long discussion about DCLG and council tax. Although I know that noble Lords would enjoy that, we have other things to do.
Lord Freud
““council tax” includes any local tax to fund local authority expenditure;”
“Information sharing in relation to the Social Fund
Before sharing information regarding eligibility for services under section 69(3) of this Act, the Secretary of State shall satisfy himself that the Local Authority is intending to deliver these services in accordance with the purposes set out in the settlement letter that accompanies any payments made from the Consolidated Fund under section 69 and that arrangements have been made to report on the use of these payments.”
Baroness Lister of Burtersett
My Lords, this amendment has the support of the noble Lords, Lord Kirkwood of Kirkhope and Lord Blair of Boughton, to whom I am grateful. The noble Lord, Lord Blair, asked me to say that he is lecturing in Oxford and, if he is unable to reach the House in time, to assure your Lordships that he means no discourtesy by his absence. He also asked me to remind the House that he has spoken twice in support of the Social Fund earlier on Report, seeking the Government’s commitment to require councils to preserve this money and account for its spend on the objects of the Social Fund. I know that the noble Lord, Lord Kirkwood, is chairing a committee of the House and I am hoping that, like the cavalry, he will come over the hill—or through the Bar—to my rescue. If not, though, his strong support for an amendment along these lines is on the record both in Committee and on Report.
I apologise for returning once more to the Social Fund, and I will not rehearse all the arguments again. The reason why I have tabled yet a further amendment is that I felt in our previous debate that Members of your Lordships’ House were disappointed with the Minister’s response to the concerns raised around the House—disappointed because the Minister clearly agrees with the central underlying objective of these amendments. As the noble Lord, Lord De Mauley, assured your Lordships’ House, we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people. Previously, the Minister said that it was quite clear that we need to ensure, if we are putting money out for vulnerable people, that it goes to vulnerable people and is not diverted elsewhere.
The money that we are talking about is that which is currently paid out in community care grants and crisis loans under the discretionary Social Fund to provide vital cash assistance at times of acute need. I note that in today’s Guardian the Minister, Steve Webb, writes:
“To say the social fund is set to be abolished is completely false”.
However, in response to a Written Question from Karen Buck MP on 5 May 2011, he stated:
“The Social Fund is not being devolved to local councils. The Welfare Reform Bill includes proposals to abolish the discretionary Social Fund”—[Official Report, Commons, 5/5/11; col. 898W]—
in other words, the part of the Social Fund that we are debating here today.
The vulnerable people to whom the Minister referred include women who have fled domestic violence, young people who have left care and people with chronic health conditions or disabilities who need help with household items in order to live independently in the community. Family Action, to which I am grateful for all its hard work on this issue, has provided noble Lords with a number of examples of the value of the Social Fund to people in such circumstances. I shall quote just one:
“Lisa was awarded a Community Care Grant after being forced to leave her furniture and most of her possessions behind when she fled a violent partner with her three sons. She lived in a refuge and then temporary accommodation. When she moved into permanent accommodation, she had hardly any belongings and no money to furnish the partially-furnished house. Lisa’s fear of being isolated and lonely in her unfurnished, unpainted room was exacerbating her mental health problems, making her unable to unpack any of the items from her move. She slept in the bed of her middle son and her social worker emphasised how important it was to furnish her room, so she could sleep alone and move towards an independent and organised life. Lisa was awarded a grant for a bed, bedding and drawers, which helped her feel more at home, gave her the emotional strength to start unpacking her boxes, and meant her and her middle son were able to sleep comfortably, alone. She said ‘I’ve been waiting for this flat for six-and-a-half years, and for once in my life I can call a place home for the first time. For once in my life, my kids and I have a home… I just want to get myself better’”.
Family Action says that thanks to this help,
“Lisa was able to start rebuilding her shattered confidence”.
The noble Lord, Lord De Mauley, tried to convince your Lordships’ House that the safeguards that he had offered in response to an earlier amendment would,
“ensure that the money intended for vulnerable people goes to vulnerable people”—[Official Report, 11/1/12; col. 215.]
But there are no real safeguards. There will simply be a detailed settlement letter—and I thank the noble Lord for clarifying the contents of it—a specific revenue grant, and a review of a cross-section of local authorities in 2014-15 to see how they have spent the money. While these are all welcome, they are not by any stretch of the imagination genuine safeguards. There is nothing to prevent hard-pressed local authorities spending the money on other pressing demands—and authorities admitted as much in their responses to a DWP survey. It could be to make up the shortfall from the money being devolved for council tax benefit or even, as the noble Lord, Lord Newton of Braintree—now officially crowned hero on this matter—suggested, be spent on a swimming pool. I note that the noble Lord, Lord Fowler, is now in his seat. The irony of my standing on this side of the House, defending the Social Fund, which I attacked when the noble Lords, Lord Fowler and Lord Newton, introduced it, is not lost on either of us.
Lord Newton of Braintree
My Lords, I can hope only that my noble friends on the Front Bench have already realised that Newton on Wednesday will not necessarily be the same as Newton on Monday. After Monday, I am amazed that the noble Baroness, Lady Lister, is still prepared to accord me hero status. I give her full credit for that. I do not know whether she regards me as adequate cavalry in substitute for the noble Lord, Lord Kirkwood, or, indeed, the noble Lord, Lord Blair, but here I am on my charger doing the best I can.
I indicated in the earlier debate that I was a heretical supporter of ring-fencing and that I did not want to see this Social Fund money frittered away on other things. All I am going to say now is that I agreed with every word that the noble Baroness said. I had better say straightforwardly to the Minister that if this amendment is pressed and we have not had what I regard as a satisfactory reply, I shall be strongly tempted to vote with the noble Baroness, should she press the matter. In saying this, I am linking it back with my earlier remarks. I have no doubt whatever that the obstacle here is not my noble friend—he cannot comment on this—but the DCLG. I do not think that the localism agenda should stand in the way of making sure that money spent for the purpose of these vulnerable people is spent on these vulnerable people. I therefore strongly support the thrust of the amendment.
Lord Skelmersdale
My Lords, the key to this amendment—I go a long way with my noble friend Lord Newton on what he has just said—is the settlement letter. What I think the House will need to know is what happens when the local government organisation in question does not abide by the settlement letter. On the answer to that, I suspect, will depend the decision of the noble Baroness on whether or not to call a Division.
Lord Fowler
My Lords, there is an amazing coincidence here. I remember back in 1985-86 being strongly opposed on the introduction of the Social Fund by someone with the same name as the noble Baroness, Lady Lister, who proposed this amendment. I have to say that she was not alone. It was one of the most controversial changes that we made at that time. We were strongly opposed by the welfare groups and the party opposite. From memory, we were strongly opposed by the noble Lord, Lord Kirkwood, as well—I do not think that he is in his place. Another group who strongly opposed us—I am not sure that even my noble friend knows this—comprised my social security successors at DHSS who also did not want to introduce the measure. They said that it was far too radical. They put it to a meeting held after the 1987 election and around the table at No. 10, with Margaret Thatcher in the chair, that it should be dropped. Happily, they were defeated. Now I see that 20 voluntary organisations have signed up to it being retained.
The Public and Commercial Services Union, with more than 80,000 members in the Department for Work and Pensions, also regrets its passing. Therefore, I hope that it will be of some comfort to the Minister when he is attacked from the other side that sometimes you find after 10 or 20 years that positions change, as has the attitude taken on this measure. It is not altogether surprising that I have a lot of sympathy with the view taken on the Social Fund. I think it is common ground that we need a system for dealing with emergency payments of one kind or another. I think it is also common ground that some of the 67,000 families who will be affected by the cap will need such help. I think that is common ground all round.
As regards the mechanism, I have to say that I still rather support the Social Fund. That is not surprising as my noble friend Lord Newton and I invented it in the first place. It did have, and does have, a number of advantages. The department has experience of how such a scheme works and has local offices with local knowledge which are, however, kept within a national programme with a national budget. Therefore, I should have thought that from the Government’s point of view as well as from the claimant’s point of view it had substantial advantages. There is a risk that different local authorities will pursue different policies with regard to it.
My view is slightly unlike that of my noble friend, to whom I pay the usual tribute. We worked together for a long time. I made the popular announcements and he did the unpopular ones. I see that he agrees with that. The Government have decided to go this particular way and, as I said on Monday, I do not intend to trample over my successors’ proposals. However, I give just one warning, which is the warning of the noble Baroness, Lady Lister, who knows so much. I pay tribute to her for all the work that she has done on social security over the years. If money is to be made available to local authorities for what I shall call Social Fund purposes, we must do everything that we can to ensure that that money reaches the proper destination—otherwise the exercise is all slightly pointless.
We have seen in the health service where this has not happened. Money intended by the previous Government for prevention of ill-health was siphoned off and used for other more general purposes. Whether my noble friend accepts this amendment —it seems unlikely that he will accept it—the House will wish to be assured that we have some way of checking that the money reaches its proper destination. That seems to me to be the crucial point and that is the assurance that the House seeks.
The Lord Bishop of Manchester
My Lords, it is clear that the nub of this issue is the accountability required to make sure that the Social Fund is used in the manner for which it is intended. I doubt that any noble Lord does not see the significance of that and it has been argued for eloquently and cogently by the noble Baroness, Lady Lister. My ears have suggested to me that there is a deep measure of agreement around the House on this issue. I hope that in his response the Minister will not only recognise that but give some clear way of assuring us that, if he is not going to accept the amendment, the Government have in mind a way forward that will match what the noble Baroness has most properly put before the House.
I again make a brief personal note. My late noble relative, who was a councillor for 17 years—the last Conservative councillor for Kilburn in history—had Welsh blood and a Welsh title. When seconding the Loyal Address during the 1970 Parliament in your Lordships' House, he told a story that I shall tell again to indicate that local authorities are not entirely sound on swimming pools. He described the inquest that was conducted in a Welsh borough where someone had drowned while using the municipal swimming pool. At the inquest, the coroner asked the swimming pool attendant in charge of the pool why he had not attempted to assist the lady who unfortunately was deceased. The attendant said in reply, “I can’t swim”. The coroner said, “But surely you were asked whether you could swim when you were interviewed to come and work in this role for the local authority”. The swimming pool attendant said, “I can’t swim. The only question I was asked at the interview was, ‘Are you bilingual?’”. On that note, I indicate that local government behaviour on swimming pools is not wholly reliable and that it was therefore prudent to raise this matter in the debate.
Lord German
My Lords, I should like to follow that because it is an interesting perspective. I come to this issue as one who has been an ardent devolutionist and as someone who believes in power being passed—obviously, in my case—to Wales and to local government. So, although I come with a different historical perspective, I understand the historical perspectives of the noble Lord, Lord Fowler, and the noble Baroness, Lady Lister, because I read all about it in an article that I am afraid I have lost. It quotes her at the front about how the money would be used in Wales.
I hope that for once the Minister can tell me the mechanism by which the money will be transferred to Wales and Scotland. I understand that it will be part of the local government settlement in England and in Wales part of the Barnett formula. If that is the case, we are transferring the power to deal with those matters to Wales and Scotland. Why should I not argue for that sense of purpose? I am arguing for it and am also arguing for local government to have responsibility. After all, would you expect the swimming pool attendant to have his case heard in London for a swimming pool somewhere in the valleys of Wales? Of course not. The people closest to this—colleagues and decision-makers—will know the local circumstances. This is only a very small part of the Social Fund that is being devolved.
There is accountability because there are elections for local government. Local government is held to account, and the Scottish Parliament and the Welsh Assembly are both held to account by their electors. Clearly, there is a role for those who are receiving the money to be accountable to their electorates. I cannot believe that if there is a purpose to deliver something locally it should not be passed on to local government. We do ourselves a disservice by not accepting that there is a democratic right for local government to exercise this ability. I say to the noble Baroness, Lady Lister, that where I live in my country, her party supports no ring-fencing whatever for local government. It trusts local government to make those decisions. That is a form of devolution that is the right way.
We have to consider what functions are being transferred, whether to Wales or local government. I know that the noble Lord, Lord Brooke, in his usual manner of creating an environment, is absolutely right. If these are very small decisions about loans to people with whom the local council will already be in contact, surely it is right to trust local government to do it. I know that local government in England is ready, willing and able to do the job, and I know that there is an opportunity for their electorates to hold them to account. Sometimes it is important to let go and have the decision-making closer to the people whom it most affects.
Baroness Hollis of Heigham
Perhaps I may challenge the noble Lord, Lord German. What he is saying is entirely applicable to Wales, where every local authority is a unitary authority and therefore has responsibility for both housing and social services and can read across, for example, from the help that will come from the discretionary housing allowance to the Social Fund. Often the same families need support in a crisis if, for example, a house has been flooded, has caught fire, or if someone is coming out of care, and so on. They will need both housing and social services help, and a unitary authority is rightly placed to give that, provided that it spends the money as it should.
However, the noble Lord has not mentioned that most local authorities in England do not want this because they are lower-tier authorities, and the social services which handle the Social Fund are upper-tier authorities. In the county of Norfolk, which is some 60 miles long and 40 miles wide, yellow lines are put on roads that you do not even drive down, and schools that you have never even visited are closed, which happened when I was a county councillor, because it was too large to be called local government. None the less, that social services authority will be determining the Social Fund for seven district councils, including one wholly urban authority, two semi-urban authorities and three or four rural authorities. As a result, there will be a postcode lottery within Norfolk because a county council of one political complexion will be dealing with half a dozen different authorities below it, responsible for housing and trying to manage the discretionary housing allowance at the same time.
We will therefore have two sets of officials, one at district level and one at county council level, dealing with the same vulnerable family, each of them focusing discretionary money with no mutual interlocking, decision-making or accountability. It is a bloody silly system that is being proposed and I hope that my noble friend presses the amendment to a vote and that, as a result, we give the other place a chance to think again.
Lord McKenzie of Luton
My Lords, we support the amendment moved with the great passion and inescapable logic which we have come to associate with my noble friend Lady Lister. I say to the noble Lord, Lord Newton, that I prefer the noble Lord of Wednesday to the one of Monday. As my noble friend said, this is light-touch and effectively cost-free, so we should not have the usual argument about what this would do to the deficit reduction programme. Most noble Lords, with the possible exception of the noble Lord, Lord German, were pretty much on the same page, as the right reverend Prelate the Bishop of Manchester said. To the noble Lord, Lord Fowler, I say that this is not about trying to roll back the decision and retain the Social Fund as it is; it is simply trying to ensure that the money allocated through this process will be spent as it was meant to be. I should have thought that, in these times of austerity, the Government would feel it particularly incumbent on them to ensure that.
The amendment is intended to build on the useful reassurances we had from the noble Lord, Lord De Mauley, at earlier stages in response to concerns we raised about the localisation of the discretionary Social Fund. Those concerns primarily centred on the lack of a ring fence for the money that is to be transferred to local authorities to allow them to provide services that replace those that the Social Fund currently provides to some of the most vulnerable people when they are facing a particularly difficult situation.
Those concerns about the lack of a ring fence were raised by more than 40 per cent of respondents to the Government consultation on reform of the Social Fund. They have been raised by a wide range of charities, including Scope, Crisis, and Family Action, which state that they are seriously concerned that the abolition of the discretionary Social Fund and its replacement with a patchwork of local arrangements will remove one of the final safety nets for some of the most vulnerable and needy members of society.
Those concerns are so acute because of the degree of vulnerability of those to whom the Social Fund community care grant scheme provides support. Thirty-two per cent of those receiving a community care grant in 2009 were disabled, 26 per cent were lone parents and 10 per cent were pensioners. Many women fleeing domestic violence see community care grants as a vital lifeline when setting up a new home on exit from a refuge. The fear is that, without some way to ensure that local authorities use the money for the purposes for which it has been allocated, the needs of those groups will go unmet and the money will be diverted to other purposes—a lesson we learnt the hard way, as my noble friend Lady Lister pointed out, when we were responsible for removing the ring fence for the supporting people grant when we were in government. Crisis points out that councils are, on average, cutting supporting people services by 13 per cent, despite the overall supporting people budget being cut by only 2.7 per cent.
Local authorities themselves are worried about that possibility. DWP research published in December 2011 into local authorities’ plans to replace the Social Fund found that a number of authorities were concerned that without a ring fence and some level of reporting, funding would quickly become amalgamated into existing budgets and that, as a result, its identity, visibility and purpose would be lost. A second concern was that councillors or directorate heads would redirect the funding to plug gaps in other budgets. The most common example mentioned was the social care budget.
The amendment would not place a ring fence around the funding, which the Minister argued would be restrictive. He also argued that the settlement letter which accompanies the transfer of moneys to the local authority will be sufficient to ensure that those funds are used for the purpose for which they are intended—the meeting of often urgent need. If this is the case and local authorities intend as a matter of course to use the funds for this purpose, there should be no barrier to the Minister accepting the amendment, which merely puts in place a checking mechanism to ensure that what he is confident will happen takes place. We support the amendment.
Lord De Mauley
My Lords, during the passage of the Bill there has been much discussion of the reform of the discretionary Social Fund, and how we can ensure that the money intended for vulnerable people goes to them—an aim with which, as the noble Baroness, Lady Lister, generously acknowledged, I am completely in agreement. However, imposing restrictions on local authorities through data sharing, as the amendment seeks to do, would take us a little away from the central issue of how best to ensure that the funding achieves its intended purpose.
The noble Baroness’s Amendment 62BJA would mean that the Secretary of State would have to ensure that he was satisfied that a local authority planned to use the funding, which will replace community care grants and crisis loans for general living expenses, for the purposes set out in the settlement letter, before he could share information with a local authority about eligibility for assistance under the new local provision. The Secretary of State would also have to be satisfied that arrangements had been made to report on the use of the funding.
I appreciate the noble Baroness's intentions in moving the amendment. Despite its drafting, and despite what the noble Lord, Lord McKenzie, said, I read it as another approach to the issue of ring-fencing the funding that will go to local authorities. Although I do not think that it will achieve that, I will say, as I said before, that a ring-fence is not the best way to ensure that the money reaches vulnerable people. Ring-fencing would mean that local authorities could be constrained, for example, from investing in existing services, or pooling the money with funding from pre-existing services to provide a comprehensive and effective support system for the most vulnerable people in their communities.
The Government fully agree that it is very important to have adequate controls in place to ensure that the funds are used in the way intended. We have clear agreement on that point. However, I will explain why the amendment is unnecessary. Other controls are in place to provide checks and balances before, accompanying and following the initial allocation under the new provision. Perhaps I have not been adequately clear about these so far.
First, I turn to the current element of the steps that we are taking—what I might call the “before” steps. Departmental officials have already conducted a great number of meetings and workshops with local authorities to support them in preparing to deliver the new local provision. We will continue with this support by holding a series of workshops with all upper-tier local authorities over the coming months. The workshops will consider in detail how transferred funds could be used to maximum effect from April 2013. Through the sharing of ideas and best practice, they will assist the development of new services and will help local authorities identify how the funds can be used to best effect to support the most vulnerable. The participants and outcomes of the workshops will be published on the DWP website as part of our ongoing package of advice and information for all local authorities.
The settlement letter—what I might call the “accompanying” step, because it will accompany the funding that local authorities receive for delivering the new provision—will set out, as we discussed at some length last week, what the funding is to be used for and the underlying principles, and will describe the outcome that must be achieved. On 17 January this year, having further considered our debate of the week before, I laid out exactly what the settlement letter would contain. My noble friend Lord German made the point that local people and communities can hold their local authorities to account. The detailed settlement letter will help them do that. Furthermore, as I explained, in order to underline its purpose the funding will be distributed to local authorities through a specific revenue grant rather than being included with the rest of their general expenditure in the main revenue support grant.
I shall move on to the “following” steps. Following the introduction of localised assistance, the department has already made plans to conduct a review in 2014-15 to obtain appropriate information from a representative cross-section of at least 50 local authorities, which represents one-third of the total, in order to help inform future funding levels. We have committed to using this opportunity to gather further information about the way in which local authorities have used the funding. I contend that this review will be more valuable than the information required under this amendment. It will tell us about how the provision is working and what the funding is being used for, whereas this amendment would require a judgment to be made about the intention of a local authority before it delivers the new scheme. In addition—and this is critical—as local authorities will not know in advance which of them will be involved in the review, the risk of scrutiny and exposure from the review work will also help to drive their behaviours and, in theory, they may otherwise have been tempted not to comply in full.
Turning to the amendment itself, I suggest that it would be unreasonably burdensome to expect the Secretary of State to make a case-by-case check on every local authority that requires information about eligibility from the Department for Work and Pensions. As I said a moment ago, we estimate it would be approximately 150 local authorities. Indeed, the amendment presumes that local authorities will approach the department about eligibility for their local schemes, but this may not happen in every case. It will be for each local authority to decide which vulnerable people in its area would most benefit from the new local provision. This is the point. This is about trusting local authorities. They are best placed to make these decisions, as they will already be working with vulnerable people in their area through the other services that they provide. This local knowledge will help them to decide how to tailor support, and they may not feel that they need to approach the department for any information in order to do this.
Even if the obligation contemplated by the amendment were necessary, which, as I have explained, we contend it is not, primary legislation would not be the place for it. Regulations under Clause 129 will prescribe the purposes for which the department can share benefit information with local authorities, and the agreements reached with local authorities will make clear that the information is to be supplied only if it is for a prescribed purpose—in this case, determining eligibility for the new local provision.
We are already working with local authorities to make sure that they are ready to deliver this support. The settlement letter will make explicit that the funding is to provide a replacement provision for community care grants and general living expenses crisis loans. It will be clear that the funding is meant for vulnerable people and about the outcomes that should be achieved. The review will offer a check on what local authorities have done with the funding they received and will provide accountability.
The noble Baroness, Lady Lister, asked why a light-touch reporting system cannot be set up. Local authorities will be using money in a variety of ways, all directed towards meeting the needs of vulnerable people. Any system, no matter how straightforward, would, by its very nature, have to be complex to capture and assimilate all the money and the varied information.
The noble Lord, Lord McKenzie, and other noble Lords raised Supporting People as a demonstration, in their eyes, of how non-ring-fencing produces a risk. The Supporting People funding was deliberately incorporated into the main formula grant in order to provide local authorities with maximum flexibility. Our funding will not be included in the overall grant. It will be part of a special revenue grant. In addition, we are working and will continue to work with local authorities before the funding is allocated to devise plans for using and targeting the money and, as I have said before, we will review over one-third of them to ensure that the money has been spent appropriately.
My noble friend Lord German, who must have no idea how grateful I am to him for his very helpful words, asked the important question about Wales and Scotland. The funding will not be transferred under the Barnett formula; it will be allocated through a special grant. The funding will be based on the equivalent Social Fund spend for 2012-13, and it should be noted that Scottish policy is also not to impose a ring-fence.
The noble Baroness, Lady Hollis, asked about the tension between upper-tier and lower-tier authorities. The funding is allocated to upper-tier local authorities in order to provide the greatest possible flexibility to local areas. From our discussions with local authorities, we know that a range of delivery models are being considered, some of which will result in some funding being devolved to lower-tier services such as housing. Decisions about the ultimate funding for each area will be determined by a range of local factors, including the location and nature of existing services, and how these align with areas of deprivation and need and the level of funding that will be devolved. In some less deprived areas it may not be necessary or practical to operate a number of services.
Local authorities have been enthusiastic and engaged with this process and I am confident that, given what I have said, they will continue to act in a responsible and fair way to protect the most vulnerable in their communities. I hope I have addressed the issues noble Lords have raised, and I ask the noble Baroness to withdraw her amendment.
Baroness Lister of Burtersett
My Lords, I am very grateful to all noble Lords who have spoken. I have to say, when I was calling for the cavalry, I had not expected its generals to be two former social security Secretaries, the noble Lords, Lord Newton and Lord Fowler. I am very grateful to them for what they have said. I particularly thank my new hero, the noble Lord, Lord Newton, for his strong words in favour of the amendment.
The noble Lord, Lord Skelmersdale, rightly said that the key is the settlement letter and what happens if a local authority does not abide by it. I do not know about the noble Lord, but I have not heard an answer to that question. In Committee, the noble Lord, Lord Kirkwood of Kirkhope, and I came to a great defence of the principle of the Social Fund. I would not say that we had been wrong at the time, but we accepted that the Social Fund had worked out better than we had expected. We all agree that it needed reforming. The problem is that reform is not the same as the partial abolition that is taking place now. I would still have preferred the old system of statutory single payments, but that is history and that is not what we are here to discuss.
I am very grateful to the right reverend Prelate the Bishop of Manchester for the point he made about accountability. It is interesting that the noble Lord, Lord German, made the same point in Committee, where I felt that he was not convinced that accountability would be achieved. I know a letter was written to him, and I was not convinced by that letter that accountability would be achieved. The noble Lord, Lord German, raised a question about the local electorate holding local authorities to account. The people for whom the Social Fund is so vital are the people who are least likely to vote in local elections and be on the electoral register. As much as I would like to think that other members of the community will put the interests of potential Social Fund users at the top of their concerns when voting, I am afraid that it is simply not going to happen. Local organisations should not have to prise the information out of local authorities to try to make them accountable at the ballot box.
Yes, we do trust local authorities. This amendment is not about bashing local authorities. This is not an amendment that says, “I do not trust local authorities”. However, local authorities are under huge pressure in terms of spending. We trusted them with the Supporting People grant, but, as I have said, they are making disproportionate cuts in it—not because they want to hurt vulnerable people but because it is easier to make cuts in the money that goes to marginalised groups than it is in, say, weekly bin collection.
I am very grateful to the Minister. I get the sense that his heart is not really in what he is saying today.
Baroness Lister of Burtersett
He has put up a very noble defence of the Government’s position. But the noble Lord, Lord Newton, put his finger on it. I did not like to say this myself as a member of the Opposition. The resistance to an amendment on these lines is not coming from the Department for Work and Pensions; it is coming from the Department for Communities and Local Government. As the noble Lord said, we should not allow the localism agenda to trump the needs of some of the most vulnerable people in our society.
I very much welcome the full and strong steps that the department is taking to try to engage local authorities in seminars and so forth. That is all very valuable. But ultimately there will be no come-back if local authorities do not use the money for the purposes voted for by Parliament.
I have listened carefully to noble Lords on three or four occasions and each time we inch a little further towards where we are trying to get. But on none of these occasions have I been satisfied that we will achieve genuine accountability and that any mechanisms are in place to ensure that the money voted for vulnerable people will be spent on them. As my noble friend Lord McKenzie said, at a time when we are all being told about public spending being under such pressure, surely it is that much more important that the money is spent on the purposes for which it is intended.
Given that nearly everyone who has spoken has spoken in favour of the amendment and that I do not feel that the Minister has addressed questions put by his own side of the House, I wish to test the opinion of the House.
Lord De Mauley
Lord De Mauley
My Lords, Tell Us Once is a cross-government programme developed so that people should be required to inform the Government only once of a change of circumstances, such as birth or death. Government Amendment 62BK allows the Registrar-General, superintendent registrars and registrars of births and deaths to transmit information from a birth declaration, as well as information entered in a birth register which is already covered by Clause 133, to the Secretary of State and to verify such information for the Secretary of State.
Birth declarations in England and Wales account for approximately 10 per cent of registrations. The impact can be considerably higher in certain local authorities where the location of the hospital where most births take place falls within a neighbouring borough. In some areas the local authority will be unable to provide the service to up to 80 per cent of customers unless the customer makes two separate visits to the local authority—one to make a declaration of the birth and another when they have received the birth certificate to use the Tell Us Once service.
To ensure that all new parents are able to access the service and to avoid the need for them to inform several government organisations separately of a birth at what is often a busy time for families, I ask noble Lords to accept the amendment.
Lord McKenzie of Luton
My Lords, I understand the amendment is to overcome a lack of vires on behalf of the Registrar-General in respect of birth declarations, and we are happy to support it.
Lord De Mauley
“(b) in particular, before accepting an application under those sections, invite the applicant to consider with the Commission whether it is possible to make such an agreement.”
Lord De Mauley
My Lords, I shall speak also to government Amendments 62BM and 62CA. In doing so, I wish to put these amendments in the context of the reforms they relate to.
The Government are committed to supporting lone parents. We spend over £6.5 billion on income-related benefits for some of the poorest lone parents alone. Significant financial support is also offered through the tax credit system and child benefit. Our reforms to child maintenance build on this support that the Government already provide directly to lone parents. Our key aim when reforming child maintenance is to ensure that both parents take responsibility. That includes taking responsibility for paying maintenance and for making the right choices about maintenance. This should be seen in the context of our wider ambition to make it the norm that parents work together in the interests of their children, especially when they no longer live together.
Every family is different and the child maintenance system in Great Britain should reflect this. The truth is that the statutory scheme cannot be so detailed and individualised as to be able to deal with every possible circumstance. For too long, parents have been implicitly or explicitly told that the Child Support Agency is the default option. That approach has entrenched conflict and led to an overreliance on the Government providing enforcement action.
The CSA-based system has failed, with the statutory schemes costing around £450 million each year. That could be seen against funding for relationship support for separating parents of £30 million over four years. Furthermore, taxpayers support costs of up to £25,000 for some typical CSA cases and up to £40,000 where we need to take substantial enforcement action. That is money spent by the state chasing maintenance from one parent to give to another. This has led to a system where, overall, it costs about 40p to move £1 between parents. The system must change because it is not working properly for parents or children. It does not represent value for money for the taxpayer.
The reformed system of child maintenance will be based on the principle that collaboration between parents is best for children. We firmly believe that collaborative child maintenance agreements are longer lasting and parents are more likely to be happy with them. Furthermore, we know wider collaboration between parents is clearly associated with better outcomes for children.
I hope that noble Lords will also acknowledge that we cannot be overly simplistic as to where fault lies when it comes to problems establishing maintenance arrangements. In reality, one-third of parents in the CSA identified that they had a friendly relationship with their ex-partners and said there was frequent contact by non-resident parents with their children. Furthermore, these parents reported that their maintenance arrangements were not really a source of tension. The CSA said that it was fairly easy for these parents to discuss financial matters. Our reforms also reflect the fact that over 50 per cent of parents using the CSA told us that, with the right support, they were likely to be able to make a collaborative agreement. Groups working with parents also tell us this. Karen Woodall, director of the Centre for Separated Families, said that,
“the campaign around the proposed changes to the child maintenance system has been largely based on outdated stereotypes around parental behaviour. By offering support to both parents and to the wider family, we believe that the changes will bring about much better outcomes for children”.
However, it is surely not the state’s role to intervene and arbitrate in personal relationships between two adults. Instead we wish to support parents to make an informed decision. That was always the intention of the gateway we provide for under Clause 134. It has become apparent that Clause 134 as drafted, referring to reasonable steps, has been interpreted more stringently than we intended. We do not wish to require parents to take multiple steps determined by us before being able to make an application. That would risk establishing a new quasi-judicial function. It would require us to decide whether a parent had taken reasonable steps and is an impediment to making a collaborative agreement. This would be akin to the complex and intrusive bureaucracy that dogged the early days of the CSA. That is the antithesis of our approach and why we have brought forward Amendments 62BL and 62BM. I hope this clarifies our intentions.
The amendments make clear that our role is to inform the parent approaching us and invite them to consider whether they can make a collaborative arrangement outside the state scheme. This will normally take place when the parent telephones to discuss their options. Where parents wish to pursue it, we will direct them towards wider sources of support. To further make sure support is available for parents, we have announced today £20 million of additional funding. This will be spent working with voluntary and community groups on streamlining existing support and looking at what additional help is needed. This amounts to doubling government spending on relationship support in 2012-13. I hope that, on that basis, noble Lords will be prepared to support Amendments 62BL and 62BM.
Organisations as diverse as the Centre for Separated Families, Families Need Fathers and Relate have all welcomed this announcement. Sarah Caulkin, interim chief executive of Relate, has said that her organisation hopes that,
“this funding will not only allow parents to access support before problems become serious, but also enable as many parents as possible to make their own arrangements to become effective co-parents, which in turn will benefit the whole family”.
I can confirm to the House that this is indeed the Government’s ambition.
These reforms to support parents in collaborating are coupled with reforms to the state-run CSA system. Perhaps I should make it clear that under our reforms the system will still continue to be heavily state-subsidised. However, we want the state-run system to be smaller, enabling us to free up these resources to help separating families who really need that help.
We absolutely recognise that some parents will need to continue to use the state-run service, and we need to do better for them as well. Our starting point for reform is the review by Sir David Henshaw, which was commissioned by the last Government in 2006. The key reform is based around a new scheme recommended by Sir David to replace the Child Support Agency scheme. At the heart of the new scheme will be tough enforcement and collection measures when parents fail to pay maintenance. The Government have developed new processes for identifying those who might not pay and addressing non-payment when it first occurs. The new scheme will also ensure that non-resident parents cannot escape their true responsibilities by refusing to provide us with details on their income. Instead, we will generally access this information from HMRC, which will enable a smoother and faster flow of maintenance to parents with care.
The Government are also committed to ensuring that the most vulnerable parents continue to benefit fully from child maintenance. To this end, we are ensuring that child maintenance payments remain tax-free. In addition, we will guarantee that parents keep all the maintenance, even when they are on universal credit. When money is in payment, child maintenance averages around £32 per week, tax-free, under the CSA. This is a significant financial benefit to the most vulnerable mothers.
Sir David Henshaw also recommended that,
“charging is introduced for users of the administrative system”.
He went on to say that charging would,
“contribute to the objectives of the new system by incentivising private arrangements which can be more successful”.
We agree with Sir David’s findings. The then Secretary of State—now the noble Lord, Lord Hutton—told the Work and Pensions Select Committee at the time of the report that he thought that,
“in general and in principle”,
charging should form part and parcel of the commission’s approach. Subsequently, the then Government took a wide-ranging power to charge as part of the Child Maintenance and Other Payments Act 2008. It is Amendment 62C to that Act from my noble and learned friend Lord Mackay that we will deal with in the next debate. Let me not prejudge that debate, but I shall say something on the principle of charging before flagging an amendment that we propose to make to our powers.
As I said earlier, the Government cannot fairly and should not try to apportion blame between parents. Therefore we firmly believe that, to reform the system and maximise the number of effective child maintenance arrangements, we need to have an affordable but clear financial incentive on both parents to collaborate. With such high numbers of parents who use the CSA saying that it is likely they could collaborate, an affordable financial incentive for both parents is a necessity. The application charge and collection charges proposed by the Government meet these criteria. However, noble Lords will remember that when an application is made and maintenance payments are subsequently made directly, no collection charges are applied. This is the option to pay that is often called often called maintenance direct and is dealt with under Clause 135.
The Government are convinced this approach to charging is the right one and wish to formalise a requirement for us to review based on an evaluation. This would be achieved through Amendment 62CA. We will review charging within 30 months of its introduction. Thirty months will allow a proper sample to be evaluated, including the impacts of collection charges. Within that timescale we will lay a report on the review and the Government’s conclusions on charging before Parliament. I ask noble Lords to support this amendment and the commitment to review.
Child maintenance needs major reform. Fifty per cent of children of separated families have no maintenance arrangement in place at all. We will provide improved statutory child maintenance for those who really need it, and we will of course continue to support lone parents directly through benefits and tax credits. However, we need a fundamental change so that wherever possible parents think twice, take responsibility and do not depend on the state. I beg to move.
Baroness Sherlock
My Lords, I will speak briefly to Amendments 62BL and 62BM, and in doing so I draw the attention of the House to my interests, which are in the register. I am a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of the National Council for One Parent Families.
I want to ask a specific point about these government amendments, which seem to be producing a new formulation that would require an applicant wanting to apply for child maintenance through the CSA to consider with the commission whether it is possible for them to make a private arrangement before being allowed to make such an application. Can the Minister please make it clear to the House just what the applicant would have to do? If I am making an application and I simply say, “I wish to make an application”, and the agency says, “Have you considered making a private application?”, and I say, “Yes, but there is no way that he is ever going to agree to it”, is that enough? Am I then allowed to proceed, or is it intended to be a bigger hurdle than that?
Baroness Tyler of Enfield
My Lords, I welcome the announcement of the additional £20 million for family support services for separating families, which is part of this package of reforms, and in doing so I must of course immediately declare a very direct interest as departing chief executive—this week—of the charity Relate. We provide help and support to separating families, to mothers, fathers and children and to wider family members. I recognise also that this is less contentious than the issues surrounding the reform of the statutory system, which we will be debating a little later, but it is worth a quick comment—not least because of the fact that each year around 350,000 children are directly affected by parental separation.
I am sure that all noble Lords across the House will agree that it is better, wherever possible, to encourage separating parents to make voluntary maintenance arrangements and to provide them with all the necessary practical help and support to do so. I am equally sure that all noble Lords recognise that this avenue will never be possible or appropriate, or even desirable, for all parents, particularly when issues of domestic violence are involved. That is what the statutory service is there to do, quite rightly, but it must be in everyone's interest that as many separating families as possible are encouraged and actively supported to make their own arrangement, not least so as not to clog up the statutory system for those who really need it most. The fact that some 50 per cent of children living in separated families have no effective child maintenance arrangements in place is surely evidence that the current system needs an overhaul. It is self-evident that any new system should be based as far as possible on reducing conflict and encouraging collaboration.
The fact that the funding announced today will allow parents to access more consistent support services as soon as possible across the country, and that it responds very directly to concerns raised by the DWP Select Committee a number of months ago, will be in everyone's interests, particularly those of children. This form of earlier intervention must be a wiser use of resources than waiting for problems to become so intractable, and for conflict to become so entrenched, that voluntary-based arrangements, frankly, become quite impossible.
As a former chair of the Kids in the Middle coalition of charities, I know that high levels of conflict in family relationships are bad for the well-being of everyone involved, particularly the children. Research makes it clear that the two most damaging issues for children when parents separate, which often make effective and enduring co-parenting far more difficult, are high levels of conflict and a lack of contact between both parents after separation. It will hardly be a surprise that the two often go hand in hand and, crucially to the debate today, that where there is contact between the child and the non-resident parent then often financial support arrangements flow as well. There is good evidence for the impact that co-ordinated services can have in this area, addressing financial, legal, housing and practical advice but also emotional support, mediation and a range of other things. I will not detain the House any longer by going through the research evidence that exists in this area, but I find it persuasive.
I stress, as I did in Committee, how detrimental it is to any child to grow up not simply without enough income and financial support but without any role model of a father—as generally the non-resident parent is—as a key figure in that child’s life, providing practical, emotional and financial support.
Baroness Howarth of Breckland
My Lords, I shall speak briefly, following the noble Baroness, Lady Tyler, who is about to follow me as chair of the Children and Family Court Advisory and Support Service. I speak as someone who has dealt over many years with some of the families who are in greatest conflict and need. The Minister will know that, of the families who separate, 10 per cent go to court. Those 10 per cent are the most difficult families. Often they are very close to families who come through public law, which are the families who really have child protection issues. However, we find in assessment that many of the families who come through private law divorce proceedings may well have these issues.
I agree that there is some need for reform. I welcome the money being put into relationship work and hope that some of that will find its way to CAFCASS, which does a great deal of that work with those difficult families. There is a proportion of families, though, where it is clear that the level of conflict between the families is detrimental so continued contact with both parents—judges have said this—may well not be the answer for those few children.
I am interested, as the noble Baroness is, in who is going to make that assessment and at what point the mother—it is usually a mother, although occasionally it is a father—will know that she is not going to have to continue to engage with an extremely aggressive and often destructive person who has damaged not only her own relationship but that of her children, and when she will be able to bypass all those procedures and be sure that she can actually get maintenance. The likelihood of the man giving her maintenance is slim, but she needs to be able to get by the procedures.
Lord Mackay of Clashfern
My Lords, it will be fairly obvious to most of your Lordships that these amendments are not entirely unrelated to the amendment that I am going to move in a little while. I am not certain of this, of course, but I have a feeling that the proposed amendments regarding the test for the discretion to be used have arisen out of discussions that I have had, which my noble friend Lord De Mauley has been at too, about the effect of the test in relation to charging. I will not elaborate on that now.
I would just be interested to know on what basis this test was originally put into the Bill. It must have been the subject of instruction; parliamentary counsel are extremely creative, but only on the basis of what they are asked to do. They are very good at finding words to express what you want. I wonder, and my noble friend may know the answer to this, what they were asked to do in the first instance. Does this reflect a change in the underlying request or not?
The third amendment concerns the review. That was certainly mentioned to me by the Secretary of State when I met him a week yesterday. I am entirely in favour of that. However, I suggested to him that it would be fair to do it on my basis and that that would be a real test of how good my suggestion was. However, it was suggested, “No, we will test it on my basis”—that is, on his basis. Therefore, from my point of view there is not much of an improvement as yet, but who knows what may happen? At present, the amendment is very welcome but, so far as I am concerned, it does not help me at all.
Lord McKenzie of Luton
My Lords, when the noble Lord, Lord De Mauley, introduced these fairly specific amendments, we had a bit of a broad sweep about the background to where the Government were going on child maintenance. I start by welcoming the £20 million of additional funding that has been announced. The noble Lord said that the Government were seeking to introduce tough enforcement and collection, with non-resident parents not being able to escape their obligations, and with HMRC gross data being used for the relevant calculations. We can sign up to that. In fact, we dealt with that in the 2004 child maintenance legislation, so that is in place; it is not new.
The noble Lord referred to the cost of the scheme—£450 million a year. One of the problems is that three schemes are operating side by side through a transition. I think it was originally planned that by 2012—this year—we should be down to one scheme based on gross data, which should significantly reduce costs. However, I think that has been somewhat delayed by the Government.
As regards tough enforcement and collection, following a question that I raised in Committee, the noble Lord wrote to me indicating that not all the powers included in the 2008 Act had been brought into force. If I am wrong on that, he may take the opportunity to correct me.
Amendments 62BL and 62BM appear, at first reading, to make it harder for parents with care to access the statutory maintenance service. The Bill as it stands provides for applicants to take reasonable steps to establish whether it is possible or appropriate to make maintenance agreements outside the statutory system. A key part of the Government’s reform of child maintenance was supposed to be the introduction of the gateway referred to by the noble Lord, the purpose of which is to ensure that all clients consider the range of their child maintenance options so that they can be directed into the family support services where appropriate. The Government’s White Paper states at paragraph 10 on page 18:
“In some cases the gateway will be a step towards an application to the statutory scheme. Where the parent wishes to pursue that and states clearly the reasons why, the conversation about other options available will be closed and they will be assisted in moving to make a full application”.
There were concerns that this process would be a way of screening out parents, particularly parents with care, from the statutory scheme. These were heightened by the potential loss of the statutory requirement to maximise the number of children benefiting from effective maintenance arrangements, which is an obligation of CMEC but is not to carry over to the successor—the executive agency—when that comes into being. Just a few hours ago we received a letter that purports to provide further clarity to the Bill. The noble and learned Lord, Lord Mackay, touched pertinently on that point. I am bound to say that it is regrettable that once again this information is released so close to our Report sitting. A crucial paragraph in that states:
“Therefore, we are now in a position to provide further clarity to the Bill by making it clear that the only engagement required prior to accepting an application to the statutory scheme will be to invite the applicants to have a telephone call with an adviser to discuss their options”.
Like my noble friend Lady Sherlock, I would like better to understand what that means.
If this is the interpretation that the Government put on the two amendments, it will be important to have this on the record. However, I am bound to say that such an interpretation does not flow readily from the wording, which requires the applicant to,
“consider with the Commission whether it is possible to make such an agreement”.
The term “consider” at least implies a more deliberative process than just a phone call. The process being “with the Commission” suggests the two parties having to agree on some sort of basis. However, if this is not what is intended, it would be very important to have that on the record. Given the lateness of this item in our deliberations, we may have to return to this matter at Third Reading.
The cynic might say that this changed position is an attempt to undermine the amendment in the name of the noble and learned Lord, Lord Mackay of Clashfern, by removing, in relation to Section 9 of the Child Support Act 1991, a requirement for an applicant to take “reasonable steps” to establish whether it is possible to have voluntary arrangements. We would not accept that, and the noble and learned Lord’s amendment continues to have our full support and stands separately from these amendments.
However, perhaps the Minister will tell us what the future of the gateway service is to be. To be fair, it was always envisaged that it would start by a telephone offering, but is that now to be its steady state? If not, and if it is to be developed into a more extensive engagement, how would that sit with the new government amendments?
To be clear, we have acknowledged the benefit of voluntary arrangements and the prospects of them being more sustainable. We support the development of family support services. We legislated to remove the requirement for benefit claimants compulsorily to use the statutory system and provide what has become the option service. Our strong concern in doing so was not that thousands would rush to use the free statutory service, but that parents with care would drift out of the system and fail to make arrangements at all.
As to Amendment 62CA, we would support a review of fees regulations. That does not mean we accept the structure of the fees proposed. We would prefer it to be done on the basis of the noble and learned Lord’s amendment.
Lord De Mauley
My Lords, I am grateful to all noble Lords who have spoken. Let me turn directly to the issues raised by noble Lords. The noble Baroness, Lady Sherlock, asked, under the amendment, exactly what will happen during the gateway conversation. This also addresses the point made by the noble Lord, Lord McKenzie. We want parents to pause for thought when contacting us, before deciding whether to proceed with making an application to the statutory service.
We believe that the best way to achieve this is for parents to undertake a telephone call with a specially trained adviser. The only requirement on the parents contacting us before entering the statutory scheme will be to engage in this conversation and to discuss whether they have considered their alternatives. The adviser will be able to provide advice and signpost the parent to other support available, if required. Parents can then, if they wish, take time to consider the alternatives and discuss collaboration with the other parent. However, I stress that engaging in the conversation when first contacting us is the only requirement to enter the scheme. Everything else is voluntary. There is no question of us seeking to direct parents to take any specific steps. Where a parent identifies during the conversation that they need to make an application to the statutory service, the adviser will help them to do so. I hope that that addresses the point of the noble Lord, Lord McKenzie.
Lord Cormack
Can my noble friend assure the House that the telephone will be answered by a human being and that there will be a direct line to an individual, not to an automated “press this, press that” system?
Lord De Mauley
I share my noble friend’s horror at being asked to “press 1” and so on for different things. I cannot absolutely guarantee that the very first answering of the call will not be that, but the key point is that it will be possible to have a conversation with a human being. That is the gateway.
My noble friend Lady Tyler has much experience in this area and I am extremely grateful for her supportive comments, particular about the additional resources.
The noble Baroness, Lady Howarth, also has a lot of experience in this area. I hope that my answer to the noble Baroness, Lady Sherlock, has addressed the nub of what the noble Baroness, Lady Howarth, was asking. Our reforms will mean that maintenance flows more certainly and more quickly. If someone presented and told us that they had an aggressive partner, we would immediately help them to make a maintenance application.
Lord Freud
Lord Mackay of Clashfern
“(3) In section 6 of the Child Maintenance and Other Payments Act 2008 (provision to allow charging of fees by the Commission), after subsection (2) there is inserted—
“(2A) Nothing in regulations under subsection (1) shall impose a liability on a parent with care for the payment of fees to the Commission where that parent has taken reasonable steps to establish whether it is possible or appropriate to make a maintenance agreement (within the meaning of section 9 of the Child Support Act 1991), and where, having taken such reasonable steps, it is either not possible or not appropriate for the parent with care to do so.””
Lord Mackay of Clashfern
I move the amendment out of a sense of the need for fairness in these alterations. I should say at the beginning that I am a member of Barnardo’s and I thank others in the voluntary sector who have helped me in the work of contacting your Lordships.
After I sent my letter, one of my senior colleagues said to me, “I was surprised to receive a letter from a former Lord Chancellor inviting me to be a rebel”. I have thought about that. My primary motivation as Lord Chancellor was to get fairness and justice for our people, and I hope that I have not laid that motivation aside on laying down my robes for the last time.
My amendment is about a very simple matter of fairness. The government briefing dealing with the clause in its earlier form included the statement, which all of us may believe to be true, that,
“a significant proportion of parents will not be able to collaborate. For example, where an applicant has a former partner who refuses to engage or pay child maintenance voluntarily there would be no reasonable steps they could take”.
That is the group I am focusing on, because I do not believe that it is fair to require them to pay charges when they are not responsible for creating the need for the use of the service.
The obligation to maintain children is an obligation between the parent and the child which subsists for so long as the child needs maintenance and the parent lives. The mere fact that there has been disturbance and breakdown between the parents is in no sense a reason for not paying maintenance. Therefore, one of the key things that my noble friend Lord Newton and I thought, when this arrangement was being made originally in 1991, was that it was important to separate consideration of things such as contact and other detailed arrangements from the obligation to pay maintenance. That is a clear obligation which, as I said, subsists whatever the relationship between the parties.
My question is simply: is it fair to charge a parent in that group? The suggestion is that the use of charging will create an incentive on both parents to enter into an agreement. I agree that in many cases that will be so, but the quotation I have just given explains that that is not true in every case. I use the example of where the man declines to pay maintenance. It is usually the man as 97 per cent of the cases under the CSA are initiated by the mother as the parent with care. There are one or two where it is the other way round, but I use the mother for illustrative purposes, as long as your Lordships understand that that is not the universal situation. In my view, the only question that arises on application to the CSA—the names have changed once or twice but the name CSA is used in the letter that was kindly circulated this morning—is whether the parent, the father, is prepared to pay maintenance: is he paying maintenance and is he prepared to pay maintenance? That is all. He is not asked anything else.
The idea that I want to have an adjudication of whose fault it was that there was a breakdown is absolute nonsense. Those of your Lordships who have been here long enough will remember that I had some trouble getting through this House a law reform Act of 1996, which introduced divorce without fault. No-fault divorce seemed to me to be the only answer. I do not believe that any tribunal on earth is able to make an absolutely just appraisal of who is responsible for a breakdown in a relationship. I certainly do not want to put that task on the CSA—not at all. I want the CSA to be concerned solely with the question of maintenance, and the obligation of maintenance clearly arises when one is a parent, nothing else. It does not matter what else has happened. As long as I am the parent and the child is still in need of maintenance, the obligation subsists. That is the only question that arises at that stage. The idea that I want to have some kind of quasi-judicial bureaucratic process that will take a great deal of money out of the system is nonsense. I have no such desire.
Those of your Lordships who were here will remember the debate about the Bill—which, as I say, is still on the statute book, not yet implemented. The time will come when it is, probably; at least, I hope so. I am also very keen on what the Government are now saying about the need to try to get voluntary agreement. I am 110 per cent behind that. I believe that voluntary agreement on all the arrangements needed on separation is vital. If we could get that in every case, there would be no need for the CSA and very little need for a good lot of the family court arrangements that we have to have. Sadly, we are in the real world and that is not always possible.
That is the simple point that I wanted to make. I suggested when I had some of these meetings how this could be handled. My idea is that when somebody applies to the CSA and is serious about it, the application should be taken into account and immediately a letter would go to the non-resident parent—the NRP as we tend to call him—to ask whether he is paying maintenance at the moment or is willing to pay, and giving him something like a fortnight or a month to reply. There is no need for any quasi-judicial function or anything of that sort. That is what I want. On that basis, if he says, “I will certainly pay and set up a direct debit tomorrow”, there is no question of the CSA being involved. However, if the CSA is involved to force him to pay, he has the responsibility for bringing that about and the fees should be adjusted. The fees are still subject to discussion. There is no question at present about a strict standard of fee; the fees are subject to discussion. They should take account of the fact that this is the way the scheme operates.
The motivation of the Government for these charges is said to be to try to bring people to voluntary agreement. I am entirely in favour of that. But if that proves impossible, when the woman is at the stage of having nothing more that she can to, she has to pay. What does that do? If anything, it might make her not go to the Child Support Agency at all and the child will lose the maintenance. I cannot see that asking for that is an incentive to do anything that the Government want.
There are other considerations that I would like to mention briefly. As I say, I am entirely in favour of putting as much money and effort as possible into getting people to reach agreement when they fall out—if possible, repairing the relationship, and if not, trying to sort out the consequences of its breakdown. The Government propose an exception to this in respect of domestic violence. I believe that my amendment would take them out of the hole of trying to define domestic violence by reaching the conclusion that where there is the threat of that sort continuing at the time, any kind of agreement between the parties on maintenance is just not possible and therefore not appropriate in terms of my amendment. Your Lordships will notice that the terms of my amendment came out of the terms of the clause before the amendment that was proposed a few minutes ago. It has the full approval of parliamentary counsel obviously, and a very excellent draft it is. This would deal with the question of the exception in favour of those who have been the subject of domestic violence. I do not think that the Government have yet worked out exactly how they will establish that. I have every sympathy with them and offer them an easy way of dealing with the matter.
The statutory provision for charges came in as a result of Sir David Henshaw’s report. He makes it clear that he did not want to see charges as a disincentive to the use of the system. At the stage that I am dealing with and for the group I am dealing with, that is the only possible purpose of it. This does not carry the approval of Sir David Henshaw in his advice to the then Government to bring in the power to charge. This seems to be the situation. It is simple and I am extremely sorry to find myself in a position of opposing the Government. I was anxious if possible to reach an accommodation with them but so far nothing has been offered to me that would be an explanation to your Lordships of why I withdrew from this very principled position. I beg to move.
Lord Morris of Aberavon
My Lords, I rise in support of the noble and learned Lord. This is my first intervention in this Bill and it will be brief. I hope that my experience as a constituency MP will be of some assistance to the House. In that capacity I was, I am sure like all MPs, overwhelmed by the number of cases arising from problems of dealing with the CSA. The majority were wives. Mine was a heavily industrialised constituency and industrial workers were not overpaid. The problem was trying to get two family incomes from one pot. All the difficulties arose from that. They were mostly, in fact all in my case, people of modest means. They came to their Member of Parliament because all else had failed. The CSA had failed. It did not have a glorious record. The proposal passed through the House of Commons far too quickly, almost on the nod. It was hardly questioned. It has been relaunched more than once. People at the top were moved but to no avail. From what I heard from the Minister a few minutes ago, this is yet another relaunch. I suspect that the burden on MPs, although I am now out of touch, has not lessened in recent years.
I was aghast when I read the proposal to have a charge. How will it assist people of very modest means before they avail themselves of existing machinery—however bad and unsuccessful it was in many cases? What is the purpose of imposing such a charge on the most vulnerable people? It reeks of unfairness and I support the noble and learned Lord.
Lord Newton of Braintree
My Lords, if anyone wondered why I moved from my earlier position, they would have guessed that it was to stand shoulder to shoulder with my noble and learned friend Lord Mackay. He and I were in cahoots over the attempts to tackle this problem 20 years ago. We were in cahoots with what was said in Committee on this matter, and I have made it clear that I intend to remain in cahoots with him on this amendment.
I have not been at the meetings, but I have had a number of conversations with Ministers and I give them credit for being willing to talk to me as well. I think that my noble friend in front of me will acknowledge that I have consistently said that if they could satisfy my noble and learned friend, I would not seek to push it, but if they could not satisfy him, I would stick with him. Essentially, I share his views. I do not think that it is fair, right or productive. The letter that presumably went to everybody in the House was mostly convincing. I have no problem with the case for reform or the desire to cut the costs. I have no problem with the desire to encourage people to collaborate voluntarily. What I have a problem with is that I do not think that those general points connect to the conclusion that my noble and learned friend’s amendment is wrong. I shall vote for it if he decides to press it, following what has been said.
It is a simple position. I will not rehearse his arguments or seek to elaborate them. I shall make only one other point which relates to the 13-month review. I am in favour of a review, but the case for reviewing it after experience is stronger on the basis put by my noble and learned friend than on the basis put by my noble friend the Minister. If there is evidence that it is discouraging sensible, voluntary arrangements in the interests of children, we can look at it again then. I do not believe that it will—and this would need to be shown before we changed from the basic, fundamental proposition that it is not right, fair or just for a parent with care to have money deducted on these grounds from the money paid for her children.
Baroness Butler-Sloss
My Lords, in the family courts the welfare of children is paramount. It is particularly important to remember that in relation to the amendment that the noble and learned Lord moved, which I very strongly support. I have absolute, practical experience as a family barrister and judge, from long before the CSA came into being and took that work from judges. I have vivid recollections of a certain group of parents, principally fathers but occasionally mothers, who absolutely would not pay. There was no point in even asking them—although I understand why the Minister thinks that they should be asked. They would do everything in their power not to pay. The only way they can be got at now is through the commission. It can only do a better job than the CSA, which profoundly failed at the task it was set.
These parents will not pay, and the idea that a mother in very poor circumstances, left with young children by the father, may find herself having to seek social benefit from the state, which she may not have sought before, when the father may have money while she has nothing that the state does not provide, and may then have to pay a fee to try to get money for the welfare of her children, particularly where she has no money and the father may have some, is profoundly unfair. I respectfully and strongly support the noble and learned Lord, Lord Mackay of Clashfern, and hope that the House will support him, too.
Lord Cormack
My Lords, I, too, very much hope that the House will support my noble and learned friend. I hope that those on this side of the House who are inclined to support him will not consider that they are acting as rebels against the Government. This does not knock the central plank out of the Government’s Welfare Reform Bill, which I am proud to support. I listened to what my noble friend Lord Newton said on Monday and wish more noble Lords had heard it. He spoke eloquently in support of the principles of the Bill. His speech was widely and rightly commended. However, here we are dealing with something very different. We are not torpedoing the Bill. We are injecting a little bit of extra fairness into it.
The noble and learned Lord, Lord Morris of Aberavon, spoke as a former constituency Member of Parliament. I was in the other place for 40 years and saw countless women who came to me in great distress, who would have regarded a fee as a deterrent and who considered that this was further evidence that the system was against them. They often came in despair and because they were in true need; but also because the child for whom they were responsible, and for whom the father was responsible, was in need. We are talking here about children, who are not party to whatever dispute might have divided the marriage, relationship or whatever else. Saying to a woman who comes in distress and despair, “Fill in form X and pay your fee”, would be nonsense. What they need is help, contact with human beings—which is why I made my brief intervention on the Minister's speech a while ago—and support.
The noble and learned Baroness, Lady Butler-Sloss, was quite right to say that some people have no intention of owning up to their responsibilities and paying. The Government's general philosophy is one that I hope that most Members of the House can support. We all know that our welfare system is in need of overhaul and reform and it is a courageous act to face up to that. However, this does not mean that everything in the Bill is right, and this clause needs amending in line with what my noble and learned friend said. He is a man of infinite wisdom and great experience, and is held in the highest respect in all quarters of the House and all parts of the country. He is no rebel; he is a man of common sense and compassion and he deserves support.
Baroness Howarth of Breckland
My Lords, I will make a simple and straightforward intervention. I will not repeat what I said earlier, but the points I made then were pertinent. I wholeheartedly support the noble and learned Lord, Lord Mackay, and will make two points. It is right that when the noble and learned Lord brought forward legislation that separated maintenance from contact, it took us forward. However, the two things are not separate. A man—it is mainly men; only 3 per cent are women—may feel that he should have contact with his children despite the fact that he has been found not to be safe, not only in relation to domestic violence but to child protection issues. He may believe that he has a right to contact. However, if the court has said, “No contact”, he will definitely not feel that he has to make any payment whatever. One cannot separate the two issues.
I have one further question. Being of a practical turn of mind, I am still trying to work out how the system will proceed. There will be a telephone call with a human being. I do not know whether the human being will have any training or understanding of the issues; where they will come from; or what their background will be. These situations are extraordinarily complex. In the children and family court service, our staff make this kind of assessment when cases come through to ensure that there are no protection issues. They are our most experienced staff; not the least experienced or the clerical staff. Who will do that in future?
After the phone call, who will make a decision? What sort of assessment will be made, in cases of violent marital dispute and child protection, to determine whether someone has to pay? I have not gone into all the issues that were eloquently put forward by other noble Lords around the House about the justice of the matter. Women who may have been abandoned after horrific incidents with men will find themselves being held responsible. As the noble and learned Lord, Lord Mackay, said, this will not affect everybody but only that group. How will we identify them and who will make the assessment?
Baroness Howe of Idlicote
My Lords, I remember listening to the noble and learned Lord, Lord Mackay, upstairs in Grand Committee. I immediately saw the sense in what he said and backed him. Upstairs, the situation was limited. Here, one sees a fascinating cross-section of all sides of the House thinking that this is the right way forward, and that there is no way the charge should be levied when we all know the dangers that this group of women—I am thinking of what my noble friend Lady Howarth said—may find themselves in. As we have heard, some 97 per cent of those who go to the CSA are women. Many of them are suffering and none of us should be prepared to make them suffer further.
I was sent many letters at that time. I remember particularly an extract from one of them. I will repeat a tiny bit of it because it is also to do with the CSA, which we have heard being criticised and equally we have heard is doing a good job, even though it has had to be reformed several times. She wrote:
“When the payments finally started coming in via the CSA—you cannot imagine the weight that was lifted off my shoulders. I finally felt I could plan ahead for school trips, clothes and other essentials. The relief has been immense. The truth is that the proposals will only penalise the children the CSA is meant to help. Women generally only turn to the CSA when they have exhausted all other avenues. It's an act of desperation”.
She ended:
“My message to the government is this: you will be hurting the very people you are trying to help. And, I fear, partners who only receive a small payment will just give up altogether. It will be their children who suffer”.
I congratulate the Government on the efforts they have made and on the £20 million that they are going to be putting aside. I am not critical of that at all and I think that their intentions are in the right direction. However, a very interesting cross-section of the House still wishes to continue to support the amendment moved by the noble and learned Lord, Lord Mackay. That is not just a good example of what this House represents and of the wisdom and sense it represents, but it is also the right thing to be doing.
Lord Brooke of Sutton Mandeville
My Lords, I was sitting next to my noble friend Lord Boswell of Aynho, who was the seconder of my noble and learned friend’s amendment, when my noble and learned friend moved his original amendment in Grand Committee. I rise to explain that the reason that we have not heard from my noble friend Lord Boswell is because he is on separate duty in the Council of Europe today.
I hope my noble and learned friend Lord Mackay of Clashfern will understand that I think that on our side we have an obligation to listen very carefully to what the Minister says, and I propose to do that, but the fact remains that a very powerful case has been made in the opposite direction.
Baroness Sherlock
I came across a quotation from the Committee stage:
“For even though marriages may break down, parenthood is for life. Legislation can't make irresponsible parents responsible. But it can and must ensure that absent parents pay maintenance for their children”.
That was said by the noble Baroness, Lady Thatcher, in 1990. She went on to talk about setting up the CSA. We have heard a lot about the failings of the CSA, but more than £1 billion changed hands last year through it. Before it was set up, lone parents had only the option of going to the courts to try to enforce maintenance, and in the vast majority of cases, they could not afford to go and could not afford to enforce it if it happened.
There are two very simple reasons for backing this amendment, which is why my name is on it. The first is simple compassion. There is no good reason why a single parent should have to hand over to the state not only £100 up front but up to 12 per cent of the money that is currently going to her children simply to have what is owed to her in law paid.
The second is a question of justice. If the Government’s intention is to change behaviour and to make sure that the absent parent pays up, they should charge him. What can the lone parent possibly do, other than ask, to make him pay up? Yet she will be penalised for his failure to pay. There is no behaviour change that she could possibly undertake, other than to ask nicely. She cannot do anything. That is why she has gone to the state in the first place. She has come to the state to ask for the help that the noble Baroness, Lady Thatcher, recognised all those years ago and set up an agency to give. We must not fail her today.
The Lord Bishop of Manchester
My Lords, many of my parish priests would endorse the kind of things that we have heard of this afternoon, the many cases where single parents—97 per cent of them mothers—are placed in a most cruel and unfair position. It is only recently, I think, that the Prime Minister said that our society must do more to make fathers understand and take responsibility for their paternal aspects which they have taken on by becoming fathers. What I do not think he said but, unfortunately, what this Bill does is that the mother who is left on her own without any financial backing from that father should therefore pay this huge penalty. That is what this Bill is requiring at the moment. It seems to me that what the noble and learned Lord, Lord Mackay, is putting before this House is a very sensible and compassionate way of undoing an injustice which I do not believe the Government really intended in the beginning. I hope that the Minister will see his way forward to recognising the great power of opinion that he must surely have heard this afternoon in this House.
Lord Stoddart of Swindon
My Lords, I say right away that I have no hesitation in supporting the amendment of the noble and learned Lord, Lord Mackay of Clashfern. I remember, as I am sure he will remember, the debates we had during the day, and in the watches of the night, over the original CSA Bill. We had certain disagreements at that time, but we have no disagreements this afternoon. Time is getting on, but the point I really want to make is that the Government, in imposing charges, are, in fact, undermining what they want. If there are no charges, the Government are in a win-win situation because it will not only help them financially but it will help family life, particularly for women, and will also give encouragement, perhaps, to the absent male, the absent father, to take a greater interest in the family if he is making a contribution towards the upbringing of the child. I appeal to the Government for their own sake to accept the amendment moved by the noble and learned Lord, Lord Mackay. It is a very sensible amendment that has been supported on all sides. There has been no criticism from any part of the House. I feel sure that if the amendment is put to a vote, the Government will suffer another defeat, and I am not at all sure that politically that is very wise.
Lord Mawhinney
My Lords, politicians regularly claim to have fairness on their side. It is sort of part of the trade, and it creates the impression that they are on higher moral ground than the opposition—whether that be the Opposition or the Government—who, by definition, cannot therefore have fairness on their side. In more than 30 years at both ends of this corridor, I can think of very few, if any, debates where we have debated quintessentially just the issue of fairness. It is always linked with a policy, and this is linked to a policy as well but, as has become clear during this debate, what we are really being asked to take a decision on is fairness.
I make no apologies for saying that I had the pleasure, some years ago, of working closely with my noble and learned friend Lord Mackay of Clashfern. I have no embarrassment in saying that I learned from him and benefited from his integrity, wisdom and common sense. If any noble Lords had not had this pleasure and privilege, they will have had this evening. That was as powerful an explanation in simple language of integrity, clarity and humanity as I have heard. I have seldom if ever heard someone put the Government ever so gently but firmly in their place without creating any angst, unhappiness or unpleasantness in the process.
I agree with the noble and learned Lord, Lord Morris of Aberavon, and the noble and learned Baroness, Lady Butler-Sloss: any Member of Parliament can tell stories about the failure of the CSA. The noble and learned Baroness, Lady Butler-Sloss, spoke of her experience of dealing with men who were intransigent beyond persuasion. I cannot be the only former Member of Parliament who has been physically threatened in surgeries by men because I tried to persuade them that I did not have the power to solve their problem. That threat of physical violence stemmed from an antipathy to their former partner which was time and again beyond remedy—in many cases, beyond even consideration.
I have to say to my noble friend the Minister that, just for once, I think the Government have got it wrong. I support what they are trying to do and I know of nobody in either House who would have the gall to stand up and describe the noble and learned Lord, Lord Mackay of Clashfern, as a rebel. They would get laughed out of court if they tried. I cannot stand shoulder to shoulder with him, but they would also have a certain amount of difficulty labelling me that way.
If ever there was a time for the Minister to say, “This has been a very good debate, conducted in good humour but with surprisingly impressive intellectual integrity and humanity, and I will take this back and talk to my colleagues and come forward at Third Reading with the Government’s considered position, bearing in mind this debate”, it is now. I hope my noble friend might take that as a constructive suggestion for the way forward.
I made it clear before I came into the House for this debate that it was not my intention or inclination ever to vote against a proposal moved by the noble and learned Lord, Lord Mackay of Clashfern, my friend, but I did not commit myself on whether to abstain or to support him. Unless the Minister says something wholly remarkable over and above what has so far been said, I will join my noble and learned friend in the Lobby.
Lord Goodhart
My Lords, I do not often vote against coalition policy. I voted for the coalition on Monday, when the coalition was in fact defeated. I voted for the coalition policy then, not because I personally supported that policy but because it was something that I could and should accept as a member of my party and therefore the coalition. This occasion is entirely different. The draft that the amendment replaces has been shown to be very seriously defective. I cannot support that draft. I can and will support the amendment of my noble and learned friend Lord Mackay of Clashfern.
Baroness Berridge
My Lords, I have not spoken previously in your Lordships’ House on this Bill, but I briefly practised as a family barrister and as such I hold the noble and learned Lord, Lord Mackay, in the greatest esteem. However, what initially looked attractive when I received his letter has given me pause for thought.
As a barrister, I witnessed how unresolved issues concerning the breakdown of a relationship get played out in matters concerning money as well as children. Although much has been said on behalf of mothers, who are in the majority in this situation, of course it is not as simple to say that just because the mother has the care of the children she is not sometimes at fault for the fact that maintenance is not paid. I would like to put on record before your Lordships the perspective of fathers, which I think is best described in the lyrics of Professor Green’s “Read All About It”, one of the most popular downloads last year. He was referring to his mother when he said:
“After all, you were never kin to me.
Family is something you have never been to me.
In fact making it harder for me to see my father
Was the only thing you ever did for me”.
It is a heart-rending rap about a child caught in the animosity of a break-up. As I am sure your Lordships will agree, avoiding conflict in the courts or in any other forum helps to limit such animosity, greatly to the benefit of the children.
Will there be rare cases where the lack of payment is entirely the mother’s fault? Yes. Will there be cases where the lack of payment is entirely the father’s fault? Yes. However, in the majority of cases it will be to some extent both people’s fault. If I were convinced that this amendment would address only the concerns outlined by the noble and learned Baroness, Lady Butler-Sloss, I would support it. Unfortunately, I believe that the unintended consequence of this amendment would result in the adjudication of matters that would not assist or encourage amicable ongoing relationships between the parents, which are of the greatest value to the children at the end of the day.
I am afraid it is not as simple as just catching the cases outlined; nor unfortunately are parents always able, in my experience as a barrister, to separate their role as a parent from the issues of the breakdown of the relationship. I would be grateful if my noble and learned friend could please outline how there will be a determination as to whether or not someone has taken reasonable steps without some kind of judicial process, and how introducing any form of fault-based assessment of the parties’ conduct in relation to the payment of money is possible without inadvertently—and I accept it is inadvertently—providing a forum in many cases for the outstanding relationship issues to be unhelpfully vented. I am afraid I am not convinced by the noble and learned Lord’s amendment.
Lord Kirkwood of Kirkhope
My Lords, I will just take two minutes to deal with that, if I may.
First, I have encountered the break-up of marriage at a variety of levels. I was involved in consistorial legal work before I was elected in 1983, and I spent most of my time in the House of Commons as a spokesman for my parliamentary group and then as a chairman of a Select Committee which endlessly looked at the 1991 Act and all the bits and pieces that flowed from it. It has been quite clear to me as a result of all that experience that if anybody tries to take some lessons and principles from the cases that are conducted in the High Court of the land, dealing with many thousands of pounds at a very high level, where things are fought over and the big silk hanky brigade of the legal establishment makes lots of money, they are a million miles away from ordinary people whose families break up week in, week out. I do not think it is safe to start contemplating the amendment tabled by the noble and learned Lord, Lord Mackay, and its consequences, when seen from that perspective. That is not what this is about.
I mentioned Select Committees. I just want to draw noble Lords’ attention to the fact that the current Select Committee in the other place recently produced a report on this which recommended that where parents with care had taken all reasonable steps to investigate a private arrangement but that was not possible or appropriate, no charges should be made. In my view, there has never been an established case made for charging either parents with care or non-resident parents.
The Henshaw report was an extremely scrappy piece of work. The noble and learned Lord, Lord Mackay, rightly pointed to the fact that even the Henshaw committee, upon which most of the Government’s case is made, clearly said that it did not want any disincentive effect to be imposed as a result of charging. It made a different case altogether. Incidentally, the Henshaw committee report was as clever as to say that we should close down the CSA and have a residual body to chase debts. That is about how sensible some of the recommendations in the Henshaw committee report were. As far as I am concerned, it is true that it was discredited before the ink was dry and it went for ministerial consideration.
This issue is about whether charging will assist collaboration and co-operation between separating parties. I can see no understandable circumstances that charges would make it easier for people to stay together longer. I do not see how that case can be made or that it has been made.
The system we are setting up for 2014 will be much cheaper for a variety of reasons. From an administrative point of view, there is no need to put money into the system because the assessment process, the computer systems and so on will make the whole administration of this, if it all works, a lot easier. It is entirely affordable. The way in which some Ministers have been rubbishing the system is disgraceful. It is not a perfect system but it supports 870,000 children—I repeat, 870,000 children. This is not an insignificant institution which could be done without. Nudging 50 per cent of single parents with care get something like only £20 a week. That is the extent of the money that they derive from the system, but it is essential for those who use it.
Quite simply, collaboration between the parents who are separating will not be assisted by charging. It would inevitably result in less money flowing to the children in the charge of the parent with care. There is no case whatever for charging, so I am compromising greatly in supporting the entirely reasonable amendment moved by my noble and learned friend Lord Mackay. Speaking for myself, I would scrap the whole idea and not give it house room. I hope that the House will come quickly to a resolution and I encourage noble Lords to support the amendment in the name of the noble and learned Lord.
Lord McKenzie of Luton
My Lords, this has been a powerful, passionate and extremely well informed debate. If the debate has not been quite unanimous in support of the noble and learned Lord’s amendment, one thing on which there has been unanimity is the esteem in which he is held. On charging and the Henshaw report—which the noble and learned Lord mentioned, as did the noble Lord, Lord Kirkwood—as the report made clear, any charging regime should not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. That was translated into a White Paper of the Labour Government, which said that charging should be based on three clear principles: it should incentivise non-resident parents to meet their responsibilities; the clear burden of charging should fall on the non-resident parent and not the parent with care; and cost recovery via CMEC should never be prioritised over payments to parents with care.
A host of points have been made. I agree with what the noble Lord, Lord Cormack, said—supporting this amendment will not torpedo the Bill. If it would, I would doubly support it. But even on the basis that it will not, it should be supported. We have heard testament from a number of noble Lords, particularly the noble and learned Baroness, Lady Butler-Sloss, about the complexity and possible difficulty of people’s lives. We have to recognise that people just do not live tranquil, routine lives where you can easily come to agreement. As someone who briefly had ministerial responsibility for the CSA, I saw some horrendous cases about non-resident parents, mostly men, who would do anything to avoid meeting their obligations.
The history of the CSA/CMEC has evolved, and this is perhaps not the occasion to rehearse it. The fundamental point that the noble and learned Lord made was that this is about fairness; it is not about seeking to attribute blame to the challenges that couples find themselves in when they separate. I thoroughly agree with that. I am aware that the noble and learned Lord does not press this matter lightly. As we have heard, he has endeavoured to persuade his colleagues at the highest level in government on the proposition that he is advancing today. We should be guided by what is best for children and whether supporting this amendment would make it more likely that they will benefit from maintenance arrangements. We consider that it will, which is why we support it.
I suggest to the noble Lord, Lord De Mauley, that it would be really good if he could accept the amendment, particularly because so many noble Lords from his own Benches have spoken in favour of it. The clear and overwhelming view of the House is that the amendment should be accepted, which would be the right thing to do, without having to reinforce that with what would clearly be an overwhelming vote.
Lord De Mauley
My Lords, I have enormous respect for my noble and learned friend Lord Mackay, which I know all noble Lords, including the noble Lord, Lord McKenzie, share. I am grateful to him for his amendment and to all noble Lords for their contributions. I have listened carefully—and not, I have to say, without trepidation—to the detailed points made by my noble and learned friend and all other noble Lords who have spoken. I am glad that we have also had a debate within the debate about charging.
I emphasise again that the Government’s reforms and particularly charges need to be seen in the wider context. Perhaps I may start by setting out some of the historical contrast. When the Child Support Act was taken through Parliament in 1991 one of its primary aims was to recoup the money that the Government spent on benefits. This was achieved by reducing lone parents’ benefits by the sum that we were able to collect from non-resident parents. Parents on benefits had to use the scheme in order to further this aim. That was a scheme of its time and was set up with the most noble of intentions, namely reforming a court-based system that was not working.
Today we start in a different place. Lone parents no longer have their benefits reduced at all when child maintenance is received and this Government have been proud to announce that we will extend this to universal credit. We have greater ambitions. We see a key part of the reforms as expanding the support for parents to collaborate. We no longer require parents to use the CSA. We do not want it to be the default option. Where they can collaborate, we believe that that is fundamentally better for parents and children. That is why we cannot accept my noble and learned friend’s amendment.
The proposal would set up a system where the state would be obliged to try to arbitrate. We specifically think that that is what will happen if we use the reasonable-steps test, which surely requires some sort of judgment as to whether an applicant has done all that could be expected to reach a family-based arrangement with the ex-partner.
We cannot see any way to collect hard evidence to show that a parent with care had taken reasonable steps without an inappropriate degree of intrusiveness. We do not believe that the state should try to monitor whether a conversation has taken place about collaboration between two private individuals, the parents. We cannot see how to make this work, not least because parents could quite fairly challenge the state’s discretionary decisions, leading to delays in maintenance flowing and acrimony in the system.
Baroness Howarth of Breckland
My Lords, I find that surprising when, on a daily basis, the guardian ad litem in a court case can be expected to make similar sorts of judgments between two people as to whether contact should be awarded to one parent or the other. These are the same families, so surely there must be some way in which this kind of assessment could be made. Indeed, it has to be made because the noble Lord said previously that there would be some discretion in relation to marital violence and child protection. How are those assessments going to be made if no assessment is made at all?
Lord De Mauley
Perhaps the noble Baroness will permit me to come to her specific questions in a while.
My noble and learned friend proposes that this could be handled by allowing a CSA staff member to make what I am suggesting would be a subjective decision, and for that decision to be appealable. I ask your Lordships to consider whether legislation that confers on officials a subjective decision and then asks for an appeal system to police those decisions is the right way forward. It is not the Government’s position that that is the case. It would add to the costs for the taxpayer and complexity for parents and staff. One lesson we have learnt since 1993 is that legislation, with the best of intentions, will not work if it is highly complex or subjective in delivery. This approach with its subjective decisions and appeals again risks conflict, and surely none of that is in the interests of the child.
However, to offer your Lordships some views on the costs involved, we have also looked at an alternative approach to delivering the amendment. This would be based on a self-declaration from the applicant that reasonable steps had been taken. This is obviously a porous test that could be open to false reporting. Even then we estimate that the amendment would increase costs in the statutory schemes by over £200 million to the end of March 2019, making these reforms unaffordable. I hope that my noble and learned friend will therefore understand that, in our view, there is a tension at the heart of the amendment. It applies either a test we cannot police or a test that everyone can pass because we are not able to police it. Further, however the amendment is applied, it undermines the core of why we want to introduce charging. To reform the system and maximise the number of effective child maintenance arrangements, we must have an affordable but clear financial incentive on both parents to collaborate. We discussed in Committee what the noble Lord, Lord McKenzie, also mentioned, which is that the concept of charging was introduced in the 2008 Act.
Parents who can collaborate outside the statutory scheme will be provided with the help and support they require. Correspondingly, an application charge for all provides a clear incentive for parents with care to consider collaboration outside the statutory service, with all the benefits that has for children. Without a financial incentive in the form of an application charge, we risk recreating the CSA caseload we currently have, with parents using it despite ultimately telling us they could collaborate. The evidence is clear that we have a system at the moment where 50 per cent of parents using the CSA believe they could make a collaborative arrangement with the right support.
The ongoing collection charges will promote collaboration both outside and within the statutory scheme, and will create a real incentive in the non-resident parent to pay the parent with care direct, in full and on time. If, under Clause 135, the non-resident parent chooses to use this option, which is known as maintenance direct, neither parent will pay collection charges. Furthermore, the parent with care can be safe in the knowledge that if payments are not made, their case will be brought straight back into the full statutory enforced collection service.
The Government also believe that following the introduction of a demonstrably better future scheme it is fair to ask for a contribution to the costs of what, as I explained in the last debate, is a heavily subsidised service. To reiterate, I mentioned that the cost of a typical CSA case is up to £25,000, and that can rise to £40,000 where we need to take substantial enforcement action. It is a system that on average costs around 40p to move every £1 between parents. Furthermore, we will not start collecting charges until the scheme has been running for at least six months to allow the new system to demonstrate that it is delivering an improved service for parents.
We have had a fairly spirited debate on the principle of charging. However, I hope that noble Lords will reflect on the principles I have described and the assurances I have given. We do not want to return to the days when the state was encouraging parents to blame each other since we know that is the worst thing for children. We have a coherent package of reforms starting from a very different place to the 1993 CSA, and charges have a role to play within it.
I turn now to the questions raised by noble Lords. I shall paraphrase what my noble and learned friend said: “I do not want an adjudication. I just want a test of whether the father will pay”. I accept the intentions of my noble and learned friend, but his plan is for a letter to be sent to the father to ask if he will pay outside the scheme. That would be costly and complex. We have over 100,000 applications each year, and the most difficult element is finding the father. Mothers often do not have the father’s latest address, and often that is not the father’s fault, so importing the trace aspect of the application is costly and complex, and will delay us being able to start to process applications for those who need it most.
My noble and learned friend referred to Henshaw’s intentions. The Government agree that we do not want to dissuade those who need it from accessing the scheme. That is why we are carefully considering the level of the charge. But Henshaw was clear in recommending that charging should be introduced to users of the administrative scheme because it,
“would contribute to the objectives of the new system by incentivising private arrangements”.
The noble Baroness, Lady Howarth, asked a number of searching questions. She referred to the risk of the non-resident parent demanding contact as a condition of maintenance. That is a key part of what we have been addressing and we agree entirely with her. If a case enters the system we will use data, for example, from HMRC. There will be no need to obtain this direct from the non-resident parent. A calculation will be made based on that data and he will be required to pay, if necessary by order on his bank account or from his benefits. There will be no requirement, particularly for victims of domestic violence, to have any contact or to reveal their contact details.
The noble Baroness asked about the people who take the calls. Advisers will be using training which has been developed with the input of a large number of voluntary and community experts. Self-declaration of domestic violence will be sufficient, and no application charge will need to be paid. The noble Baroness also asks who will arbitrate on whether the non-resident parent has to pay. What I am trying to get across is that there will be no need for arbitration. The non-resident parent will have to pay based on the calculation. She intervened to ask about discretionary decisions. As I have said, there are around 100,000 applications each year and the nature and scale of the judgments are issues which, I am afraid, fundamentally flaw the amendment.
I am grateful to my noble friend Lady Berridge for her intervention, and of course I contend that she is absolutely right. I do this with trepidation, but I ask my noble and learned friend to consider withdrawing his amendment.
Lord Mackay of Clashfern
My Lords, I am grateful to all those who have supported me, as well as to those who have spoken but who have not supported me, of whom the number was fairly small. I pay as strong a tribute as I can to my noble friend Lord De Mauley, who, as I said, has been with me at all the meetings in recent times. The noble Lord, Lord Kirkwood, and I had a meeting with the Minister in the Commons, Maria Miller, way back in July. I intimated then, to the highest level of the Government, that I intended to table this amendment, so there is no question of an ambush or anything of that sort.
I re-emphasise that the question that we are debating is whether the non-resident parent will pay maintenance—that is the only question—and the simple way to find out is to ask him. I do not for a moment want to adjudicate on who is to blame for non-payment—that would be idiotic. Apart from anything else, it would be very difficult, just as it will be difficult to police agreements in domestic violence cases unless the Government kindly accept my amendment as a way of doing it. The amendment proposes a very simple, straightforward way of doing it, because, under it, a factor would be whether it was “appropriate” to make a maintenance agreement.
I thank all noble Lords who have supported me, particularly those who have put their names to my amendment. I thank also my noble friend Lord Newton of Braintree, who made it clear in our discussions with the Secretary of State that many of his views were based on constituency representation, of which I have none. Fortunately, three of my ardent supporters have a great deal of such experience.
I regret that I have no real option but to press the amendment. If one is a supporter of a coalition, as I am thoroughly of this one, one has a duty if there is a slight deviation from the norm to do one’s best to bring the situation back on to the correct pathway. It is in that spirit that I invite the House to give its opinion on the amendment.
Policing Protocol Order 2012
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hunt of Kings Heath
That this House regrets that the order has not been subject to a robust consultation process, thereby increasing the risk of politicising policing decisions through a failure to protect the operational independence of the police.
Relevant document: 46th Report from the Merits Committee.
Lord Hunt of Kings Heath
My Lords, noble Lords will be aware of the concerns on this side of the House about the introduction of elected police commissioners and the risk of politicisation of our police forces. Rather like the NHS reforms, the Government are bizarrely set to draw a service up by its roots when it should be focused on meeting huge challenges. At the same time as these changes are taking place we are seeing 20 per cent front-loaded cuts to police budgets impacting on front-line services, forcing the retirement of some of the most experienced officers currently serving and the closure of many police stations. As we see from the latest crime figures, crime against the person has gone up by 11 per cent and there has been a 10 per cent increase in robberies involving knives. It is therefore extraordinary that, at this time of major challenges for our police services, the Government are pressing ahead with arrangements for elected police commissioners.
We have had extensive debates on this issue and I do not intend to go over those matters. It is good to see the noble Baroness, Lady Browning, in her place. She, of course, spent a great deal of time helping your Lordships with the legislation.
The order before us is one of many. The noble Lord, Lord Henley, kindly sent me a letter a few weeks ago containing a list of approaching 20 orders which will need to pass through Parliament in a fairly brief space of time. The reason for the rush is that the Government wish to proceed speedily in relation to London, with elections in the other 41 police authority areas in England and Wales taking place on 15 November this year.
I have some concerns about the implications of the speed with which the Government are pushing orders through your Lordships’ House and the other place. We can see from the report of the Select Committee on the Merits of Statutory Instruments the problem with that in relation to this important order, which embraces, essentially, the relationship between the elected police commissioner and the chief constable. It is clear that such a protocol should receive robust scrutiny. Noble Lords will know that the Merits Committee identified the relatively short timescale in which the protocol had been developed. It considered that a full consultation might have provided a more complete road test of the robustness of the protocols. Will the Minister respond to that point?
I also refer the Minister to the clarification that the committee sought. Appendix 1 of the committee’s memorandum shows the responses of his department. He will note that the committee remained concerned at the possible ambiguity of some of the drafting of the protocol. The Minister may like to comment on that point as well.
As I have said, elections are due to take place on 15 November in 41 police areas in England and Wales. That is not perhaps the best time of year to hold an election, with dark nights and little public interest so far. There is a real fear that the turnout could be low in these elections. The problem of low turnout is undermining the legitimacy of the elected police commissioners. Whatever one’s view of the principal legislation, now we move towards its implementation I am sure that we all agree that a large turnout would be a good thing, so that the police and crime commissioners have as much legitimacy as possible.
The protocol is important because there is real fear that the operational independence of chief constables could be undermined by political interference by police commissioners. The fact is that, whatever the protocol says, if you as a police commissioner have a hire and fire power over your chief constable and overall budgetary control, in the end what use is the protocol? All the levers are really with the police and crime commissioner.
What happens if a police commissioner is elected on a manifesto which has explicit operational pledges? That may be to abolish speed cameras, which the chief constable might believe save lives and are in his or her operational competence. There will be other examples where the election may be fought over what I am sure we would regard as operational issues. The moment a successful police commissioner comes into power on that manifesto, they will expect the chief constable to implement it. The chief constable may resist that and could perhaps point to the paragraph in the protocol that makes it clear that there should not be interference. We have a situation where almost all the power lies with the elected police commissioner, as I have said, with few checks and balances in the system.
The noble Baroness and I have debated at length the powers of the police and crime panels. She made some modifications in terms of the voting that applies to vetoes exercised by the panel. Overall, the powers of the panels are weak. It is really not clear in the protocol how they will enforce a regular check on the performance of the police commissioner, as set out in paragraph 14. I have no doubt that the noble Lord, Lord Henley, will say that that is surely a matter for the panels themselves. Given that the police and crime panels have so few levers, I would have thought it helpful to outline in some detail the powers that the panels might have to check on the performance of the police commissioner.
One of my fears about the new system is that chief constables will be subject to greater insecurity in their jobs and that we will tend to have a rapid turnover of them at the hands of police commissioners. We know that that happens in the US, which is where the idea came from. I know the health service rather better than I do the police service. I know the problems that have arisen when you have such a rapid turnover of chief execs. At one point there were so many restructurings—I am afraid that both parties have been responsible for that—that you had the ludicrous situation of the average chief executive spending no more than two years in the job. That does not create stability. My concern is that, in the run-up to a re-election for a police commissioner, the temptation will be very present to pick a fight with the chief constable and sack them.
I also raise the point raised by the Merits Committee on paragraph 3.1 of the Explanatory Memorandum. This is about the fact that the protocol is not drafted in legal language. That point was raised by honourable and right honourable Members in Committee in the other place when it considered the protocol. If the protocol is not drafted in legal language would it stand up in a court of law? The Minister might wish to comment on that.
Finally, in bringing this matter to the attention of noble Lords, I know that it is the intention of the Government for the protocol to be reviewed. Would the Minister commit to reviewing this after a period of 12 months—at the end of 2013—so that it can be done in the light of the first year of experience of relationships between elected police commissioners and chief constables? He may say that a system needs longer to bed down but, in view of this being—for me—the most important aspect of the whole architecture of the new policing system, it would provide considerable reassurance if the Government agreed to a review within very quick time. I beg to move.
Baroness Browning
My Lords, since the House viewed and debated the draft protocol, we now have in front of us the instrument, which has been subject to further consultations. I am very aware that the decision to put it on a statutory basis was influenced by representations made by Members of your Lordships’ House.
The consultation that has continued since the Bill became an Act has of course included the Association of Police Authorities, the Association of Chief Police Officers and the Association of Police Authority Chief Executives. We can be confident that those who really have a vested interest as well as a professional interest in what is in the protocol have continued to have an input into the document we see before us. Those important relationships, which your Lordships’ House has discussed in some detail on more than one occasion, between the chief constable, the PCC, the panel and not forgetting the Home Secretary have been laid out with clarity rather than prescription. I do not think it was ever the intention to prescribe through this document.
Those individual responsibilities and their inter-relationship are extremely clear in this statutory instrument. I clearly heard what was said about it not being in legal language. I am sure the Minister will reassure us in terms of any legal challenge. On reading it, I thought it was rather refreshing. Please God that more statutory instruments appear in language that we can read and understand on first reading. I hope that the Home Office will submit this document for the Plain English Award this year. That would be a first for a government department. I commend that suggestion to the Minister. It is very important not just that those who have to enact this understand it but that the wider public, too, can feel that it is something they can see, read and understand.
Briefly, because the House does not need me to read out the instrument before us, I recall clearly that one matter of great concern was the operational independence of the chief constable. I believe that the language used here clarifies the responsibility of the chief constable for maintaining the Queen’s peace and having direction over the forces, officers and staff while at the same time not going into that prescriptive detail that would quite clearly hamper the activities and freedom of the chief constable to take those operational decisions. That very important point has been well measured and found in the document.
I remind the House that police and crime commissioners have a statutory duty and electoral mandate to hold the police to account. All too often it has been the Home Office that has, from on high, sought to do that. This moves the responsibility down to a much more local and operational level. That democratic mandate brings policing so much closer to the people who are being policed while at the same time reminding us through the appropriate section that the Home Secretary still has and may at times need to use reserve powers with regard to policing.
The role of the panel, which we have debated in some detail on many occasions and on which the Government made considerable concessions when the Bill was before your Lordships' House, is very important. I am sure that in practice it will come to be seen as a very important role in holding police and crime commissioners to account.
I commend this protocol. A good job has been done here. I know that my noble friend the Minister will ensure that where and when necessary, with the appropriate consultation, the protocol will be a living document that will be amended as necessary as the years go by.
Lord Dear
My Lords, when I spoke at Second Reading of the Police Reform and Social Responsibility Bill on 27 April last year, I described the Bill as a crucial step towards a thoroughly modernised police service. I did not say that the Bill would in itself produce that; I described it as a crucial first step. As we all know, the issue of PCCs was an essential element in the Bill. In fact, one could well say that it was the essential ingredient in that Bill, especially in so far as handling police finances and, even more importantly, the operational independence of a chief officer or interference with that.
We all remember and understand the difficulties that we had when Clause 1 was voted off the table, as it were, in Committee, and the difficulties that we had in discussing the role of PCCs in that environment. It was a lengthy and very detailed series of debates, and I will not go into them. They are fresh in our memories. But it became very obvious as we went through that series of debates that there was a need for a protocol to flesh out the detail behind what we meant by some of those terms. I personally welcome it and speak in support of it tonight.
After the General Committee debate, which took place two days ago in the other place, I ran off 23 pages of that debate on my computer and could not find a single word that passed any comment to say that the consultation process was less than robust. The Committee preoccupied itself very much with trying to tease out a definition of proper or improper political interference, which comes very close to what we are talking about tonight. But I could find no trace of any disquiet there about a lack of proper consultation. Indeed, the consultation has involved all the three existing major players; it cannot obviously go to PCCs as they do not exist yet—they have not been elected. But it involved ACPO, the Association of Police Authorities and the Association of Police Authority Chief Executives. I cannot think of anyone else that it could have gone to, and certainly ACPO is satisfied with the procedure and believed that its views were put forward in adequate fashion. I think—although at second hand, and I am subject to correction at this point—that the other two agencies felt very much the same way. So with the greatest respect, I disagree with our own House of Lords Select Committee on the Merits of Statutory Instruments, which said in paragraph 3 of the report:
“Given the constitutional importance of the governance of the police service, the Committee considers that a full consultation might have provided a more complete test of the robustness of the Protocol”.
With the greatest respect, I disagree.
Lord Imbert
My Lords, you will be relieved to know that my contribution on the Motion will be very brief. I am grateful to the noble Lord, Lord Hunt of Kings Heath, for having secured the time for this debate. I will not go over the ground that he so ably and wisely covered. Suffice it to say that every effort must be made to maintain the global reputation of the British police for being the world’s leader in impartial policing, without fear or favour—no matter the colour of a person's skin, their origin, political beliefs or station in life.
So far as the consultation on the protocol for policing is concerned, I repeat the comments that I made when the matter was debated in your Lordships’ House many weeks ago. We had been assured and reassured, right from the time when the police reform Bill was introduced, that the fear that the election of police and crime commissioners could be hijacked by political extremists was without foundation. Yet we now find that the Government have had second thoughts, and we now have a protocol setting out the boundaries within which the chief constable and the police and crime commissioner will work. I congratulate the Government on their political courage and good sense in accepting that, perhaps after all, such a protocol is necessary to ensure that a maverick PCC or, indeed, chief officer does not upset the essential balance required for the continued good governance of policing, and that the chief constable's traditional pursuance of non-political, impartial policing is preserved.
I support the regret Motion moved by the noble Lord, Lord Hunt of Kings Heath, but if I may, I will finish with one plea. My final comment is to ask that the Home Office finalise the financial management code—as he who pays the piper calls the tune. I trust that this code, after proper consultation, will help to curb any misunderstandings over financial responsibilities and control for all the stakeholders in this new governance structure.
Baroness Hamwee
My Lords, I was a little surprised when I saw the terms of the Motion because having lived through the Bill, as other noble Lords did, it seemed that the issue of a protocol was consulted almost into the ground. However, I realise that there may be a distinction between consultation on the content of the protocol and consultation on the statutory instrument. I should fess up; I am a member of the Merits of Statutory Instruments Committee, but I was not there on this occasion. That committee is always particularly sensitive to the need for consultation alongside there being adequate time for Parliament to consider an order before it comes into effect, so I can understand how this arose.
I wondered whether it may have been that the complaint was not about the time spent on consultation but about the fact that the consultees had not come from a sufficiently wide group of people. I am not sure that it could have been different at the time that the work was going on last year, but the landscape will change. There will be more players in place, and I for one am reassured by paragraphs 43 and 44 of the protocol. Paragraph 43 refers to,
“periodic review, in particular during the first term of office of the first PCCs”.
The noble Lord, Lord Hunt, has suggested that that should be a quite early review. That would be useful, because we will then see in office not only the commissioners but the police and crime panels. Police authorities have taken part in the consultation but the police and crime commissioner—I emphasise “crime”—has a wider remit than simply the policing function. I would like to see local authorities, possibly through the panels but in their own right, involved in any further consultation that might take place.
As has been said, this started as a concern about what was meant by “operational”. As I understood it from the fringes, there was endless drafting and discussion involving those who were most concerned about it. I heard one of those individuals say that by the end of it he wondered whether there was any need for a protocol at all. However, we have a statutory protocol and, as the noble Baroness has said, that was because there was such a call for it in the House. We are in an interesting position; we have something of a narrative in the order, which is almost a plain English guide to the statute. Regard has to be had to the protocol, but perhaps the Minister can give the House some assurance this evening as to the status of the protocol as against the statute. I assume that the statute must override it if there is any conflict, but I am not suggesting that I have seen any conflict.
As I read this, the protocol deals not just with “what” but with “how”. That comes not only from the protocol itself but from Section 79(6) of the Act, which says in the definition of policing protocol that it is a document that makes provision for,
“ways in which relevant persons should … exercise, or refrain from exercising, functions”.
So that has a purpose of its own as well.
The Minister of State, Home Office (Lord Henley)
My Lords, I appreciate that the motivation of the noble Lord, Lord Hunt, may be a fear of the democratic mandate that the PCC will have but, having said that, I am grateful to him for giving us the opportunity both to have a break from the Welfare Reform Bill and, far more seriously, to consider the finer details of the policing protocol which, last summer and autumn, this House argued was a necessity to secure the operational independence of the police service.
I pay tribute to my noble friend Lady Browning, who took the Bill through this House. We are all grateful for everything that she did then. May I say how grateful I am for the chance to hear her today and how much I wish it were she who was still standing at the Dispatch Box to argue this case? Still, I shall do my best to live up to her standards in dealing with the various questions.
I echo the words of the noble Lord, Lord Imbert, when he said that—I hope that I have his words down correctly—we must do all we can to maintain the worldwide reputation of the British police. Yes, that is our aim and it is what was behind the Act as it went through Parliament, which is why the protocol is so important and why we are grateful to the noble Lord, Lord Hunt, for offering us the opportunity to debate it on this occasion.
The noble Lord put a number of questions to me. I counted up to seven; I might have got that wrong, but he will no doubt intervene if I do not deal with all the points that he made. First, he echoed the Merits Committee’s complaints about a lack of consultation, and I will get to that in due course. I noticed those wonderful words from the noble Lord, Lord Dear: it was with “the greatest respect” that he disagreed with the Merits Committee. I have a great deal of respect for that committee—we created it in the run-up to the 1997 election, it is a great committee and we always take its views with great respect—but I also note that when someone says that they disagree “with the greatest respect”, they are disagreeing in pretty strong terms, and I am grateful to him for that.
I also note what the noble Lord, Lord Hunt, had to say about the Merits Committee’s view about the ambiguity of some of the wording, and I will get to that on his sixth point, which was about the protocol not being drafted in legal language and whether it will stand up in court. Again, I was grateful for what my noble friend Lady Browning said about how grateful she was that it had been put in plain English. I assure the noble Lord that the courts are pretty good at interpreting things when they are in legal language, but I am sure that if necessary they are equally good at interpreting things when they are in plain English.
On that small point, I assure my noble friend Lady Hamwee about her interpretation of which came first—the statute or the protocol—that the courts would always have to take the statute first, should there be any disagreement between the statute and the protocol. As my noble friend pointed out, though, there will be no problem.
The noble Lord, Lord Hunt, talked about problems with the turnout for November elections. As he will remember, one of the reasons why they are happening is the delays, possibly those caused in this House, that meant that we had to push back that date, but I am sure that we will still have a very good turnout in due course.
The noble Lord spoke of the fear of undermining the operational independence of chief constables—again, that is something that I will get to as I deal with these matters—and about the fear of greater insecurity for chief constables. The noble Lord’s seventh point was again on the question of whether it would be appropriate to have a review in due course, and I hope that I will deal with that in my remarks.
I shall start with what was probably the noble Lord’s fourth point: operational independence. We have always been clear about our commitment to the absolute preservation of operational independence. As my right honourable friend made clear in the debate in another place, that is not something that can be defined in law but it is a cornerstone of policing in this country. That commitment has been made both here and in another place on a number of occasions.
I turn to the consultation process itself, which seemed to cause concern to the noble Lord, Lord Hunt, although, as the noble Lord, Lord Dear, put it, it did not seem to cause concern in another place, nor does it seem to have caused concern to anyone else here other than the Merits Committee. Again, though, with the greatest respect I suggest that the committee is wrong; as my noble friend Lady Hamwee put it, it has been consulted almost to death.
The order was not drafted in isolation. It relied heavily on the active engagement of the Association of Police Authority Chief Executives, the Association of Police Authorities and the Association of Chief Police Officers, the former Deputy Commissioner of the Metropolitan Police Service, and the deputy mayor for policing and crime and his chief executive in their former capacities as chair and chief executive of the Metropolitan Police Authority and the Greater London Authority itself. I have no doubt that once police and crime commissioners are elected, there will be a need to seek their views on the protocol, but I stress that this document was issued by my right honourable friend the Home Secretary and it therefore reflects her interpretation in the context of the Police and Social Responsibility Act of how the policing landscape should operate effectively. The protocol that we have now had the opportunity to debate and consider is the result of determined negotiations between all those stakeholders, who have a broad range of robust views on operational independence. It is obvious to me that such a range of opinions also extends to debates in another place and to those in your Lordships’ House.
I appreciate that the noble Lord—I think this was his seventh point—would like to see a further review of that protocol before the end of 2013. My right honourable friend in another place gave no firm commitment about a review date, but he said that the Government would consult the PCCs although, as the noble Lord, Lord Dear, made clear, we cannot do so until they exist. However, he also stressed that the protocol, issued by the Home Secretary and setting out her expectations of the formal landscape, will enable the public to understand the respective roles and responsibilities of all parties. That process is obviously open to review in the future but no firm date can be given.
Thinking again about the wording of the Motion in the name of the noble Lord, Lord Hunt, who talks about the lack of a “robust consultation process”, I would also make it clear that this process has not been rushed in any way. We placed in the Library of the House a draft protocol, in which my noble friend Lady Browning invited Members from all sides of the House, whom she later met, to discuss the text. She then acted on the comments that she received. That engagement with Members of the House would not have been possible without the open—at times frank—approach that she took in reaching out to all sides on a matter in which I know she is considered to be above her colleagues. My ministerial colleagues in the Home Office and I are very grateful to her for continuing that process.
I think these numbers relate to the fourth and fifth questions about undermining operational independence and fears of greater job insecurity. I shall say just a little more about that matter for the benefit of the noble Lord, Lord Hunt. As he reminded us, further orders will come before this House so there might be opportunities for other debates on the affirmative Motions and, no doubt, on some of the negative Motions that the noble Lord will seek to find means of debating as well. One of the key themes that has run through the numerous debates that we have had so far on the matter of operational independence and the safeguarding of the officers responsible is the fact that it is very difficult, as my right honourable friend made clear in another place, to define what operational independence is.
Primary legislation and common law provide some clarity on the legal principles that underpin the operational independence of the office of chief constable. For example, Section 29 of and Schedule 4 to the Police Act 1996 require members of police forces to be attested as constables on appointment and set out the wording of the declaration that they must make. Case law sets out the important principles that constables act as officers of the Crown in carrying out their duties, but are not to be regarded as servants of any executive authority, and exercise their powers independently at their own discretion. If the noble Lord wanted, I could cite case law going back to 1611 on that issue. I see that he shakes his head and does not require it at this moment. It also sets out the duty on chief constables to secure the preservation of the peace and uphold the law in their areas in the way that they see fit.
Therefore, striking the right balance in setting some clear boundaries within which we expect the day-to-day relationships between the key parties—that is, the PCCs and chief constables—to operate has been a key point of negotiation. I was grateful for the remarks of the noble Lord, Lord Dear, when he talked about there being possible tension on those occasions but that tension not necessarily being a bad thing. I think my noble friend Lady Hamwee described it as a creative tension. I forget the precise wording that the noble Lord, Lord Dear, used; I think it was “constructive tension”. However, I think we would all agree that tension can exist without being a bad thing on those points.
I hope that such assurances, including those of people such as the former Commissioner of the Metropolitan Police and his deputy, who endorsed the protocol alongside ACPO, the Association of Police Authorities and the Association of Police Authority Chief Executives, will be sufficient to remind the noble Lord that we have got the boundaries right. The protocol is written in plain English, which seems to disturb him, but perhaps I will hear on another occasion that he prefers them to be written in another manner. I am certainly satisfied that, in setting those boundaries, there remains enough flexibility in the protocol for it to be the starting point for a much more detailed and public-focused discussion of how to reduce crime and how to make sure that we get the policing service that we want and one that, as the noble Lord, Lord Imbert, put it, maintains its reputation of being one of the best in the world.
I hope I have dealt with all the points put by the noble Lord, Lord Hunt, and those raised by other noble Lords. If I have not, I will write to noble Lords in due course.
Lord Hunt of Kings Heath
My Lords, I thank the noble Lord, Lord Henley, for his response to this statutory instrument debate and his assiduous attention to detail, which we all welcome. The noble Lord, Lord Imbert, put it so well when he talked about the reputation of the British police, which is of course a matter of concern to us all.
The Merits Committee has come in for a little criticism. Perhaps I ought to point out that the history of the noble Lord, Lord Henley, is a little misshapen. I remind him that the Merits Committee was set up after the Wakeham royal commission recommended such a committee, and it was under the auspices of a Labour Government that that royal commission was established. I had the honour of being the first chairman of the committee. I think the point that the committee made was in the context of the London situation. The Government are rushing all these orders through because they want to implement the Bill in London in double-quick time. The problem with that is that it gives less time for the general consultation and process to be undertaken in relation to the orders. Already, I see that the Merits Committee has reported on another order, the Elected Local Policing Bodies (Specified Information) Order 2011, which we will no doubt consider in due course. It is a pity that there has not been a little more time to consider these in general.
The noble Lord, Lord Henley, is able to reassure the House about the operational independence of chief constables. All I say to him is that when the police commissioner has both hire and fire powers and powers over budget, his or her abilities to delve into the operational matters of the chief constables will be legion. We will have to see. I welcome what he said in relation to a review—that the Government could not say when such a review would take place. However, it would be better—I am grateful to the noble Baroness, Lady Hamwee, for her support on this—if such a review was undertaken as quickly as possible.
On the question of language, of course I welcome plain English. I agree that the protocol is very well written. The specific question was whether it could still be used in court. The point made by the Merits Committee is that the protocol was not written in usual legal language. That was the point that I put to the Minister. He reassures the House that he does not think it will be a problem. I am not sure that the courts are used to dealing with plain English, so perhaps it will be a challenge for them.
On the question of turnout, it was a bit rich for the noble Lord to say that it was all your Lordships’ fault that the election would take place in the dark nights of November. The Government had another choice; they could have brought it in next May. Not only would that have given your Lordships and the other place a little more time to consider these orders in some detail, but we might have been able to knock on doors in the evening in daylight. As it is, the Minister feels that there will be a good turnout. I certainly hope so and we all have a responsibility to do all we can to encourage a high turnout. However, a November election will not necessarily encourage that.
This has been a very good debate and I thank all noble Lords who have taken part. I beg leave to withdraw the Motion.
Welfare Reform Bill
(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
“(3) Any such steps taken under subsection (2A) should be consistent with any advice relating to child poverty provided by the Social Mobility and Child Poverty Commission.”
Baroness Hayter of Kentish Town
My Lords, we form a select few still in the Chamber. I remind noble Lords that the Child Poverty Act 2010, which established the Child Poverty Commission, was passed with cross-party support. We believe that there is now similar support for the proposal to expand its remit to deal with social mobility. We welcome that move. However, our Amendment 62F seeks to ensure that the commission has a duty, an obligation and a right to advise Ministers so that the fruits of its expertise, research, understanding and work are put at the heart of decision-making. This is not to replace the Government’s role in decision-making but to input at the appropriate level into the intelligence available to the Minister, as strategies to tackle child poverty are developed and implemented. Amendment 62CZA seeks to ensure that the child maintenance and enforcement policies similarly do not fly in the face of objective, evidence-based advice. The Child Poverty and Social Mobility Commission may be a very valuable think-tank, academic centre of excellence and great publishing venture but without this duty to advise it will not be guaranteed a voice in Whitehall.
We naturally warmly welcome the Government’s Amendment 62JA, which appears to meet our request in Amendment 62K, and which enables Ministers to provide the commission with any resources, including research, which Ministers think are required for it to carry out its functions. Perhaps the Minister will confirm that this will enable the commission to request research directly where it believes that there are important gaps in the data available to it. Will the Minister also outline what might happen if the commission believes that such research is necessary but the relevant Minister does not? While we are delighted that the Government have seen the need for such research, it would be useful if the Minister could also say when exactly he expects the new commission to be established, as we need its input. These amendments are needed to strengthen the role of the Child Poverty and Social Mobility Commission. Amendment 62F is central, not an add-on, to the work of the commission. It would restore the duty for the commission to give advice to Ministers on the preparation of their strategy. The DWP note states:
“The Government believes that policy development should be the responsibility of Ministers … and should not be delegated to arm’s length bodies. The Commission’s current advisory role inadvertently provides a route for Ministers to avoid accountability if the Strategy proves ineffective by shifting responsibility to the Commission”.
It goes on to state that the commission will henceforth only be able to give advice on technical issues around the measurement of poverty and social mobility.
We welcome the strengthened accountability whereby the annual report of the commission will report on progress towards the target. Far from being incompatible with the commission providing advice on the strategy, part of that advice comprises being able to input into Ministers’ thinking on matters beyond just technical issues around measurement. A serious commission with quality members and staff will be hard to establish if it is denied the existing duty of advising Ministers. What, after all, will be the point of it as opposed to having this work done by a university department? There is no chance that Ministers would simply delegate development of a strategy to an unelected commission. It is clearly Ministers on whom the ultimate duty to eradicate child poverty falls, and who will be answerable in this House and elsewhere for the success of that strategy. Placing on the commission the duty to give advice to the Government would strengthen its role and status, allowing it to provide the independent scrutiny, intellectual challenge and source of expertise that were envisaged in the original Child Poverty Act, which passed with cross-party support. I beg to move.
Baroness Lister of Burtersett
My Lords, I rise briefly to support the amendment of my noble friend Lady Hayter. However, her case was made on the assumption that the commission will have expertise. The original requirement that commissioners must have expertise relevant to the work of the commission has been taken out by this legislation. Apparently, the Government have argued that, because the commission will be a reviewing rather than an advisory body, the expertise requirement is no longer needed in the schedule. However, as End Child Poverty points out, this makes no sense. Reviewing requires just as much expertise as advising.
I should therefore be grateful if the Minister could give a rather better explanation as to why that provision has been taken out, because it is in danger of weakening the commission. I understand that the commissioners will be appointed through the non-departmental public body appointing process. Can the Minister explain how the process will work in this instance? What type of expertise do the Government believe is necessary for the commission, taken as a whole, to have? How will the NDPB appointment process ensure that the commission has such expertise? We are of course talking about expertise on both child poverty and social mobility. It is perhaps also worth considering not just traditional academic forms of expertise but the expertise born of experience.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, at the start of these two groups of amendments on the child poverty commission, I want to make it clear that this Government are absolutely committed to tackling child poverty. Our child poverty strategy, published in April last year, set out the package of reforms that we are implementing to ensure that no child faces a life trapped in poverty. As part of this, we want to create a new and more powerful commission that can assess the progress made as reforms are implemented.
Amendment 62F seeks to ensure that the commission continues to provide advice to the Minister as to how to eradicate child poverty. As noble Lords are aware, the new Social Mobility and Child Poverty Commission differs from the original child poverty commission in a number of important aspects. First, it will have a broader remit that will encompass social mobility as well as child poverty. Secondly, it will for the first time have the power to publicly assess government progress. The previous child poverty commission’s role was simply to provide advice to government. The new commission is required to produce an annual report that assesses whether the Government are taking the steps that they said they would in their strategy, and it will therefore have the opportunity to hold the Government to account for the steps that they are taking and point out where they are falling behind. This will ensure that Ministers are still responsible for developing the strategy, as is right, but that there is external examination to ensure that it is being implemented.
Finally, the commission will no longer play a direct role in the development of the Government’s child poverty policy. This third change is crucial if we are to maintain our commitment to ensure that unelected public bodies are not established unless there is a clear need for their work to be carried out independently of government. This is one of the three key principles of the review of public bodies carried out by the Government last year. It is the role of the Civil Service, directed by Ministers, to develop policy. This is not a job for external bodies.
We cannot justify establishing a public body to provide advice when there is already a wide variety of ways in which government can access such guidance. Indeed, many of the organisations that we might expect to see represented on such a body provided recommendations on the current child poverty strategy via our extensive consultation exercise. Giving a single public body a statutory power to provide advice to government on child poverty policy also risks undermining ministerial accountability. It offers a degree of scope for Ministers to shift responsibility for their policy to an external body. When publishing its report each year, the commission will have the opportunity to advise the Government on steps that they should be taking to implement the strategy. As an independent body, the commission would be able to respond to government consultations and put points to Ministers, alongside other organisations with an interest. It is a fundamental principle of this Government that Ministers are accountable for the policies and strategies they put forward. Therefore, while we will continue to consult widely on this policy area, we do not believe that the commission should be given a special, statutory role in providing advice.
I can tell the noble Baroness, Lady Hayter, that we are committed to establishing the new commission as soon possible, once the necessary legislative changes are made. That means, given that I need to define “as soon as possible”, that as soon as the amending legislation has been passed we will begin to put the new commission into place.
If the commission thinks research is required but the Minister does not, whether or not a particular request is granted will be a matter for private discussion between the Government and the commission. The commission will be able to request research directly; there is provision for it to do that.
On the issue of the expertise on the commission, raised by the noble Baroness, Lady Lister, we intend that it have the appropriate balance of expertise in child poverty and social mobility and we agree that a commission without specific expertise in these areas would not be effective in carrying out the functions set out in the Bill. How will we conduct the appointment process? All members of the commission, including the chair and the deputy chair, will be appointed using a fair and open recruitment process which meets the standards required by the office of the Commissioner for Public Appointments.
Baroness Lister of Burtersett
I am sorry to interrupt, but I also made a point about expertise born of experience. I sat on the Commission on Poverty, Participation and Power, half of whose members had experience of poverty. It was one of the most rewarding experiences of my career, because the insights of those with experience of poverty were such that I could not bring to the subject. Will the Government be open to such expertise?
Lord Freud
Yes, my Lords. I hope that I was making clear that our intention is to get people who are experts in the area. It is hard to overspecify what that means, but people in that category could provide a powerful insight. I am not going to write the job spec in detail tonight, but clearly those would be attractive sets of experience for the commission.
Amendment 62CZA would require that any steps taken in relation to collecting child support maintenance should be consistent with advice given by the Social Mobility and Child Poverty Commission. I will stick precisely to the point in relation to the commission rather than straying back into some of the discussions we had earlier this evening. Our view is that the commission should not be involved in developing policy. From that it follows that we do not think that it should develop policy on child maintenance. That is something for which Ministers alone should be responsible—or perhaps responsible for alongside the House of Lords.
Moreover, where payments are reliable and regular, child maintenance provides parents with care with a separate income stream that may improve the lives and life chances of some children in or near poverty. We have concluded that child maintenance payments are estimated to have a small, non-reportable impact on the number of families living in relative income poverty as currently measured and with current data sources.
Amendment 62JA, the government amendment, and Amendment 62K, would both create an explicit provision in the Bill for the Government to carry out research at the commission's request if it so wishes. We addressed that issue briefly in Committee. I gave assurances that having that provision in the Bill is unnecessary. The Bill already enables Ministers to provide the commission with any resources, including research, which Ministers think are required for the commission to carry out its functions. However, given that the issue has arisen again, we decided to table an amendment to allay any remaining concerns. The government amendment provides that Ministers have the power to carry out or commission research at the request of the commission if they so wish.
Before I ask the noble Baroness to withdraw the amendment, I make it clear that the Government do not consider any of the amendments consequential. I commend Amendment 62JA.
Baroness Hayter of Kentish Town
I must respond to the Minister’s reiteration of the Government's commitment to reducing child poverty. He will be aware that I shall therefore quote from the IFS study and its prediction that the number of children in poverty, having fallen to its lowest level for 25 years, will, under the coalition Government’s policies, rise to its highest level since 1999-2000 by 2020, at which time one quarter of all children will be poor. We of course look to the Government to prove the IFS wrong by making sure that that prediction does not come true.
I am interested that it is the move to get rid of quangos that has led to the desire to remove the word “advice”. I think that that is wrong. In addition to needing expertise, on which there is some agreement, the commission needs authority to be able to advise ministers. That is not policy-making; it is an input into policy. Describing its advice as being alongside other bodies devalues it, but the Minister has said that he wants this to be a more powerful commission. If that is the objective, clearly, we support it. We like the change of name and remit. I hope that he can hold to that in setting it up. I guess the great bribe to us this evening, having been told that it would be set up when the Bill was through, is for me to sit down as soon as possible and enable the Bill to be enacted so that the commission can be set up.
I hope, however, that even if the word “advice” will not be there, Ministers and future Ministers will take the output of the commission extremely seriously as they develop policy, not simply in the implementation of it. With that, I beg leave to withdraw the amendment.
Lord Freud
“Review of fees regulations
In section 6 of the Child Maintenance and Other Payments Act 2008 (fees), after subsection (3) there is inserted—“(3A) The Secretary of State must review the effect of the first regulations made under subsection (1).
(3B) The review must take place before the end of the period of 30 months beginning with the day on which those regulations come into force.
(3C) After the review, the Secretary of State must make and publish a report containing—
(a) the conclusions of the review, and(b) a statement as to what the Secretary of State proposes to do in view of those conclusions.(3D) The report must be laid before Parliament by the Secretary of State.””
Lord De Mauley
“Standards of decision-making
Section 81 of the Social Security Act 1998 (reports by Secretary of State and Child Maintenance and Enforcement Commission) is repealed.”
Lord De Mauley
My Lords, government Amendments 62D and 67A deal with the requirement on the Secretary of State and the Child Maintenance and Enforcement Commission to prepare reports on the standards achieved in making decisions which may be appealed to the First-tier Tribunal. The duty was introduced in the Social Security Act 1998, and only three reports have been laid before Parliament since then. The reports have added little to drive for change within the department to improve standards in decision-making and they have not generated any debates or wider public interest.
In the past, publication of the report has been fraught with delay because of National Audit Office concerns over the quality of data. The department does not directly collect data on decision-making for the majority of the benefits that it administers and the best data available that would be used for this report are already in the public domain. The data which are publicly available include the monetary value for error figures for most Jobcentre Plus-administered benefits. Similarly, CMEC publishes its accuracy statistics every quarter in the publicly available quarterly summary of statistics. Accuracy figures for benefits formerly administered by the Pension, Disability and Carers Service used to be published in the PDCS annual report and will in future be published in the DWP annual report and accounts. Her Majesty’s Courts and Tribunals Service is also already publishing its statistics quarterly, including receipt and disposals by benefits types, outcomes of appeals and outstanding caseload. The report referred to in our amendment does not therefore add anything to the sum of knowledge. It will only duplicate the publication of data that are already in the public domain. To produce further new data in support of the report would add a substantial and unnecessary administrative cost and process for very little gain.
Our commitment to improving the quality of decision-making is met in other more effective ways. The department is working closely with HM Courts and Tribunals Service in the joint appeals taskforce to improve standards in decision-making and, as a consequence, reduce the caseload of appeals. Within the department, Jobcentre Plus has introduced the new national checking team, which was rolled out nationally on 31 October 2011. This is in response to a commitment to the Public Accounts Committee to extend the existing independent checking teams deployed in the Pensions, Disability and Carers Service. Its accuracy support teams are already deployed to measure attendance allowance, disability living allowance, state retirement pension and pension credit. The checking teams will examine the end-to-end benefit process, covering all aspects of delivery and focusing on improving overall standards. The aim of the checking teams is to identify performance improvement, not to meet number targets. The current NCT is covering IS and JSA new claims and will expand in due course to cover existing IS, JSA and ESA claims. The full national checking team will be in place by the end of June 2012.
On balance, in the light of all the department’s other activities, I do not believe that, even if further resources were to be expended, the reports would provide any additional information leading to substantive improvements that are not already being addressed, for example, through work by the department with HM Courts and Tribunals Service to improve decision-making so that there are fewer appeals, taking note of feedback from the tribunal judiciary and training for decision-makers. We know that critical to the success of welfare reform will be the quality of the assessment and the quality and standards of decision-making. A substantial amount of work has been carried out to ensure that that will be the case. For example, for the new personal independence payments we will be thoroughly testing our processes before implementation in a model office, enabling us to see how they affect the administration of the benefit.
We will start with a phased introduction to new claims only until around the autumn of 2013. While we recognise that this will be only a short period of testing the assessment and its associated processes will remain living tools well after implementation, and we will continually monitor and evaluate them. Perhaps I should also remind noble Lords that we tabled an amendment that will require us to conduct two independent reviews into the assessment criteria and processes and that the first report must be made available to Parliament within two years of the implementation of personal independence payment. The same applies to changes to child maintenance under Amendment 62CA, which ensures that we will report back to Parliament with a review and conclusion based on the review within 30 months. That reflects our belief that we have the right approach and we will evaluate it to ensure that that is the case. The department is currently developing an approach to the evaluation of universal credit which will address the key aspects of universal credit delivery and implementation.
I assure your Lordships of the department’s continuing commitment to improving standards. I reiterate that I do not believe that this statutory requirement provides any additional benefit, so we wish to repeal this duty. However, our commitment to improving the quality of decision-making and transparency will not diminish. With those reassurances I ask noble Lords to accept Amendments 62D and 67A.
Lord McKenzie of Luton
My Lords, I thank the noble Lord, Lord De Mauley, for that extensive introduction to the amendment. The effect of it would seem to be to remove CMEC’s duty to report on decision-making standards. The Government judge that this statutory duty provides no particular benefit: first, because the majority of the data is already in the public domain; and, secondly, because the reports have not generated any debate or wider public interest. When the noble Lord introduced the amendment, something he said about difficulties with NAO data rang a bell. There are historical issues around that, which I understand and acknowledge.
I have two questions. If the majority of the data is already in the public domain in other forms, what is included in the minority of the data that is not, and therefore that might be missed? Secondly, the noble Lord went through an extensive list of benefits that might be affected. I would like to be clear about this. The amendment removes Section 81 of the Social Security Act 1998. That covers a range of appeals covered by Chapter 1 in Part 1 of the Act, which will include appeals other than those relating to CMEC. Of particular interest are the data on appeals outcomes in relation to ESA, which have been a particular bone of contention. The statistic that 40 per cent of appeals are successful—I think that that is roughly the latest position—has driven a focus on the process. I would like to be clear about this. Perhaps the Minister will expand a bit on the range of benefit appeals that the amendment seeks to cover.
Lord De Mauley
I wonder whether the noble Lord would mind awfully if I wrote to him.
Lord McKenzie of Luton
My Lords, that would be fine, as long as the noble Lord will concede that if we feel, following that and having read the record, that anything is unresolved, we will bring it back at Third Reading—within the rules, I hasten to add, as the Chief Whip is sitting alongside him.
Lord De Mauley
My Lords, I am now informed that there will be nothing in future reports that will not be available elsewhere. At least that answers the noble Lord's first question. Perhaps an answer to the second is coming.
Lord McKenzie of Luton
My Lords, I am happy to have the answer in writing, as long as we can have it a decent time before Third Reading. That would be very helpful.
Lord De Mauley
My Lords, there has been much talk of the cavalry this evening, and mine has now arrived—at least it would have if I could read it. Decision-making in both the department and CMEC will be repealed. This will cover all benefits. Does that help the noble Lord?
Lord McKenzie of Luton
I think that it may, if I understand the scope of it. Does it mean, for example, that the data that we get relating to appeals and ESA—I cannot off the top of my head remember how those data get into the system—will be included? That is a very important statistic and is likely to remain so. If it will be taken out by the amendment, how else will it be covered, and how will it flow through into the public domain?
Lord McKenzie of Luton
My Lords, I am happy to leave it there for the moment. However, I will read the record. I would like to understand how the data become publicly available and whether the amendment will preclude them being made available by this route.
Lord Adebowale
“Condition relating to mental health
In section 8 of the Welfare Reform Act 2007 (limited capability for work), after subsection (4) there is inserted—
“(4A) Regulations made under subsection (1) shall provide that a person assessed as suitable for employment and support allowance by virtue of his mental condition but not currently receiving treatment from a mental health provider service shall be immediately referred to an appropriate mental health provider service and the prime provider shall then ensure that the person is already receiving or now receives suitable mental health employment support.
(4B) The Secretary of State shall issue guidance on what constitutes an appropriate mental health provider service and suitable mental health employment support for the purposes of subsection (4A).””
Lord Adebowale
My Lords, at this late hour I will try to be brief. The noble Lord, Lord Layard, who put his name to the amendment, apologises for his absence; he is at Davos. I am aware that the noble Lord, Lord Freud, expressed sympathy with the sentiments of what I am about to say in support of the amendment. I appreciate that and hope that we can move forward.
I start with a shocking fact; more than 1 million people are on incapacity benefit by virtue of mental illness. The condition may not be curable but it is treatable. Noble Lords may be interested to know what proportion of these people are in treatment. The figure is 52 per cent. This comes from the official psychiatric morbidity survey. It is the number of people receiving any form of treatment. Of those, half receive medication only, without any form of counselling or talk therapy. This tells us everything that is wrong with our current situation. We pay people money because they are sick but we do not have a process to ensure that they get treated. There is not a lot in this Bill that we can do to change that—that is the way it is—but if somebody is drawing benefit because they are sick, they should surely either be in treatment for that sickness or immediately be offered treatment. Anything else is a shocking waste of taxpayers’ money, apart from anything else.
Lord Turnberg
My Lords, in the absence of the noble Lord, Lord Layard, I would like to intervene briefly on his behalf. He spoke eloquently in Committee on this matter, and he is now busy saving the world in the economic forum in Davos, much to our dismay. I do not know exactly, but I have no doubt that he would want to point out that people with mental illness form a very high proportion of those who are out of work and seeking employment. They must be among the most difficult to place in work and among those we must strive harder to help. I recognise that the Government have put in place a system that aims to help with prime providers and so on but, as we have heard, this is of only modest benefit. It would be made so much more effective if, at the same time as being assessed for work and support allowance, claimants could be assessed medically for their mental illness and given the relevant treatment. A person whose mental illness is treated must be much more likely to get into work and to stay there. As the noble Lord, Lord Layard, pointed out in Committee, it makes no economic sense for the country, let alone for the people themselves, to leave them out of work because they are not gaining access to the relevant diagnosis and treatment that could make them fit for work. This is a marvellous opportunity when they are being assessed for work for them to be given the opportunity to get the treatment that would make them fit for it. I hope the Minister will look at this amendment as a valuable adjunct to the Bill and will accept it.
Baroness Thomas of Winchester
My Lords, I have a great deal of sympathy with this very practical amendment to a very real problem.
We heard a lot on Monday about taxpayers’ money, and particularly about how unfair it is for people on out-of-work benefits to be receiving more from the state for doing nothing than many of those who are in work, paying their taxes. However, we seem strangely passive about the problem of thousands of ESA claimants who are signed off work because of mental health disorders, thus costing the state millions of pounds, and who, as we have heard, are not required or even encouraged to seek treatment.
My noble friend the Minister sent us all a very interesting booklet entitled Models of Sickness and Disability Applied to Common Health Problems, written two years ago by Gordon Waddell and Mansel Aylward, a lot of which I have now read, he will be pleased to hear. We know that mental health problems now account for more than 40 per cent of long-term sickness absence, incapacity for work and ill-health retirement. We learn from the booklet that if current trends continue, within a few years they will be the majority; that the problem is mild to moderate conditions such as anxiety-related disorders, depressive disorders and stress; and, as we have just heard, that the cost of mental illness in the UK is estimated to be as high as £40 billion to £48 billion per annum, the greater part of which is due to sickness absence and long-term incapacity. Finally, we learn that about one-third of the working-age population have mental symptoms such as sleep problems or worries; one-sixth would meet the diagnostic criteria for a mental illness such as depression; but only about 6 per cent of the working-age population actually seek healthcare.
No wonder those who have made more of a study of these statistics than I have have tabled this amendment. However, the jury still seems to be out, according to page 39 of the booklet, on exactly which treatments improve work outcomes, although there is strong evidence that various medical and psychological treatments for anxiety and depression can improve symptoms, clinical outcomes and quality of life. Waddell and Aylward conclude that there is an urgent need to improve vocational rehabilitation interventions for common mental health problems, and that promising approaches include healthcare that incorporates a focus on returning to work, workplaces that are accommodating and non-discriminating, and early intervention to support workers to stay in work and so prevent long-term incapacity.
We now also have the report Health at Work: An Independent Review of Sickness Absence, by Dame Carol Black and David Frost, published in November last year. They mainly focus on those in work who might well be off sick without the right interventions, and make the point that people with health conditions too often do not receive appropriate early support to remain in work, especially those with common mental health conditions.
I am sure that the noble Lord, Lord Adebowale, will not divide on this amendment at this hour but perhaps he will instead seek a meeting with the Minister to discuss how to take forward this important matter, perhaps together with Dame Carol Black and Professor Waddell. I can quite understand why it is tempting to put something prescriptive into the Bill, but I do not believe this would be the right way forward.
Lord Winston
My Lords, I, too, also promised the noble Lord, Lord Layard, that I would chip in briefly on this amendment. As has been said, he is in a very different place—and I think they are probably all mad there anyway in Davos.
This is actually a very serious issue and I feel very deeply about it. It is a very good example of where there needs to be some joined-up thinking between what happens with welfare and the Health and Social Care Bill. This is one of the concerns that we have: more and more people with various mental disturbances—and of course it is a vast range of disease, much of which will probably not be helped by conventional treatment—becoming a particular problem in the workplace.
I support this amendment on the basis that a great deal can be done for mentally ill people, particularly those with anxiety disorders who are not necessarily severely incapacitated. The right support in the community—particularly, living in the community—is of immense importance. There would be a good chance of saving money for the Government if attention is paid to this area. I do not think that we would wish to press this amendment today but it still requires support even at Report stage.
Baroness Howe of Idlicote
My Lords, I have listened to what has been said and there has been quite a lot of support for the amendment. Indeed, some of the figures are very alarming, including the amount that lack of provision costs the economy. My question concerns how much of what we are talking about in the amendment is available within a reasonable distance of where people with these conditions live. If there is not an adequate supply, which I have a sneaking suspicion may be the case, what are the Government’s plans to ensure a reasonable regional, at the very least, supply of this form of treatment?
Lord Wigley
My Lords, I support the amendment and I am very grateful to the noble Lord for bringing it forward. It is important that we do not allow this dimension not to have the necessary attention before this Bill completes its passage. Everyone accepts that mental illness is a widespread challenge and we all commit to the need for something to be done. Yet, decade after decade, we hear the same noises being made and we wonder whether progress has been achieved.
As has been said by a number of noble Lords tonight, it is not just for the benefit of the individual—clearly it is to the individual’s benefit if he or she can remain in work or get into work with the necessary intervention, help and support—as it is also clearly of benefit to society as a whole and to the economy.
Following on from the comments we have just heard about the regional dimension, I should like to add the rural dimension. It is difficult enough for those with mental illness problems in cities but it is sometimes even more difficult in rural areas where there are not the support networks within anything like reasonable distances. In any thinking that the Government may be doing on this, perhaps that also could be taken on board. Even though this proposal may not find its way into the Bill, I hope that the Minister is in a position to indicate to the House the thinking on the way that this dimension can be taken forward.
Baroness Tyler of Enfield
My Lords, I, too, add my support for this amendment, which was moved very powerfully by the noble Lord, Lord Adebowale. As other noble Lords have said, all we need is a little bit of joining up between some of the important work that has been taken forward by the DWP and Jobcentre Plus, the very laudable intentions of the work programme and the work being promoted by the Department of Health. I have looked at the DoH website and its work in relation to increasing access to psychological therapies. It talks about how it is now much more possible to join up the help being provided to those with mental health problems as regards their anxiety and depression, as well as helping them back into work.
One example of which I am aware involves Relate, the charity in which I have a declared interest, working closely with Mind in the Hull and East Yorkshire region and the Humber NHS foundation trust. Working together, the programme that they are providing for people with mental health problems is helping to tackle their anxiety and depression while, because they have an employment adviser on hand, helping to get them back into work and to stay in work. This is the sort of approach that we should be advocating. It just needs a little more joining up, which is exactly the spirit of this amendment. I also hope that it will be possible to have further discussions on these important bits of joining up between the welfare state and providers in the voluntary sector.
Baroness Hayter of Kentish Town
My Lords, does not Davos sound interesting? I gather that the Prime Minister is there as well as the noble Lord, Lord Layard, but that Mick Jagger decided not to turn up. The advantage in one sense of the absence of the noble Lord, Lord Layard, is that we have had the privilege of hearing the amendment moved by the noble Lord, Lord Adebowale, who is second to none in his experience of working with substance abusers and those with mental health problems. It is good to have him here.
The subject of mental health is an important one and has featured a lot in our debates throughout the Bill—in discussions on where and whether conditionality is appropriately applied, in looking at the length of time for which contributory employment and support allowance should be available, and in assessing ways of dealing with the caseload for DLA and how best to introduce and assess the new PIP criteria. In all these we have been dealing with the consequences of the increasing mental problems that have been touched on. We know that the diagnosis of mental health problems has been rising. An NHS study in 2007 found that the prevalence of common psychiatric disorders severe enough to need treatment was between 6 and 9 per cent among people of working age. That means that we are talking about between one in 10 and one in 20 of our fellow citizens.
The consequences of that for the Bill and for the DWP are most obvious in the growth of the number of people eligible for DLA. Since 2002 the rise in the number of claims—which the Minister has frequently cited when making the case for reform of the benefit—has been almost entirely accounted for by those with either learning disabilities or mental health conditions. So, ensuring that employment and mental health treatment services are working closely together would have clear benefits not only—although most importantly—for claimants, but also for the department’s own efforts to reduce the number of people forced out of work through ill health. Equally vital will be an attempt to work with employers to help them better understand and equip themselves to be able to use the talents of those who, whether on an ongoing basis or for short periods, experience poor mental health.
I hope the Minister will outline in his response not only how employment-focused services, in particular for those on ESA, are working with mental health experts and ensuring that claimants receive the right treatment, but also what his department is doing to encourage employers to put the right support in place and to take a positive attitude towards workers with poor mental health. If he follows up on the excellent suggestion of a meeting, it would be particularly appropriate, along the lines set out by my noble friend Lord Winston, to include the Department of Health in it. Perhaps we will be able to encourage a bit of cross-Whitehall working on this issue.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I start by thanking the noble Lord, Lord Layard, who is in a better place, and the noble Lord, Lord Adebowale, who moved the amendment, for all their work on mental health conditions. Last month I had a very good meeting with the noble Lord, Lord Layard, on these matters, so there is an active dialogue. I want to put this into some context. This is an area that I have taken an enormous interest in, and I think that we need to go much further. What we need to realise is that we are right at the beginning of the process of even thinking that for people with these kinds of illnesses, work is a solution and not a problem for them. It is early days in our understanding of what to do and how to do it, but in the years to come we will have a really good opportunity to try to lock some of this stuff down. It can be done from several directions, which I want to describe.
The problem is that, as we know, around a third of those going on to ESA have a primary diagnosis of a mental health condition, although dual diagnosis and co-morbidity is seen in many cases. Indeed, a lot of people have mental health problems because they are long-term unemployed or long-term inactive. They need the right interventions to help them back into work, and mental health services are absolutely vital in that area, along with employment training and support. It must be the role of GPs and health services to diagnose conditions and work out what, if any, specialist health support should be provided to each individual, and to make those referrals to specialist health services. They have the knowledge to make those complex judgments. It is not the role of non-medically qualified individuals in Jobcentre Plus to do that; it is simply not appropriate. They can do some things—they can signpost people to health support such as the IAPT programme; they can provide work support—but they do not have the training or the knowledge formally to refer individuals to specialist health support. Nor do I want to go down the road of mandation into treatment or of out-of-work obligations. That is not the right way to go. I think that noble Lords will immediately understand all the human rights issues around that.
I assure noble Lords that we have a significant number of safeguards in place to ensure that individuals who present with mental health conditions and who may need specialist health support are signposted to such support. If at work capability assessment stage an individual presents with unexpected findings or undiagnosed physical or mental health conditions that cause the healthcare professional concern, and they feel that their GP should be aware of it, that information goes to the GP within 24 hours of the assessment. Again, it reinforces the role of the GP.
I am not talking about passing the buck to the NHS, because we have an important role to play. We need to ensure that the incentives in the system are right so that we stop people falling out of work—mental health conditions come second behind musculoskeletal conditions in the list of reasons. These concerns led me to commission the sickness absence review led by Dame Carol Black and David Frost. That important review has done a lot of the analysis that I wanted, and one of its recommendations was an independent assessment service which offers a kind of second opinion and a much more coherent view on what a person can do in terms of the workplace and their illness. That is about catching people at the right time, and I want to be able to catch people right at the start. The review has made a very serious set of recommendations which, as we work through their implications, could become a valuable motor to our rethinking how we supply help and make the connections between health and work. That is one opportunity that we now have. We are taking our time to get our reaction out because we want to get it right and to sort this issue out in its context.
We are also working with work programme providers to help them support those of their participants who have a mental health condition in gaining employment. We have had a bit of a slow start, as I had to admit in this Chamber yesterday, with the flow of ESA, although there are good signs that it is beginning to pick up. We have established a relationship between the prime providers and the mental health specialists, and I thank the noble Lord, Lord Adebowale, who is one of the key people in working out the mental health interventions that help people on the road to work. He has started working that out precisely and I am looking to him to give me some of the answers. I should probably vote against him rather than him against me because he has the responsibility in that area.
Within Jobcentre Plus we have launched a new support for all advisers to ensure that they are better skilled in helping claimants to improve their health and well-being. Jobcentre Plus employs disability employment advisers who are able to help claimants with the most severe health problems and to refer them to specialist divisions, such as Work Choice. We employ mental health and well-being partnership managers to build practical links between the local mental health services and employment services. Outside of the employment support we provide, the department has been actively engaged with the Department of Health to ensure that employment support is an integral part of the IAPT programme. Similar work is ongoing with the devolved Administrations.
This is a serious amendment on a serious matter. It is a difficult matter and we are not going to sort it out with a little bit of legislation. I commit to continue giving the issue serious consideration and effort. We can make a big improvement to the lives of hundreds of thousands of people and I commit to go on working in this area. I will have any meeting on this matter. My door is always open anyway but on this matter it is wide open. I therefore urge the noble Lord to withdraw his amendment.
Baroness Thomas of Winchester
Is Access to Work still available to people with mental health problems?
Lord Adebowale
I thank the Minister for his thoughtful response and the Members of the House who have taken part in this useful debate.
It is frustrating for me that there is evidence about the interventions that are likely to work with people who have the most common types of mental illnesses which restrict their ability to work—mainly anxiety and depression. The use of programmes such as Beating the Blues—the cognitive behavioural therapy approach which is most widely used in mental health, and the most widely researched intervention in the world—has a measurable and predictable impact on mental health. It is possible to apply some of these approaches and improve a depression and anxiety score such as to enable someone to work.
It is important that we pick up on the point, which noble Lords may not fully have understood, that we are dealing with people in a client group who are sometimes ill, but most of whom want to work. This is not me saying that—it is the expression of these individuals. They recognise that work is a powerful mental health improver. One in six people with serious mental health conditions currently work, and yet eight in 10 wish to do so. This means that there are 356,000 people with mental health conditions in the UK who wish to work but are not doing so. These people are inviting an intervention.
Although I recognise the seriousness of the Minister’s remarks on this issue, there is a systems failure that we could resolve. This is not about people like me and my organisations coming up with credible solutions; we have to match those credible solutions with the policy and the practice of the DWP. That is why the amendment is so important.
While I am on the subject of the work programme, my discussions with Ministers often ended with the sentence, “It is early days”—and it is early days—but the days are running out.
Lord Freud
“UK child poverty strategies
(1) Section 9 of the Child Poverty Act 2010 (UK strategies) is amended as follows.
(2) In subsection (7)(a)(i)—
(a) for “progress” there is substituted “measures”; (b) for “needs to be made” there is substituted “need to be taken”.(3) In subsection (7)(a)(ii)—
(a) for “progress” there is substituted “measures”;(b) for “intends to make” there is substituted “proposes to take”;(c) for “in achieving” there is substituted “to achieve”.(4) In subsection (7)(b)—
(a) for “progress” there is substituted “measures (other than those described under paragraph (a))”;(b) for “intends to make” there is substituted “proposes to take”;(c) for “in achieving” there is substituted “to achieve”;(d) the words from “otherwise than” to the end are repealed.(5) In subsection (8), for paragraphs (b) and (c) there is substituted “and
(b) give an account (in such manner as the Secretary of State considers appropriate) of the effect of those measures, so far as relating to the purposes mentioned in subsection (2).””
Lord Freud
My Lords, I will speak to Amendments 62G, 62H, 62J and 62L, which have been brought forward to ensure that the commission’s duty to report on child poverty in the UK does not duplicate the responsibilities of the devolved Administrations. They clarify that accountability for progress on devolved matters affecting child poverty will remain with the devolved Administrations. They have been developed in close consultation with those Administrations.
The Government have always been of the view that the new commission will be most effective if it continues to have a UK-wide remit. That is why it will continue to have a member appointed by a Minister from each of the devolved Administrations, in addition to the members appointed by UK Ministers. However, it is important that the commission does not unduly duplicate the scrutiny measures already provided by each of the devolved Administrations. We have therefore agreed that the annual reports will not present the commission’s views on the progress of the devolved strategies. The reports will only describe the child poverty measures taken by the relevant devolved Ministers. This approach will ensure that responsibility for scrutiny of the content of the devolved strategies remains with the devolved Administrations.
Secondly, these amendments also enable Northern Ireland to join the commission at a later date, if the Northern Ireland Assembly passes a Motion to that effect and a Minister of the Crown makes a corresponding order. Until then, the commission’s report is not required to comment on the Northern Ireland child poverty strategy, and the commission will not have a member appointed by the relevant Northern Ireland department. By giving the Assembly this option, this approach allows us to proceed with the commission for the rest of the UK, respects the rights of the Northern Ireland Assembly and ensures that we adhere to the principles of the devolution settlements while ensuring that the Sewel convention is not breached. These amendments ensure that we can create a commission which can sit effectively alongside existing devolved provisions and report on progress across the UK.
Amendments 62EA and 71 clarify the provisions in the Child Poverty Act 2010 that set out the requirements for UK child poverty strategies. The Act requires each UK strategy to,
“describe the progress that the Secretary of State considers need to be made”,
over the period of the strategy. The current UK child poverty strategy does this in detail. It sets out the radical package of reforms that the Government are introducing and provides a clear timeline for progress in terms of policy implementation. However, the strategy does not set interim targets for reductions in child poverty by the end of the three-year strategy period. We do not wish to incentivise the short-term income-transfer approach in which small amounts of moneys are given to families to lift them just over the poverty line. This is the easiest way to improve child poverty figures but it does not strike at the heart of the problem. This is what our reforms will do, tackling the root causes of poverty and providing a sustainable solution which will enable us to meet the 2020 targets.
This approach is absolutely in line with both the letter and the spirit of the Child Poverty Act. It is important to confirm in statute our existing understanding that the Act does not require progress in this context to be expressed in numerical terms or interim targets. These amendments will ensure that it is a matter for the Secretary of State to decide how the strategy should describe progress and make it crystal clear that a long-term approach such as that outlined above is in line with the requirements of the Act. These amendments will ensure that the commission does not duplicate the responsibilities of devolved Administrations and clarifies the requirements for child poverty strategies.
The Government see Amendments 62H, 62J and 62L as directly consequential upon Amendment 62G. However, further Divisions would be required should noble Lords wish to push the other amendments in this group to a vote. I beg to move.
Lord Wigley
My Lords, I rise to speak to the amendments that deal with the devolved Administrations. I wondered until almost the last sentence that the Minister spoke exactly what the game was going to be. From what I understand, it will be mainly in terms of the avoidance of duplication. I do not know whether I have got that right—and perhaps the Minister can indicate whether it is mainly the avoidance of duplication, as opposed to giving anything additional with regard to the powers.
The 2020 target has had considerable enthusiastic support in Wales, but the progress has not always been as positive as one would have hoped. Of course, definitions of child poverty can sometimes be a problem, as I am sure that the Minister will immediately acknowledge. It is not just with regard to absolute levels of poverty; it is to do with relative levels as well. Perhaps the Minister will respond to this. One challenge is to get joined-up thinking between the devolved Administrations which have responsibility for social services, education, community services and local government. Many of the other responsibilities are in Westminster, particularly the economy and taxation and the transfer of resources. That is clearly important in cracking this problem. I welcome any steps being taken here that bring greater coherence and better working together between the various parts of these islands for that purpose. But I hope that something additional will come into the equation that enables greater progress to be made to eradicate child poverty, not just in Wales but throughout the UK.
Lord McKenzie of Luton
My Lords, we are supportive of Amendments 62G, 62H and 62K. As we have heard, Amendments 62G and 62H clarify the position with regard to the devolved Administrations and Amendments 62J and 62L do so with regard to Northern Ireland. The briefing note explains that Amendments 62G and 62J ensure that there is no overlap between the role of the commission and the devolved Administrations by ensuring that the commission describes rather than assesses progress on each of the devolved Administration’s strategies. Could the Minister confirm, however, that the commission will still take a UK-wide view and ensure that it assesses progress across the whole country, including assessing where central government may need to take specific actions on those policies within its remit in a particular nation?
I listened carefully to what the Minister said about Amendment 62EA, clarifying the requirement in the Child Poverty Act for UK child poverty strategies to describe the process that the Secretary of State considers needs to be made by the end of the period. The department says that the amendment will confirm the Government’s existing understanding that a description of the progress in narrative or policy terms meets the requirements of the Act. Perhaps the Minister can say a little bit more about this amendment. As I understand it, the intention of the Child Poverty Act was to ensure that the Government set out a strategy to ensure that this progress was made rather than simply describe, perhaps in numerical terms, what that progress would look like. We would be concerned if the effect of the amendment was to weaken the duty on the Government to set out such a strategy.
Lord Freud
My Lords, the amendment is intended to clarify the Child Poverty Act, not to change the substance or affect the law. It will make it absolutely clear that describing progress in terms of policy is entirely in line with the requirements of the Act. It does not alter current government policy on child poverty. The Government will continue to be required to produce a child poverty strategy every three years, setting out the measures that will be taken and the progress that needs to be achieved in that period. The purpose of the latter two amendments is simply to clarify how progress can be described.
To pick up on the point made by the noble Lord, Lord Wigley, the amendment will ensure that scrutiny of devolved matters relating to child poverty remains with the devolved Administrations, thus respecting devolution conventions. We will continue to work closely with the devolved Administrations to ensure that both the commission and the devolved strategies contribute to continued progress against the goal of ending child poverty.
Lord Freud
“( ) A report under subsection (1) must also describe—
(a) the measures taken by the Scottish Ministers in accordance with a Scottish strategy,(b) the measures taken by the Welsh Ministers in accordance with a Welsh strategy, and(c) in the case of a report made after the appointed day for Northern Ireland, the measures taken by the Northern Ireland departments in accordance with a Northern Ireland strategy.”
“( ) A Minister of the Crown may, if the Commission so requests, carry out or commission research for the purpose of the carrying out of the Commission’s functions.”
Lord Freud
“( ) After subsection (2) there is inserted—
“(3) In this Part “appointed day for Northern Ireland” means such day as a Minister of the Crown may by order with the consent of the Northern Ireland Assembly appoint (and different days may be appointed for the purposes of different provisions of this Part).””
“Review into the impact of the calculation of universal credit
The Secretary of State shall conduct a review into the impact of the calculation of universal credit, to conclude one year after the coming into force of this provision, and shall publish a report on the review to both Houses of Parliament, on—(a) claimants’ ability to access childcare, and(b) the impact on work incentives for second earners.”
Baroness Hayter of Kentish Town
My Lords, as has been repeated and endorsed many times, a main aim of universal credit is to make work pay. This amendment seeks to ensure that universal credit makes work pay for women and parents. At present, there are very real fears that, first, the cuts in support for childcare that the Government have introduced and, secondly, the impact on second earners of the way that universal credit has been designed will mean that universal credit leads to fewer women entering or remaining in the workplace. The amendment therefore asks for a review of the impact of universal credit on claimants in these two areas, to enable us to monitor the extent to which such fears are justified.
I trust the Minister will not try and tell us that a review costs £1.4 billion—the figure he quoted on 17 January for a review of the introduction of PIP, admittedly with some trialling, which he told us was happening anyway,. He has of course yet to answer my subsequent query on how this figure was reached, but I urge him not to repeat it today. He also told us on 29 November that the Government were investing £2 billion to cover all the costs of implementing and operating universal credit, which is why the figure of over half that for an independent review of a different aspect of the Bill is a little hard to comprehend.
Nevertheless, we welcome the Government’s support for the principle of reviews. In the case of child maintenance, according to the letter distributed to Peers mid-morning today, the Government’s amendment to review the impact of all their child maintenance reforms 30 months after the introduction of charging to ensure that the reforms have driven the behavioural change anticipated shows a welcome willingness on the part of the Government to test the evidence to see whether they achieved their aims. This amendment seeks no less. It is to enable the Government to set out the evidence for their various changes and assess the impact on the families concerned.
Lord Freud
My Lords, I have to admit that this amendment is not as expensive as the £1.4 billion PIP one, because the noble Baroness is looking to do the research afterwards rather than stopping it all and doing the research first, which would have delayed it. The reason why the PIP amendment was so expensive was the one-year delay, meaning that all those savings would not have accrued.
The intention behind this amendment is to allow discussion of the impact of the universal credit on both the accessibility of childcare and work incentives for potential second earners. Working families will be able to receive support in respect of 70 per cent of monthly childcare costs up to £760 for one child or £1,300 for two or more children. These amounts are equivalent to the current arrangements in tax credits.
We understand that childcare plays a crucial part in parents’ work decisions and are determined to help those moving into the workplace, which is why we found the extra £300 million to help people below the 16-hour limit of tax credits. The childcare market is very varied and does not always effectively meet the needs of working parents. We are introducing flexibility into the system, such as through introducing monthly limits based on actual paid costs, so that it supports the childcare market better. Local authorities in England and Wales have the duty to secure as far as reasonably practicable sufficient childcare for working parents. The Department for Education is currently consulting on whether a local annual report would be a more effective and meaningful way of enabling parents to hold their local authority to account.
Let me move now to the concerns over the work incentives for potential second earners. My views on this are on the record. The costs are high. If couples who were both in work were entitled to an additional disregard of, say, £700 a year, the cost would be £240 million. If the disregard were £1,000, the cost would be £350 million. Those are the sums and we simply do not have them at this stage. Universal credit should mean that most families in which one parent works full-time for 35 hours a week for the minimum wage will not live in poverty.
The amendment asks us to confirm in legislation that we will undertake a formal review of both these areas. However, my real response is that these are just two particular areas. We will monitor the effect of universal credit right across aspect after aspect of its impacts. I have also included powers in the Bill to pilot different policy approaches. We will do that by having affirmative regulations to approve particular pilots. Any substantive changes following a pilot will also require regulations and be subject to the usual SSAC, so there are a lot of protections here.
It will not be a question of doing a review of something such as the second-earner incentive. I want to see a pilot in which we can pinpoint the value of moving it around. That is a far more useful way of finding out such things. What is the effect of the taper? What is the effect of the second-earner disregard? What is the effect of moving them around? We need to know all these things in a much more coherent way than we would from carrying out a review. We will have econometric analysis of a kind that leaves anything that we have seen in the past in the dust. Therefore, this requirement for a review and a report on specific impacts just creates unnecessary bureaucracy. That is not the way I want to do it.
To summarise, I hope it is clear that we are aware of these two issues, which are very important and interesting. I will continue to give them the attention that they deserve, and I therefore urge the noble Baroness to withdraw this amendment.
Baroness Hayter of Kentish Town
Having had the promise of the intention to give these issues the importance that they deserve, I beg leave to withdraw the amendment.
Lord Freud
“( ) in subsection (3A), “Part 1 of”;” |
“Section 1B(2).” |
“Section (Further entitlement after time-limiting)(2).” |
“Part 14Standards of decision-making
Short title and chapter | Extent of repeal |
|---|---|
Pension Schemes Act 1993 (c.48) | In section 171A— (a) in subsection (2), paragraph (b) and the preceding “or”; (b) in subsection (3), “, or annexed to,”. |
Child Maintenance and Other Payments Act 2008 (c. 6) | In Schedule 7, paragraph 3(3).” |
“(2A) Section 57 (entitlement of lone parents to income support etc) will come into force no earlier than 1 April 2013, and not before the implementation of universal credit.”
Baroness Lister of Burtersett
My Lords, yesterday the noble Lord, Lord Kirkwood, said to me, “Trust you to have the last amendment”. I am not sure that it was a compliment. Amendment 69 relates to the implementation timetable for Clause 57, which ends entitlement to income support for lone parents whose youngest child is aged five. This is to be introduced as soon as possible after the Bill receives Royal Assent. This modest amendment seeks only to introduce a delay to the implementation of the proposed change to ensure that it aligns with the planned introduction of universal credit, and to encourage the Minister to put on the record some concessions that would ease the situation of the lone parents affected.
Moving an additional 100,000 lone parents off income support and on to jobseeker’s allowance when their youngest child reaches five is a short-sighted measure in the current economic climate. Increased conditionality and tougher sanctions serve only to add unwarranted pressure on lone parents, when suitable employment opportunities remain sparse and access to further education is curtailed by work-related requirements. Critically, lone parents who find work of less than 16 hours per week will be unable to take advantage of the new childcare support provisions for at least 18 months. This potent mix could leave lone parents stranded on out-of-work benefits and unable to secure the foothold they need to enter the labour market on a sustainable basis.
Longitudinal research with lone parents who had elected to move into employment and with their children underlines the importance of such a secure foothold. The research was carried out for the department and was indeed cited in a note that the Minister kindly circulated on the impact of maternal employment on schoolchildren. This note referred to the evidence in the research of how lone parents’ employment can provide a good role model for their children. However, the research also found that that is not always the case. One of the researchers, Tess Ridge of Bath University, writes that,
“encouraging lone mothers into unstable and insecure labour markets runs the risk of alienating children from the values of employment. For these children work had held out the promise of something better and that promise had not been kept, so they also experienced disappointment and for some an apparent loss of confidence in the value of work”.
In light of such findings, my advice to the Minister is: more haste, less speed. The long-term gains associated with requiring the lone parents of younger children to be available for paid work might be better achieved by adopting this amendment.
As I argued in Grand Committee, gaining a level 3 or higher qualification makes a significant difference to the amount of money a lone parent can earn and increases their chances of upward mobility. Work search and work availability requirements will severely limit the ability of lone parents to gain qualifications and skills that could help them find higher paid employment that is sustainable, and to make the most of opportunities to progress once working. Currently, lone parents can receive a fee remission if claiming JSA. However, they are also required to continue to seek work while studying and be prepared to leave a course if offered employment. If they refuse, they face a payment sanction. It seems to me that in these circumstances work-related requirements inhibit, rather than enable, a claimant’s ability to find better paid employment. This is an unintended consequence, I am sure, and is in fact preventable. Previously, lone parents on income support could complete a full-time further education course, up to and including level 3, when their children started school, and crucially before moving on to jobseeker’s allowance—a benefit with significantly higher conditionality.
The prescribed circumstances in Clauses 22 and new Section 6F—inserted by Clause 49—should, I would argue, permit access to further education up to and including level 3, and training for responsible carers claiming JSA or universal credit. This means that, if undertaking a further education or training course, they should be treated as fulfilling work search and work availability requirements until their course ends or their child turns seven. This would allow responsible carers to “skill up” and increase their earning potential when their youngest child starts full-time education. This is entirely consistent with the Government’s anti-child poverty and social mobility strategies, which emphasise the importance of education and training and the contribution they can make to ensuring that paid work represents the best route out of poverty. The Minister expressed some sympathy with the arguments presented in Committee when he was pressed by the noble Baroness, Lady Meacher, to write greater flexibility into the Bill. I wonder whether he has been able to give further thought to this and perhaps go rather further than he was able to in Committee.
Lone parents require jobs that allow them to be there for their children when they need them. With only one parent to do the school run, care for children when they are ill and support them with their school work, jobs with flexible working patterns are absolutely vital, as is access to affordable, high-quality childcare. On this point, the announcement that the Government will extend support for childcare costs to those working under 16 hours is very welcome. This is due to be implemented as part of universal credit from October 2013 onwards. The demand for jobs of less than 16 hours per week, so-called “mini jobs”, is likely to increase as lone parents of five and six year-olds look for work that dovetails with their caring responsibilities. The extended help with childcare costs will be of particular benefit to this group of lone parents. However, unless the implementation of Clause 57 is delayed, 100,000 lone parents of younger children will be unable to access it for up to a minimum of 18 months, if offered a job of less than 16 hours a week.
Finding the money to pay for childcare can be a significant hurdle for lone parents and is often the straw that breaks the camel’s back when it comes to making work pay. Until very recently, responsible carers in short-hours jobs could access financial help towards childcare costs. Prior to April 2011, a time-limited discretionary in-work childcare subsidy payment was available for lone parents and partners on the New Deal and who worked less than 16 hours. This provision has since been abolished and incorporated into the flexible support fund. This is a generic pot of money for discretionary use by advisers to cover a wide range of claimant’s needs and is available only when all other avenues of possible financial support have been explored.
Might I suggest that introducing an interim payment akin to the previous in-work childcare subsidy would be a positive work incentive for this group of claimants during the interim period? I am sure that Gingerbread, to which I am grateful for help with this amendment, would be keen to discuss the possibilities with the Minister, who has said that he always has an open door.
To conclude, there is a strong case for delaying the implementation of this policy to coincide with the introduction of universal credit in order for the Government to achieve their objectives. However, if this policy goes ahead as planned, it would require the kind of additional interventions that I have outlined, and I therefore hope that the Minister will look favourably on them and at the very least make a commitment to give them serious consideration. I beg to move.
Lord Freud
My Lords, as noble Lords are aware, our focus is on supporting and helping to lift children out of poverty and improve their life chances by encouraging lone parents to enter paid work. Evidence shows that paid work is good for lone parents and their children in nearly all circumstances. Indeed, just under 80 per cent of lone parents with a youngest child aged five or six are either in employment, looking for a job, or would like to work.
Many lone parents consider making the transition to work when their youngest child starts school, and it is for these reasons that we announced our intention to align the age at which lone parents could reasonably be expected to look for work to when their youngest child reaches the age of five. This means that once a lone parent’s youngest child reaches the age of five we would want the parent to claim jobseeker’s allowance if they are capable of work. If they have limited capability for work, they would claim employment and support allowance, unless they are entitled to income support on some other ground, for example as a foster carer. If we delay carrying out this change and wait for the introduction of universal credit, we delay bringing these lone parents closer to the labour market, delay making any benefit savings but, more importantly, delay lifting more children in lone-parent households out of poverty.
Picking up the point on the current economic situation, it is important that we do not repeat the mistakes of past slowdowns and allow people to slip into inactivity. In fact, one of the best things about this economic slowdown—and there are not many good things about it—is that we have not let more people fall into inactivity. In fact, there is less economic inactivity now than a couple of years ago. Maintaining our active labour market policies will ensure that people, including lone parents, do not become detached from the labour market and are well placed to benefit when the economy picks up again.
As noble Lords are aware, this is especially significant because, compared to a child of a lone parent who is not working, a child of a lone parent who works part-time is almost three times less likely to be living in poverty, and a child of a lone parent who works full time is five times less likely to be living in poverty. While we want lone parents to enter work, we do not want them to do so at the expense of their caring responsibilities. This is why we maintained the right for lone parents to restrict their availability for work to school hours, and we will retain all other flexibilities within jobseeker’s allowance to ensure that lone parents can balance caring for their child while working. I described all those measures in Committee, and I shall not do so again given the lateness of the hour.
I stress that this initiative is an important lever in lifting lone parent families out of poverty. If it were delayed until October 2013, it would result in about 17,000 fewer lone parents being in work, which in turn would prevent increases in household income for up to 25,000 children. However, in response to the noble Baroness, Lady Lister, I am conscious of the importance of putting together training and employment strategies. When I wrote my report in 2007, the two strategies were so far apart that they never met. They are moving together, and my view is that we should move them as close as we possibly can, so the door is particularly wide open to discuss with the noble Baroness and, perhaps, with Gingerbread how we can achieve that in the months and years to come.
With that explanation, I ask the noble Baroness to withdraw her amendment.
Lord Freud
“( ) any provision of Part 4 (personal independence payment) or of Part 9 of Schedule 14;”
Lord Freud