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Oral Answers to Questions
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Chris Kelly (Dudley South) (Con)
1. What steps he is taking to address levels of PFI debt in NHS hospitals; and if he will make a statement.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
9. What steps he is taking to address levels of PFI debt in NHS hospitals; and if he will make a statement.
The Secretary of State for Health (Mr Andrew Lansley)
The previous Government left 102 hospital projects with £67 billion of PFI debts. We have worked closely with NHS organisations for which PFI affordability is an issue to identify solutions for them, which have included joint working with the Treasury to reduce the costs of PFI contracts. Despite that, some trusts have unaffordable PFI obligations. On 3 February I announced how each of them could access ongoing Government support to help meet those costs.
Chris Kelly
I thank my right hon. Friend for that answer. Russells Hall hospital was expanded in 2003, but still has £1.8 billion of PFI debt attached to it—debt which will not be paid off until 2042. What steps is he taking to help reduce the PFI costs for hospitals such as mine that have not been completely crippled by Labour’s PFI and therefore do not qualify for central support, but none the less have high levels of debt?
Mr Lansley
I am grateful to my hon. Friend, who illustrates the precise issue with what Labour left. Labour talked of building new hospitals but left this enormous mortgage, in effect, of £67 billion. He refers to Russells Hall hospital, which, like others, is having its contracts reviewed for potential savings following the Treasury-led pilot exercise that I described, which was undertaken at Queen’s hospital, Romford.
Oliver Colvile
Given that the PFI process has been proven to have flaws in delivering value for money for taxpayers, what effect does my right hon. Friend feel that that will have on new commissioning boards?
Mr Lansley
My hon. Friend will know from the very good work being done by the developing clinical commissioning groups in Plymouth that they have a responsibility to use their budgets to deliver the best care for the population they serve. It is not their responsibility to manage the finances of their hospitals or other providers; that is the responsibility of the strategic health authorities for NHS trusts and of Monitor for foundation trusts. In the future, it will be made very clear that the providers of health care services will be regulated for their sustainability, viability and continuity of services but will not pass those costs on to the clinical commissioning groups. The clinical commissioning groups should understand that it is their responsibility to ensure that patients get access to good care.
Grahame M. Morris (Easington) (Lab)
The Secretary of State will recall that he cancelled the new hospital planned for my area shortly after the general election. Will he advise the House how many hospitals the Government are building that use models other than PFI?
Mr Lansley
The hon. Gentleman will recall that his foundation trust was looking to receive more than £400 million in capital grant from the Department, which went completely contrary to the foundation trust model introduced under the previous Government. I pay credit to North Tees and Hartlepool NHS Foundation Trust, which is developing a better and more practical solution than that which it pursued before the election—many of the projects planned before the election were unviable. The hon. Gentleman will know that projects are going ahead, and last November, together with the Treasury, we published a comprehensive call for reform of PFI. We achieve public-private partnerships and use private sector expertise and innovation, but on a value-for-money basis.
Valerie Vaz (Walsall South) (Lab)
John Appleby of the King’s Fund says that PFI represents less than 1% of the total annual turnover of £115 billion. Does the Secretary of State agree?
Mr Lansley
I gave the hon. Lady the figure: £67 billion of debt. Seven NHS trusts and foundation trusts are clearly unviable because of the debt that was left them by the Labour Government.
John Pugh (Southport) (LD)
Is the Secretary of State confident that subsidising hospitals burdened with PFI will not be deemed anti-competitive under forthcoming legislation, or state aid under EU legislation? Has he taken appropriate legal advice?
Mr Lansley
I always act on advice, and I am absolutely clear that the support we have set out for NHS trusts and foundation trusts will not fall foul of anti-competitive procedures.
David Wright (Telford) (Lab)
2. What recent assessment he has made of the potential risks of NHS reorganisation.
The Minister of State, Department of Health (Mr Simon Burns)
The Department monitors risks associated with the implementation of the health and social care reform programme on an ongoing basis.
David Wright
“An open, transparent NHS is a safer NHS”: not my words, but those of the Secretary of State for Health. Is it not amazing that Ministers do not want to release documentation relating to the reorganisation of the NHS? Is it not an absolute scandal that they will not publish the documentation? Is it not the fact that the reorganisation of the NHS is looking a bit like the Norwegian blue? Should it not shuffle off the perch?
Mr Burns
No, the hon. Gentleman is wrong. As he, or certainly the right hon. Member for Leigh (Andy Burnham), will know, the risk register is an ongoing document—discussions between Ministers and civil servants on the formulation, implementation and transition of policies—and it would be wrong, in my opinion, for it to be published. That is why my right hon. Friend the Secretary of State appealed to the tribunal following the decision of the Information Commissioner, in line with the precedent adopted by Secretaries of State in the Labour Government in both the Department of Health and the Treasury.
David T. C. Davies (Monmouth) (Con)
Does the Minister agree that the risk of not reorganising would be the longer waiting lists, longer waits for ambulances and lower access to life-prolonging drugs that we currently see in socialist-dominated Wales under the Assembly?
Hywel Williams (Arfon) (PC)
The Minister will know that large numbers of people from Wales, particularly north Wales, access treatment in England. What assessment has he made of the risks to such treatment if the legislation goes through?
Mr Burns
If the hon. Gentleman is trying to tease out of me what is in the risk register, I am afraid he will be unsuccessful, but if it is of any reassurance I can tell him that for people living close to the border there have been arrangements between Wales and the English NHS and they will continue. Those people will benefit if treated in England, because waiting times are falling in this country, unlike Wales where they are increasing.
Mr Jamie Reed (Copeland) (Lab)
What a pleasure it is to see the Secretary of State here today; he managed to make his way in.
I am afraid I have to describe the Minister of State’s answer as codswallop. Let me give him an example of one risk to the NHS that we already know about. The number of NHS nurses has fallen by 3,500 since the general election, and that figure could be at least 6,000 by the end of this Parliament. The Bill is damaging front-line services in the NHS right now. Why does the Minister not put patients before his, the Secretary of State’s and the Prime Minister’s pride, drop this unwanted Bill, and use some of the money it would save to protect those 6,000 nursing posts?
Mr Burns
I have to say that, unfortunately, notwithstanding what the hon. Gentleman thought was a rather clever way of describing my answers, his figures are factually incorrect. As Jim Callaghan once said, an inaccuracy can be halfway round the world before truth gets its boots on. The facts are these: there are 896—[Interruption.] If the hon. Gentleman would listen to the answer he asked for, he might learn something and stop making misrepresentations. There are 86 more midwives working in the NHS—[Hon. Members: “86?”]—896, which is an increase of 4%. There are 4,175 more doctors working in the NHS: an increase of 4%. There are 15,104 fewer administrators working in the NHS—a decrease of 7.4%—and 5,833 fewer managers. There are more doctors. There are more midwives. There are fewer administrators.
Jessica Morden (Newport East) (Lab)
3. What recent assessment he has made of the future of private health care.
Teresa Pearce (Erith and Thamesmead) (Lab)
6. What assessment he has made of the future of private health care.
Mr Russell Brown (Dumfries and Galloway) (Lab)
13. What assessment he has made of the involvement of the private health care sector in the NHS.
The Minister of State, Department of Health (Mr Simon Burns)
The Department has made no assessment of the future of private health care. This is not the role of the Department of Health. The private sector has always provided services to the NHS and the Department monitors trends where it does so—for example, the number of NHS patients choosing a private provider under patient choice.
Jessica Morden
Given that the Prime Minister said there would be no top-down reorganisation of the NHS, the coalition agreement ruled it out and nobody voted for it, what exactly is the Secretary of State’s mandate for turning the NHS into a “fantastic business”, as the Prime Minister has said?
Mr Burns
I am extremely sorry if the hon. Lady really believes the mantra that she has just spewed out. If she had read pages 45 and 46 of our manifesto, she would have seen that it says that we would introduce clinical commissioning groups, take away political micro-management from Whitehall, free up the NHS and cut bureaucracy, as we are doing, which will save £4.5 billion to reinvest in the health service. Our coalition colleagues, the Liberal Democrats, had in their manifesto the abolition of SHAs. So I have to tell the hon. Lady that she is wrong. The test of what is going on and what is a success is the fact that if one meets GPs around the country, they support commissioning for their patients.
Teresa Pearce
On the BBC’s “Newsnight”, the Minister of State stated that the Health and Social Care Bill would turn the NHS into a “genuine market”. How does this belief fit in with the NHS founding principle that access should be based on need, not market forces?
Mr Burns
I am sorry—the hon. Lady has obviously not listened properly to me. It has been my guiding principle and my core belief from the day I entered politics that we should have a national health service free at the point of use for all those eligible to use it. In no shape or form does the Bill, or any actions by this Government, compromise that core belief of mine.
Mr Brown
The Minister is aware that funding for the health service in Wales and Scotland is through the Barnett formula. For every pound saved by the Government—in other words, for every pound less spent per person in England—there is a knock-on consequence for the budgets in Wales and Scotland. What assessment has he made of the fact that he will be funding NHS provision from private patient fees, rather than the public purse?
Mr Burns
As the hon. Gentleman knows better than I do, the running of the NHS in Scotland and Wales is a matter for the devolved authorities. I speak for the English NHS, and I can tell him that that we have guaranteed that the budget of the NHS in England will be a protected one for this Parliament in which there will be real-terms increases, albeit more modest than in the past. But we have seen in Wales in particular a fall of just over 8% in funding. That is the decision of a Labour Welsh Government. The moneys that are saved in the health service in England through cutting out bureaucracy and through greater effectiveness in delivering care will be totally reinvested—100%—in the NHS in England.
Sir Paul Beresford (Mole Valley) (Con)
I may have an interest—a remote one—in this question. I expect my right hon. Friend would agree that every patient who chooses to have private health care rather than national health service care, for whatever reason, is one less case on the national health cost and care bases. Does my right hon. Friend agree that it may be appropriate for the Treasury to do a cost-benefit analysis so as to consider a tax encouragement for individuals, especially those over 65, to take out private health insurance?
Mr Burns
I do not want to disappoint my hon. Friend, but I am afraid I do not agree with that. What the Government have to concentrate on is giving the maximum amount of resources within the protected budget to the provision of health care in this country, to ensure, enhance and improve the quality of care for patients in England. That is the priority, not providing tax relief in any shape or form for people who use their choice for private health care.
Margot James (Stourbridge) (Con)
Professionals working in the NHS told the Health and Social Care Bill Committee that income from private patients was important to the development and improvement of NHS services. What steps will my right hon. Friend take to ensure that that income benefits NHS patients?
Mr Burns
I am grateful to my hon. Friend for her question, because it might clarify some of the misinformation being bandied around on the Opposition Benches. Any money generated by private patients or by the private sector within the NHS must be spent on NHS patients, so it will benefit NHS patients and the NHS, and that is to be welcomed.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that collaboration between the NHS and the independent sector can deliver real benefits for both patients and the taxpayer?
Mr Burns
My hon. Friend is absolutely right, because we need to drive up the quality of care. What we are doing with the Health and Social Care Bill is closing a loophole so that there can be no favouritism towards the private sector, so the travesty introduced under the previous Government, including the right hon. Member for Leigh (Andy Burnham), whereby independent treatment centres had an advantage that put the NHS at a disadvantage in providing care, and were paid more than the NHS, will stop, because it is unacceptable.
Mr Kevin Barron (Rother Valley) (Lab)
Part 3 of the Health and Social Care Bill will introduce competition policy to the NHS by law for the first time in its history. Does the Minister think that that is likely to lead to more private care in this country or less?
Mr Burns
It is a bit rich for the former Secretary of State to bleat about that. What I want is the finest health care for patients so that they are treated more effectively and quickly and their long-term conditions are managed in a way that enhances the patient experience.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
4. What steps he is taking to address underperforming hospital management teams.
The Secretary of State for Health (Mr Andrew Lansley)
The performance of hospital management teams is the responsibility of their boards. Those are accountable to strategic health authorities for NHS trusts, and foundation trusts are accountable to their governors to ensure that they comply with Monitor’s framework. As part of our work to strengthen NHS trusts so that they can reach foundation trust status, we have published guidance on strengthening trust boards, their clinical leadership and management. We are further strengthening accountability through quality accounts and open reporting so that the public can see the absolute and relative performance of all NHS service providers.
Dr Poulter
I thank my right hon. Friend for that answer. It is absolutely right that managers take responsibility for the decisions that they take at a local level on behalf of patients and are held accountable for them. A doctor or nurse who fails in their duty can be struck off, so there is clear accountability, but there appears to be no clear accountability or traceability for the decisions of hospital managers. Who will hold those people properly to account when they have failed?
Mr Lansley
My hon. Friend knows that the management of trusts should be accountable directly to their boards. As I said, the management of foundation trusts are accountable, through their boards, to their governors. An important point that arose in relation to Mid Staffordshire NHS Foundation Trust is that we should ensure—we are looking at how to fulfil this—that there is also a code of practice to which managers are held accountable. He knows, as I do, that management must be accountable through their boards.
Rosie Cooper (West Lancashire) (Lab)
The Secretary of State has part-begun to answer this question, as he recently threatened to sack NHS boards that do not meet their financial and waiting time targets. The question is this: why is he abolishing those powers in the Health and Social Care Bill? Is he really saying that governors of foundation trust hospitals have the power and wherewithal to sack a board?
Mr Lansley
The hon. Lady should know that we intend to enhance the powers of foundation trust governors, but I am simply taking what was her Government’s policy before the election—that all NHS trusts should become foundation trusts, with the freedoms that go with that, and the responsibilities and accountability. We are putting that into place where her Government failed.
Penny Mordaunt (Portsmouth North) (Con)
5. What recourse patients have when denied facilities to which they are entitled under the NHS constitution.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The patient may complain either to the local organisation that provides the service or to the primary care trust. If it proves impossible to resolve the complaint locally, the complainant has the right to ask the health service ombudsman to look into their case. They have the right also to make a claim for judicial review if they think that they have been directly affected by an unlawful act or decision of an NHS body.
Penny Mordaunt
In the short time that I have been a Member, I have had to challenge my local trust over its policies on cancer drugs, metabolic surgery, IVF and a raft of other issues in order to get my constituents the treatment that their doctors say they need. When will all NHS patients in Portsmouth and elsewhere be able to have treatment based on clinical need?
Anne Milton
My hon. Friend’s constituents are fortunate to have such a vigilant MP who has taken up their individual cases. Patients have the right to expect local decisions on the funding of drugs and treatments to be made rationally, following proper consideration of the evidence. I suggest that she, like many other Government Members, will not be going out to march to preserve the PCTs, which often make flawed decisions.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
Has the Minister seen an article today by the respected journalist Polly Toynbee—[Laughter.] Respected by the Prime Minister—[Hon. Members: “Stop laughing.”] I am not laughing at all—
Mr Speaker
Order. I want to hear the views of Polly Toynbee, as enunciated by Dame Joan.
Dame Joan Ruddock
On a very serious issue, a waiting list clerk of 17 years has just resigned because she was asked to adopt a range of devious methods to make sure that people coming up to the 18-week target for treatment were taken off lists. Does the Minister understand that patients will not always know whether they have had proper treatment, and that it will be far too late to refer them to an ombudsman at some later date?
Anne Milton
I thank the right hon. Lady for her question. I am devastated to say that I have not seen the article to which she refers, but I am sure that I will. The Department has made it very clear to the NHS that clinical priority is and remains the main determinant of when patients should be treated. When I was in opposition I made various visits to various hospitals and saw them fiddling around at the edges, with admin staff forced to do things that they did not want to do, in order to tick boxes for the previous Government.
Mr Speaker
Right. Can we now speed up a bit? We have a lot to get through, and I should like to accommodate the interests of colleagues, so everybody needs to tighten up.
Jo Swinson (East Dunbartonshire) (LD)
7. What assessment he has made of the effectiveness of NHS allergy services.
The Minister of State, Department of Health (Paul Burstow)
A number of reports have highlighted variations in NHS allergy services and a lack of integration throughout primary, secondary and tertiary care. The Department has funded the NHS in north-west England to pilot an integrated model of care, and the results of that work have been widely disseminated. The Government expect NHS commissioners to commission services to meet the health needs of their local population and to deliver improving outcomes for patients.
Jo Swinson
I thank the Minister for that reply. He mentions the recent north-west allergy pilot, and its report contains a number of recommendations, including improved education for commissioners about the impact of allergy on primary care, and the allocation of additional specialist allergy training posts. How does he intend to act on those recommendations in order to improve services for millions of allergy sufferers?
Paul Burstow
I am grateful to my hon. Friend, who I know campaigns on these issues and has a parliamentary reception on them later this week. She is absolutely right that we need to ensure that there are improvements in the area, and that is why I can confirm today that discussions are under way with clinical leaders on the potential development of a tariff to cover allergy services and the steps necessary to make that possible. On training places, I can confirm also that the joint working group, on which the Department, strategic health authorities, NHS Employers, postgraduate medical deans and professional organisations sit, does look at those issues and make recommendations about additional places.
Derek Twigg (Halton) (Lab)
What services is the Secretary of State setting up for professionals who have become allergic to his Health and Social Care Bill and to him?
Paul Burstow
That was a pretty limp attempt. One of the most striking things about this Question Time is how many Opposition Members are yet again suffering from another health problem—memory lapses. When it comes to the Labour party’s record in government, £12 billion was wasted on a computer system that did not work, with which 60,000 nurses could have been recruited and employed for a decade.
Iain Stewart (Milton Keynes South) (Con)
8. What progress he has made in improving outcomes for NHS patients.
The Secretary of State for Health (Mr Andrew Lansley)
Last December, we published data against 30 indicators in the new NHS outcomes framework, which has been supported enthusiastically by patients, by professionals and internationally. The data show that for 25 of the new measures, the NHS improved or maintained performance, including MRSA infections being down by half and C. difficile infections being down by 40% since 2008-09. I expect continuing improvement over the coming years, as the focus on outcomes drives change and improvement.
Iain Stewart
Campaigns such as “Be Clear on Cancer” are invaluable in ensuring the early detection and treatment of serious conditions. Will the Secretary of State do what he can to ensure that there is proper co-operation between charities and local hospitals about the timing of such campaigns, to ensure that the spike in referrals that follows is dealt with as efficiently as possible?
Mr Lansley
I will indeed ensure that that happens. We work closely with the cancer charities. We are working with them as we roll out the campaign that was piloted in the east of England to encourage the awareness of symptoms and the earlier diagnosis of bowel cancer. I hope that we will ensure that the services, such as endoscopy services, are available to support that.
Mr Ben Bradshaw (Exeter) (Lab)
Is the Secretary of State aware of this week’s report from the distinguished health academic at Exeter university, Dr Mike Williams, which states that his NHS upheaval is putting patient safety at risk and making a Mid Staffordshire-style hospital scandal more likely? Given that, will he assure the House that he will publish the findings of the Mid Staffordshire public inquiry in time to inform the final outcome of the Health and Social Care Bill, if it ever gets through this place?
Mr Lansley
The right hon. Gentleman should know that the timing of the publication of Robert Francis’s public inquiry is a matter for the inquiry, not for me. It is pretty rich for him, who came to this Dispatch Box to disclaim all responsibility for what happened at Stafford hospital, to accuse us of being responsible for something like that. Something like that will not happen because our plans focus on quality for patients, which he failed to do.
Mr Adrian Sanders (Torbay) (LD)
The Secretary of State will be aware of the report today that more than 1.3 million diabetes patients have not been offered vital tests. Does that not re-emphasise the need for a plan post-2013, when the national service framework for diabetes comes to an end?
Mr Lansley
Yes, indeed. I share my hon. Friend’s view about the importance of this publication. For the first time, we are publishing the data so that we are absolutely transparent about performance in this and other areas. It is wrong that there are primary care trusts that are failing to meet the nine standards of care that are set out. That is why we published the atlas of variation. By focusing on that variation and through the commissioners’ responsibility to meet the standards, not least in the publication of the quality standards, we will deliver improving standards across the country.
Andrew Gwynne (Denton and Reddish) (Lab)
But the Secretary of State must surely be aware that, for seven weeks running since the new year, the NHS has missed its target for 95% of patients to be seen within four hours at A and E. That is precisely what Labour warned would happen when this Government downgraded the waiting times standard. Is it not clear that he has lost control over waiting times while he focuses on the largest top-down reorganisation in the NHS’s history? That is why he is losing public trust on the NHS. He should focus on what matters to people and drop the Health and Social Care Bill.
Mr Lansley
Let me tell the hon. Gentleman that the average time that in-patients waited for treatment at the time of the last election was 8.4—[Interruption.] The hon. Gentleman asked a question and I am telling him the answer. The average time was 8.4 weeks. That has gone down to 7.7 weeks. For out-patients, the average waiting time was 4.3 weeks at the time of the election. That has gone down to 3.8 weeks. The number of patients waiting for more than 18 weeks at the time of the election was—
Mr Lansley
I made it very clear after the election that, on clinical advice, we would relax the 98% target to 95%. Patients are being seen within four hours in A and E far more consistently in England than in Wales, where there is a Labour Government. Let me remind the hon. Member for Denton and Reddish (Andrew Gwynne) that we have more than halved the number of patients who wait more than a year for treatment since the election.
Dan Jarvis (Barnsley Central) (Lab)
10. What progress he has made on tackling inequalities in cancer care.
The Minister of State, Department of Health (Paul Burstow)
Through the national cancer equality initiative, we are working in partnership with patients, professionals, academics and the voluntary sector to take forward a range of projects, such as working with Macmillan Cancer Support and Age UK to tackle the under-treatment of older people, our launching of the “Cancer does not discriminate” campaign with black and minority ethnic groups and our funding of work to target lesbian and bisexual women with cervical screening.
Dan Jarvis
I am sure the Secretary of State and the Minister will acknowledge that cancer mortality rates are higher in my constituency than in his. Can he therefore justify to my constituents why Barnsley primary care trust is being forced to spend £17 million not on addressing issues surrounding the inequality of cancer care but on delivering an undemocratic, unwanted and unnecessary top-down reorganisation of our NHS?
Paul Burstow
I say two things to the hon. Gentleman: first, that the reforms will actually release resources from back-office costs and put them back into the front line, which I hope all hon. Members want to happen; and, secondly, that when it comes to our cancer strategy, we committed additional resources in the spending review to invest in cancer services. If he wants to raise specific issues with me, I will be only too happy to address them.
Mr John Baron (Basildon and Billericay) (Con)
The Minister will fully understand the importance of early diagnosis in cancer outcomes and tackling cancer inequalities. May I therefore urge the Government to include the one-year outcome measure in the commissioning outcome framework, so that we can measure the performance of clinical commissioning groups?
Paul Burstow
My hon. Friend, who chairs the all-party group on cancer, has been pursuing that issue vigorously. We certainly need to ensure that we use both proxy and other performance indicators on cancer outcomes, and I will want to continue examining whether that indicator is the most appropriate one to tell us what we need to know about improvements in cancer outcomes performance.
Liz Kendall (Leicester West) (Lab)
The hon. Member for Basildon and Billericay (Mr Baron) is right that early diagnosis is crucial for treating cancer, and it is often very worrying for people to wait for their test results. Under the current Government, waiting times for diagnostic tests have soared. Will the Minister confirm that the number of patients waiting more than six weeks for their test has more than doubled since May 2010, the number waiting more than 13 weeks has more than trebled and the average wait is up, too, by 28%? It is a simple question, so will he give us a simple answer—yes or no?
Paul Burstow
It was a somewhat longer question than that, so I hope the hon. Lady will let me go a little further than a yes or no. I tell her that at the end of December 2011 only 1.4% of patients were waiting six weeks or longer for one of the 15 key diagnostic tests, and that just five NHS trusts are responsible for about 30% of all waits of six weeks or longer. We are working specifically with those five trusts to bear down on those waits and ensure that people do not have to wait so long. Of course she is right to make her point about waits, which is why the Government are focused on the issue and have sent in the additional support needed to ensure that trusts deal with it.
Andrew George (St Ives) (LD)
11. If he will withdraw the Health and Social Care Bill.
Andrew George
I respect the Minister, but massive opposition to the Bill is mounting at the same time as its meagre support is ebbing away. Any more rational process would have resulted in the dignified withdrawal of the Bill long ago. Is there anything that would persuade the Secretary of State—frankly, he should be answering this question—to change his mind?
Mr Burns
The straightforward answer is no, because everyone, including the right hon. Member for Leigh (Andy Burnham), accepts that the NHS has to evolve to keep up and meet its challenges. What matters to patients is not who delivers their care but the quality of the care that they receive, their experience of that care and the dignity and respect with which they are treated at all times. Cutting bureaucracy by a third to reinvest £4.5 billion in front-line services between now and 2015 is the way forward. Frankly, if one goes and talks to doctors around the country, one finds that they wish that Labour’s party political squabbling would stop so that they can get on with implementing the modernisation programme.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The Minister talks about party politics. Is he not aware that not a day goes past without an organisation representing doctors and nurses coming out against his Bill? Most recently, the Royal College of Physicians is having to hold an extraordinary general meeting because of pressure from its members. The Royal College of Paediatrics and Child Health is consulting its members. Why should anyone in this House support a Bill to which the men and women who work in the health service are so opposed and which even Tory Cabinet Ministers are briefing against?
Mr Burns
I suspect that the hon. Lady does not get out and about much to meet doctors who are beginning to commission care for their patients. If she did, she would know that the mantra she is repeating from organisations that are not representative of doctors in this country—[Interruption.]
Mr Speaker
Order. The Minister of State is such an emollient fellow that I cannot imagine why people are getting so worked up, but they are getting very worked up, and they must calm themselves. We are only on Tuesday; we have got some time to go. Let us hear the Minister.
Mr Burns
Very briefly, Mr Speaker, I can say to the hon. Lady that a number of the organisations that she mentions are trade unions that do not represent the views of GPs up and down the country who are actually engaged in implementing the modernisation by commissioning care for their patients.
Lorely Burt (Solihull) (LD)
12. What steps he is taking to improve the standard of dementia care in hospitals.
The Minister of State, Department of Health (Paul Burstow)
As many as four out of 10 people in hospital have dementia, and people with dementia stay longer in hospital. We know that there is much room for improvement. That is why we have set a new national goal for hospitals actively to identify people with dementia.
Lorely Burt
According to the Royal College of Psychiatrists’ report on dementia care in hospitals, only one in three staff said that they felt that their training and development in dementia was sufficient. What action is the Minister taking better to equip staff to be able to take care of dementia patients in future?
Paul Burstow
I am grateful to my hon. Friend. Training is certainly one of the issues highlighted by the audit. We are taking a number of steps. We are working with the Royal College of Nursing, which has developed an online dementia information resource; we have been working with Skills for Care and Skills for Health to provide a series of training workshops for staff; we have been working with Oxford Deanery to trial a new approach to dementia education and training for GPs; and we are funding another audit to make sure that we keep track of the improvements that we expect to see across the NHS.
Jim Shannon (Strangford) (DUP)
What discussions has the Minister had with universities such as Queen’s university in Belfast with regard to new treatments and medication for those suffering from dementia, and when will those advances filter through to patients?
Paul Burstow
I have not had such conversations with the university to which the hon. Gentleman refers. However, this Government, right from their first Budget, have indicated their commitment to prioritising research into dementia—both the basic research that gives us the targets for detailed research and the translational research. We have put in place all the building blocks that will allow this country not only to maintain its pre-eminence but to accelerate the pace of research.
Chris Skidmore (Kingswood) (Con)
14. What progress he has made on reducing the costs of PFI schemes in the NHS.
The Secretary of State for Health (Mr Andrew Lansley)
We have made a lot of progress. All PFI schemes are having their contracts reviewed for potential savings following a Treasury-led pilot exercise. We are providing seven of the worst affected PFI schemes with access to a £1.5 billion support fund, and we are working with 16 other trusts to address long-term sustainability. As I said, in November last year the Treasury announced plans for a complete reform of the current PFI model, using public-private partnerships, private sector expertise and innovation, but at a value-for-money price for the taxpayer.
Chris Skidmore
I thank the Secretary of State for that answer. The new Southmead hospital in Bristol will cost over £400 million, to be funded by PFI, yet it will take over 30 years, at £37 million per year, to pay that off. That cannot be good value for money for the taxpayer or for the NHS. What more can the Government do to ensure that these contracts can be renegotiated in future?
Mr Lansley
My hon. Friend will be aware of the difficulties involved in the contracts that we inherited; that is true for PFI, as well as for the NHS IT contracts and many others. We have to try to use PFI contracts more cost-effectively; on average, the Treasury exercise demonstrated a 5% saving on their costs. Beyond that, we have to ensure that from now on the NHS delivers a much more value-for-money approach to using private sector expertise, including proper transfer of risk.
Nick Smith (Blaenau Gwent) (Lab)
PFI enabled the building of many new hospitals and brought benefits to millions of patients. However, the Public Accounts Committee has found that lengthy procurement timetables led to increased costs. What will the Department do to sharpen its capital funding procurement model to get a good deal for the taxpayer?
Mr Lansley
That is a sensible question, and precisely why we are pursuing, as we said in November last year, a new approach to public-private partnership that does not entail the extreme costs, delays and burdens that past PFI projects have left. We are working with projects—for example, one at Alder Hey in Liverpool—to ensure that they demonstrate enhanced value for money compared with past PFI projects.
Mr Stephen Hepburn (Jarrow) (Lab)
15. What recent representations he has received from health care professionals on the Health and Social Care Bill.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
The Government have received a wide range of representations throughout the passage of the Health and Social Care Bill, including from health care professionals, the public and voluntary bodies, and the trade unions.
Mr Hepburn
The vast majority of people, whether they work for or use the health service, see the Bill for exactly what it is: a Tory plan to privatise the national health service. When will the Minister listen to people, stop trying to pull the wool over their eyes—it is not working—and scrap this tawdry Bill?
Anne Milton
The only bit of the hon. Gentleman’s supplementary question that I recognise is a diatribe from the Labour party that perpetuates a myth about the Bill and fails to understand that the Bill is about the public of this country. This is about the people—patients—getting the health care that they need and deserve.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
May I pass on the representation of a health care professional in my constituency—one of the general practitioners involved in the commissioning group—who said that he felt the Health and Social Care Bill had been written for GPs, and that it was perfect for improving care in our community?
Anne Milton
My hon. Friend echoes many of the comments that I have heard as I have gone around the country. Without the Bill, we cannot strip out primary care trusts and strategic health authorities, which will save £4.5 billion over this Parliament. I cannot see anybody going out on a march to save PCTs and SHAs. The public want the outcomes and the quality of care that they deserve, which they were denied under the previous Government.
Mr Speaker
I remind Members on both sides of the House—Back and Front Benchers alike—that topical questions and answers must be brief.
Nic Dakin (Scunthorpe) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Health (Mr Andrew Lansley)
My responsibility is to lead the NHS in delivering improved outcomes in England; to lead a public health service that improves the health of the nation and reduces health inequalities; and to lead the reform of adult social care to support and protect vulnerable people.
Mr Lansley
The hon. Gentleman just does not know what is happening around the country. All over the country doctors taking clinical leadership in foundation trusts and NHS trusts, and GPs and their nursing and medical colleagues taking responsibility in the new clinical commissioning groups, are demonstrating that they can improve the quality of care for the patients they serve. They hear what is said by the hon. Gentleman and some of his colleagues and think they are completely out of touch with the world in which they live.
Annette Brooke (Mid Dorset and North Poole) (LD)
T5. I appreciate that the Government have allocated additional funding for social care, but what more will and can they do in the short term not only to address the current crisis in funding and ensure that funding is used creatively and efficiently locally, but to cater for those with lower-level needs through preventive measures and early intervention?
The Minister of State, Department of Health (Paul Burstow)
My hon. Friend is right about the need to invest in early intervention and prevention. In addition to the £7.2 billion that we will invest this Parliament, this January we announced an extra £120 million for the remainder of the year to support care services. Furthermore, we are funding, jointly with the Local Government Association, work to support councils in delivering improved productivity and sharing best practice to ensure that they deliver improvements to services, and not just cuts.
Andy Burnham (Leigh) (Lab)
The Secretary of State said that he would listen to doctors and nurses but yesterday shut the door of No. 10 Downing street in their faces. But now things take a sinister turn. Let me quote from a letter from an NHS director received last week by a respected clinician of many years’ standing:
“I understand that you are a signatory to a letter which highlights your personal concerns about the Health Bill. It is inappropriate for individuals to raise their personal concerns about the proposed Government reforms. You are therefore required to attend a meeting with the Chief Executive to explain and account for the actions you have recently taken.”
Will he confirm that it is now his policy to threaten NHS staff with disciplinary action if they speak out against his reorganisation?
Mr Lansley
No, it is not my policy. I do not know the letter to which the right hon. Gentleman refers, and if he had shown it to me beforehand I could have investigated it. Yesterday, I and the Prime Minister met doctors and medical professionals and they discussed precisely how to improve services for patients. I went to Queen’s hospital in Romford and met nurses, midwives and doctors working to make the trust one in which their public can have confidence and, in due course, a foundation trust. All these things—foundation trusts, clinical commissioning, patient choice—used to be things that he believed in. They are now things that we are achieving but which he has rejected.
Andy Burnham
It is, it would seem, the Secretary of State’s new top-down bullying policy, and it is happening right across the NHS. How does he reconcile that with what he used to say about whistleblowing? I remind him of what he once said:
“The first lines of defence against bad practice are the doctors and nurses”,
who
“have a responsibility to their patients to raise concerns if they see risks to patient safety. And when they do, they should be reassured that the Government stands full square behind them.”
Full square behind them so that he can plunge the knife straight into their backs! The truth about his mismanagement of the NHS is coming out: staff bullied into silence, professionals frozen out, crucial information in the risk register—
Mr Lansley
When the right hon. Gentleman has no argument, he resorts to abuse.
Ben Gummer (Ipswich) (Con)
T6. Dentists in Ipswich are increasingly concerned about having to put right work done by dentists from outside the UK who have received temporary registration from the General Dental Council, causing yet more cost to the NHS and trouble for those receiving care. How will Ministers measure the quality of those receiving temporary registration?
Paul Burstow
The hon. Gentleman raises an important issue that we are discussing with the GDC. The council’s work on revalidation will ensure that the work of those supervising foreign dentists and, where appropriate, foreign dentists themselves is properly covered.
Mrs Mary Glindon (North Tyneside) (Lab)
T2. Given that managed clinical networks for neuromuscular conditions can help to reduce the number of unplanned hospital admissions for patients with life-shortening illnesses and save the NHS money, will the Secretary of State commit to establishing such networks with funding from the NHS Commissioning Board?
Mr Lansley
As we have set out clearly, we want to promote clinical networks more widely, not just in relation to cancer and stroke, as has been the case in the past. I shall write to the hon. Lady about whether it would be appropriate for neuromuscular conditions and whether it is embraced in any plans that the NHS Commissioning Board and commissioning groups have in place already.
Mr Philip Hollobone (Kettering) (Con)
T7. Northamptonshire residents are rightly concerned that in the county in the last four months of 2011 the East Midlands ambulance service reached fewer than 69% of category A calls within eight minutes. The target is 75%. What hope can my right hon. Friend offer to local residents that this poor performance will rapidly improve?
The Minister of State, Department of Health (Mr Simon Burns)
I hope that I can give some reassurance to my hon. Friend by telling him that East Midlands ambulance service is working with commissioners, hospital trusts, community health services and social care services in taking measures to address its response time performance. NHS Milton Keynes and NHS Northamptonshire have received £1.7 million in additional funding, and NHS Midlands and East advices me that some of that has been used to fund further measures to help improve EMAS response times, including through the provision of additional ambulance crews and the deployment of hospital-ambulance liaison officers in each accident and emergency department to improve handover and turnaround times.
Mrs Madeleine Moon (Bridgend) (Lab)
T3. The Secretary of State says he acts on advice. May I advise him to read the horrendous report from Mencap that details the death of 74 people with learning disabilities due to a lack of basic care and a lack of understanding of the health care needs of people with learning disabilities? Will he follow the advice of Mencap and ensure that the undergraduate and postgraduate training of doctors and nurses includes intensive training in the needs of people with learning disabilities, so that there will be no further unnecessary deaths of people with learning disabilities due to neglect in NHS hospitals?
Mr Lansley
I am grateful for the hon. Lady’s question, and I am glad to say that I had a useful meeting with Mark Goldring of Mencap. I have read his report and, in response to what the hon. Lady has said, I would be glad to write to her and put a copy in the Library.
Karl MᶜCartney (Lincoln) (Con)
T8. Is my right hon. Friend as concerned as I am that the employment tribunal of the former United Lincolnshire Hospitals Trust chief executive Gary Walker ended in secrecy? Does he agree that the NHS should stop using public money to impose gagging orders to suppress information that is not only in the public interest, but that impacts on patient safety?
Mr Lansley
My hon. Friend will know that it is the policy of the NHS not to use compensation agreements in order to suppress information that is in the public interest, and I will certainly write to him about the case that he raises.
Kerry McCarthy (Bristol East) (Lab)
T4. Before the election, the Conservative party and the then shadow Health Secretary received substantial donations from the chairman of the private health company Care UK and his wife. Does he agree with the then Liberal Democrat health spokesman, the hon. Member for North Norfolk (Norman Lamb)—who has now been promoted to Minister—when he said:“This is a staggering conflict of interest which completely undermines the Tories’ claim that the NHS would be safe in their hands”?
Mr Lansley
If not abuse, then smear. I never received any money personally from the chief executive of Care UK. The Conservative party solicited and received donations that were declared in the normal way. They had no influence, and we would never permit any such influence over our party’s policies.
Simon Wright (Norwich South) (LD)
T9. I recently met Norwich and District Carers Forum to hear about the work that it is undertaking, together with GP surgeries in Norfolk, to help identify carers in the county. What recent steps have Ministers taken to help identify and support carers in Norwich and elsewhere?
Paul Burstow
I am grateful for my hon. Friend’s question, and I know that a lot of work is being done across the county of Norfolk between the NHS and social care. Nationally, the Government are working with the Royal College of General Practitioners, Carers UK, the Princess Royal Trust for Carers and Crossroads Care to recruit GP carers champions and volunteer carers ambassadors, and make them aware of the need not just to identify carers, but to ensure that they take the necessary action to assess and provide appropriate support, so that carers get a break from their caring responsibilities and have the opportunity both to stay in work, if that is what they want to do, and to have a life, not just a caring responsibility.
Mr David Winnick (Walsall North) (Lab)
If I was concerned only with the politics of the situation, I would be urging the Secretary of State to carry on with the Health and Social Care Bill, in view of the political fallout. However, does he realise that the strength of opposition throughout country—certainly among the medical profession, as well as the public—is based on the fact that they believe that the national health service will be seriously undermined if the measure goes through? Why is he not willing to listen to the voices of people who are so concerned that the institution—which we all believe is so necessary—will be threatened and damaged as a result of his measure?
Mr Lansley
The hon. Gentleman should go back to last year and recall that not only did we consult on the White Paper, but—following the listening exercise last year with dozens of independent health professionals, who conducted hundreds of meetings with thousands of professionals across the service, who made a substantial series of recommendations, and with the Future Forum clear that the principles of the Bill were supported, just as many organisations continue to say that they support them—we took on board and accepted those recommendations. That is why the Bill, which is in another place, was supported by a majority in this House and was supported by a majority there.
Steve Brine (Winchester) (Con)
There has been much talk today about improving outcomes of patient care—when we move beyond the politics—so will the Secretary of State commend the excellent hyper-acute stroke service that he saw with me in Winchester just a few weeks ago? As he knows, the service rightly enjoys the support of the emerging care commissioning group. Indeed, he also met those in the group and saw how positive they are about the changes.
Mr Lansley
Yes, and I am grateful to my hon. Friend for the invitation that he extended to me to visit Winchester, which is now forming part of the Hampshire Hospitals NHS Foundation Trust and looking to do so very successfully. I share with him the optimism derived from a meeting with the members of the West Hampshire clinical commissioning group. They, like others across the country, are demonstrating how they will use the responsibilities that they will be given to improve care for patients.
Mr Dennis Skinner (Bolsover) (Lab)
As the House will know, I have been a regular customer of the NHS over the last 12 years, and it hurts me to think of what is happening, after all the wonderful treatment that I had for cancer, as well as a bypass and a hip replacement. I am still here to tell the story because of the treatment by those nurses and doctors. Please stop this savage attack on the NHS, and drop this dreadful Bill.
Mr Lansley
The hon. Gentleman clearly has no idea of what is actually in the Bill or the modernisation process. It is only about simple things. It is about giving patients information and choice. It is about empowering doctors and nurses and health professionals, and it is about strengthening the ability of the NHS to improve care in the future. That is all that it is about, and it cuts the cost of bureaucracy in so doing. It will enable us and the NHS to do the things that his Government supported in the past—he might not have supported them, but his friends did—including commissioning by clinicians, patient choice and using the best qualified provider. Those are the things that his Government used to believe in, and they are the things that we are doing. There is no privatisation, no charging and no break-up of the NHS. There is only supporting the NHS.
Nicky Morgan (Loughborough) (Con)
Ministers will be aware of the Centre for Mental Health’s report last week, which showed that physical health outcomes are linked to mental health outcomes, and that both need to be treated at the same time. Can the Minister update the House on the Department’s progress on implementing its mental health strategy?
Paul Burstow
I can indeed. We will shortly be publishing a more detailed implementation plan showing the role that the NHS Commissioning Board, the clinical commissioning groups and others will play, alongside the voluntary sector, in delivering the strategy. More importantly, we are also doing work on long-term conditions that will begin, for the first time, to join up the way in which we commission physical and mental health services. We have to do that in order to deliver better outcomes for people.
Simon Danczuk (Rochdale) (Lab)
Every week in my surgery, I hear more and more residents complaining about having to wait too long for an operation, if they can get on to the waiting list at all. This top-down reorganisation is clearly exacerbating the problem. Why do not the Government just drop the Bill?
Mr Lansley
The hon. Gentleman is going to have to explain why the NHS’s performance is improving, and why it is better than it was at the election. We have cut mixed-sex accommodation, more people have access to NHS dentistry and hospital infections are at a record low. He talks about waiting times. The number of people waiting over a year for treatment has halved since the last election. The total number of people waiting beyond 18 weeks is lower than it was at the election, and the average wait for patients is lower than it was at the election. I am afraid that the premise of his question is completely wrong.
Ian Swales (Redcar) (LD)
Following the closure of a specialist ME clinic in Bolton, will the Minister review the narrow NICE guidelines on the treatment of ME, so that patients can get the outcomes that work for them, and so that the doctors providing such treatment are not placed at risk of losing their licence?
Mr Lansley
My recollection is that NICE itself is undertaking a review of the guidelines relating to the commissioning and provision of services for ME. I will check to ensure that that is the case, and if I am wrong I will of course correct the record. I will write to the hon. Gentleman in any case. It is not for Ministers to write NICE guidelines; that is a matter for NICE to deal with independently.
Mr Speaker
Order. I am sorry to disappoint colleagues but, as usual, Health questions have been heavily oversubscribed. The House is in high spirits, and it is only Tuesday afternoon.
Points of Order
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
On a point of order, Mr Speaker. I wish to raise with you an issue that goes to heart of the rights of hon. Members—whether they have been elected here 11 times and are in their 42nd year as an MP or whether they came to this House for the first time at the last election. The greatest right of hon. Members is freedom of speech within the rules of order. On that basis, I went to the Table Office before questions yesterday to table an early-day motion relating to the maltreatment and mistreatment of one of my constituents. I discussed it with the Clerk to whom I handed the motion, and he told me that it would be printed today unless I heard from him meanwhile.
Not having heard from that Clerk meanwhile, I assumed that the early-day motion would be printed, but when I looked at the list, I found it was not there. With some difficulty, I then made further contact with the Table Office, a representative of which told me that the early-day motion was still being examined to see whether it was in order. The Table Office had seven and a half hours yesterday and six hours today to look into it. It discussed with me the basic question that it said needed answering—whether the early-day motion contained any sub judice elements. It did not. I have found it impossible to get an answer, 25 hours after I tabled the motion, as to whether it will be printed so that I can air my constituent’s grievance and raise it again.
I have to say that I regard it as discourteous and incompetent of the Table Office to have left the situation in this way on a matter that is crucial for any Members of Parliament, whose servants the Table Office staff are—they are not in charge of us; they serve us. That being the case, Mr Speaker, I ask you first to instruct the Table Office to print my motion and, secondly, to investigate why some people working in that Table Office believe that they have the right to dictate to Members of Parliament in carrying out their duties.
Mr Speaker
I am sorry to learn of the right hon. Gentleman’s disappointment and of the sequence of events that he has relayed to the House. I hope it will be helpful to him if, on the basis of what I have been advised thus far, I respond.
I say to the right hon. Gentleman and the House that I have a duty to uphold the sub judice rule. I note what he said about that, but I have something to say. That rule applies equally to written as it does to oral proceedings, and I expect the Table Office to support me in upholding the rule by taking precautions to ensure that there is no inadvertent breach of the rule. It can sometimes take a little time to check whether there are active proceedings in a particular case. I will take steps to assure myself that the right hon. Gentleman’s motion has been treated no differently from how one presented by any other Member would be treated in similar circumstances. However, I stress the importance I attach to taking all reasonable steps to ensure that the sub judice resolution of the House is abided by at all times.
I have been informed by the Table Office that the Ministry of Justice has confirmed that there are no active proceedings and that the right hon. Gentleman’s early-day motion has been tabled. I hope he will understand that I am responding on the basis of what I have been advised. I just want to say one other thing to the right hon. Gentleman, which is that I hope that nobody who works in this House and serves its Members would ever suppose it is his or her role to dictate, to rule or in any sense to trump Members. Everybody is here to serve Members, which should be a matter of pride. I am genuinely saddened if the right hon. Gentleman feels let down. I am happy to look into the matter further. I do not want him to be unhappy, and I hope he will take it in the right spirit if I gently add for his benefit and that of the House that I am relieved at least that at the point at which he discovered against his expectations that his motion had not been tabled, I was not myself anywhere near him.
Sir Gerald Kaufman
Further to my point of order, Mr Speaker. I should point out that my courtesy towards you is maximal in comparison with any that I show to anyone else in the country apart from Her Majesty the Queen.
That having been said, anyone reading the 120 words of my motion would have had to be hyper-critical to imagine that it related in any way whatsoever to court proceedings or to the sub judice rule, and that being so, I hope that in future the Table Office will not take to itself rights over what Members of Parliament themselves have the right to say beyond what you yourself, Mr Speaker, would accept.
Mr Speaker
The role of the Table Office is to assist the Speaker in upholding the rules of the House. I hope that that is widely understood.
The right hon. Gentleman will understand that I cannot debate this matter further now, and that it would not be right to do so, but he has made his point very clear. I have heard it, representatives of the office in question have heard it, and I hope that that will suffice for now. I will keep the matter under close review, and I am sure that the spirit of what the right hon. Gentleman has said will be respected.
Mr David Winnick (Walsall North) (Lab)
On a related point of order, Mr Speaker.
Mr Speaker
I will take a point of order from a Member who first arrived in the House four years before the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman).
Mr Winnick
You have made a point that I was not going to make, Mr Speaker, except perhaps in passing.
I have the highest respect for my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman). His point of order illustrated that, having been in the House for nearly 42 years, he is still always willing to act on behalf of his constituents, which is highly commendable. I do not think that a single Member in the House would disagree with that.
However, given that my right hon. Friend was highly critical of the Table Office, I wish to put on record that during my years in this place, I have always found those at the Table Office co-operative and courteous. I have never found them rude at any stage. Had I done so, I should have reported the matter to the Clerk of the House or to the Speaker, as the case might be. I look on the Clerks of the House, as on the other Officers, as dedicated servants of the House of Commons who serve the House of Commons, and I think that that should be put on record.
Mr Speaker
I appreciate what the hon. Gentleman has said, and I think that the Clerks who serve the House will appreciate it too. Perhaps we can leave it there for today.
Mr Speaker
I am sure that the hon. Gentleman wishes to raise an entirely separate and unrelated point of order.
Dr Lewis
On an entirely separate and unrelated point of order, Mr Speaker. No doubt you will recall the excellent work done by the Leader of the House—whom I am pleased to see sitting on the Front Bench at this moment—in relation to the question of the demonstrations in Parliament square. I believe that we have freedom of speech in the House, but that does not mean that we have the freedom to shout and bawl our opinions incessantly whether people wish to hear them or not. I understand, however, that an application has been made to Westminster city council to reinstate permission for amplified noise to be used to broadcast, for hours on end, abusive and hostile political messages at this House, in the way that was done—causing maximum disturbance—by the late Brian Haw, notwithstanding his lawyers’ assurances to Westminster city council when they applied for a licence that he would not use it to harass people going about their normal work in the Chamber.
May I ask, Mr Speaker, whether you have had any indication of a statement from the Leader of the House on whether he is willing to make representations to the city council that no requirement of freedom of speech enables people to have the right to broadcast at top volume, when no demonstration is taking place, political messages which are intended to disturb people going about their lawful occasions, not least the armed security guards who have to be on constant readiness in front of the Houses of Parliament?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. Certainly no concept of free speech should mean that some people have a right to shout at the tops of their voices through an amplifier at other people irrespective of those other people’s wishes. The point that the hon. Gentleman has made seems to me to be entirely reasonable; but the Leader of the House is stirring in his seat, and I feel certain that the House will want to hear what he has to say.
The Leader of the House of Commons (Sir George Young)
Further to that point of order, Mr Speaker. I share my hon. Friend’s concern, and I am planning to respond to the application to Westminster city council in terms of which I think he would approve.
Mr Speaker
It sounds as if the Leader of the House may not be the only one, but we are grateful to him for what he has said.
Bill presented
European Convention on Human Rights (Temporary Withdrawal) Bill
Presentation and First Reading (Standing Order No. 57)
Mr Peter Bone, supported by Mr Andrew Turner, Mr Nigel Dodds, Mr William Cash, Mr Philip Hollobone, Mr David Nuttall, Philip Davies and Mr Douglas Carswell, presented a Bill to make provision for the temporary withdrawal of the United Kingdom from the European Convention on Human Rights.
Bill read for the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 308).
Road Safety (No. 3)
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr John Leech (Manchester, Withington) (LD)
I beg to move,
That leave be given to bring in a Bill to require drivers to undertake an eye test when renewing a driving licence; to make provision to reduce the permitted blood alcohol level for drivers from 80 mg per 100 ml of blood to 50 mg; to make the turning back of a vehicle milometer, except in specified circumstances, a criminal offence; to promote safe walking, cycling and use of public transport by children to and from school; and for connected purposes.
My Bill, which is appropriately but rather unimaginatively named the Road Safety (No. 3) Bill, has an overarching aim of improving safety on our roads for the benefit of all, through a reduction in the number of people drink-driving; through a reduction in the number of people driving with poor eyesight; by improving the roadworthiness of vehicles; and through the promotion of measures to encourage and prioritise walking, cycling and the use of public transport. In the short time that I have, I will briefly outline the plans for the Bill, and why it would be important in helping to improve road safety.
The North review of the drink-drive limit recommended a reduction in the limit from 80 mg to 50 mg, which would bring us into line with most of Europe. This was rejected by the Government, with the argument that we needed to concentrate our resources on tackling those drink-drivers over the 80 mg limit before focusing our attention on those who drink more than 50 mg but below the 80 mg level. The argument was that the Government were winning the battle, but there was still work to be done.
Unfortunately we are not winning the battle, which is why the Government need to look again at this issue. Recently published figures from the Christmas period show that despite the number of people being tested going down, the number of people over the drink-drive limit went up. In 2010, according to Department for Transport figures, 250 people were killed and 1,230 seriously injured by drink-drivers. Statistically, drivers with a blood alcohol level between 20 mg and 50 mg have a three times greater risk of dying in a vehicle crash, and are at least six times as likely to do so when their blood alcohol level is between 50 mg and 80 mg. When the drink-drive limit was reduced in Australia, there was a significant decrease in fatal accidents, including a massive 18% drop in Queensland. Assuming that a change in the UK would have similar results, we would see a reduction of 144 road deaths and 2,929 serious injuries. If we use the data from Europe, the evidence suggests that deaths could be reduced by a minimum of 77 a year to a maximum of 168, and injuries could be reduced by between 3,611 and 15,832 in England and Wales.
One of the major problems with the current alcohol limit is that people do not really know what the current limit is. According to confused.com in 2011, 51% of people admitted that they did not know what the legal alcohol limit was for driving. Even more worrying is that of the people who think they do know the limit, most do not actually know what amount of a particular drink will bring them to that limit. People are regularly found to be over the limit who genuinely believed that they were below it. By reducing the limit we would send a strong message to those people that they cannot even risk one drink without potentially breaking the law and losing their licence for a minimum of 12 months. Of course this is not going stop the serial offenders who will exceed the limit regardless—only enforcement will deal with those people who show no regard for their own or anyone else’s safety on the roads—but it would send the message that even a small amount of alcohol is simply not acceptable, and it would encourage far more drivers not to drink at all when they are driving.
It is frightening to hear that 10% of all drivers would fail their driving test if they retook, it simply because of poor eyesight. More than 50% of the population wear glasses, and the figure rises dramatically to more than 80% among the over-45s. According to the International Glaucoma Association in 2009, a person can lose 40% of their vision before they realise that they have a problem. According to the RAC, one in three Britons has such poor eyesight that they are unable to see properly when driving, and 20% have had an accident as a result of poor vision.
Evidence from the road safety charity Brake showed that 75% of drivers support compulsory eye tests for drivers every five years. My Bill would introduce a compulsory eye test on renewal of the 10-year photo licence, with a commitment to review its effectiveness. Evidence from medical checks in Spain and Holland shows that one driver in 10 aged 50, and one in six aged 70, drives with their eyesight not properly corrected.
We have all heard tragic individual stories. In 2010, two stories were prominent in the media. In one, an almost blind 78-year-old driver killed a pedestrian and in the other a driver of a heavy goods vehicle was charged with driving with poor eyesight after he killed a cyclist in London. A change in the law would help to reduce the instances of driving with poor eyesight and make drivers more sensitive to how serious a problem poor eyesight can be. Compulsory eye-testing has the support of a number of road safety organisations, and I am pleased to say that the cycling charity CTC strongly the supports this measure. It has said:
“the current legal framework around eye sight testing for drivers is utterly inadequate; ensuring a proper eyesight test at each licence renewal would certainly improve matters.”
Some people might argue that the third element of the Bill is less about road safety and more about tackling fraud, but I would argue that it is about both. It is estimated that car clocking costs British consumers a whopping £580 million each year. The actual scale of the problem is difficult to judge because many cars have their mileage reduced shortly before the first MOT at three years and therefore do not show up in Government figures, thus masking the true cost. According to the BBC, more than 681,000 cars recorded a lower mileage last year than they did in the previous year’s MOT, in 2010, and HPI estimates that one in eight vehicles that it checks has a mileage discrepancy. My Bill will make it a criminal offence to reduce the mileage on the clock and help to bring to an end the deliberate practice of making a car appear to be worth more than it actually is.
According to the insurance company General Accident, only 9% of people are confident that car clocking is not a problem and 92% of people thought it should be treated more seriously by the law. Not only would my Bill do that, but it would have a positive impact on road safety, because owners of vehicles would have confidence that the mileage on their vehicle was correct and that routine maintenance had been carried out at the appropriate mileage for the type of vehicle.
Lastly, but by no means least, my Bill seeks to make roads safer for pedestrians and cyclists, putting a particular emphasis on children travelling to school. I have unashamedly incorporated elements of the Sustrans “Free Range Kids” campaign and The Times “Cities fit for cycling” campaign. My Bill seeks to give extra priority to measures that promote walking and cycling, particularly encouraging children to get on their bikes. Nearly half of all kids want to cycle to school, but only 2% do so. The Bill would set a target of 2% of the Highways Agency budget being set aside for cycle infrastructure, putting cycle safety at the heart of the driving test and introducing additional safety measures to trucks and lorries.
In the previous Parliament, I introduced a ten-minute rule Bill to reduce the default speed limit on local roads to 20 mph, but unfortunately it did not become law. Although this Bill does not go that far, it would introduce a 20 mph limit on residential streets with no cycle lanes and around all schools. It would also introduce a duty in respect of all new residential streets to incorporate cycle lanes and 20 mph limits in the design of the new road.
Road accidents are the single biggest cause of accidental death among five to 14-year-olds, and traffic causes 50% of all accidental deaths of young people. About 5,000 children under the age of 16 are killed or injured on our streets every year, with about 20% of those accidents occurring on the way to and from school. People have only a 50% chance of surviving being hit at 35 mph, but that increases to 97% when speed is reduced to 20 mph. Despite claims to the contrary by the self-proclaimed road safety organisation the Association of British Drivers which, in my opinion, does not appear to have any interest in road safety, 71% of adults support 20 mph speed limits in residential areas and only 15% of people are against them.
It is time to put walking and cycling at the heart of our policy making. By putting walking and cycling first, by making our cars safer and by ensuring that all drivers are fit to drive, we can make our streets safer and a more welcoming environment to encourage people back on their feet and back on their bikes.
Question put and agreed to.
Ordered,
That Mr John Leech, Dr Julian Huppert, Caroline Lucas, Sir Bob Russell, Tessa Munt, Andrew George and Julie Hilling present the Bill.
Mr John Leech accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 307).
Welfare Reform Bill
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:56 - The House divided: - Ayes: 316 / Noes: 263 - Question accordingly agreed to.
Mr Speaker
I must draw the attention of the House to the fact that financial privilege is involved in all the Lords amendments. If the House agrees to the amendments, I shall ensure that the appropriate entry is made in the Journal.
Clause 11
Housing costs
The Minister of State, Department for Work and Pensions (Chris Grayling)
I beg to move, That this House disagrees with Lords amendment 3B, and Lords amendment 26B.
Mr Speaker
With this it will be convenient to discuss the following:
That this House does not insist on its amendment 19A, and agrees with Lords amendments 17B to 17D and 19B.
That this House agrees with Lords amendment 73BA.
Chris Grayling
If I may, I shall deal first with amendments 17B to 17D and 19B, on employment and support allowance time-limiting, and amendment 73BA, on child maintenance. The Government wish to accept these amendments.
Amendments 17B to 17D and 19B do not change the Government’s existing policy on the time-limiting of contributory ESA. The limit will remain at 365 days for those in the work-related activity group and will take effect from April 2012. I believe that the limit strikes an appropriate balance between the needs of sick and disabled people and the interests of taxpayers who contribute towards the cost. It will make a significant contribution to reducing the fiscal deficit, which I remind hon. Members once again is the most pressing priority facing the coalition Government. We estimate that the one-year time limit will reduce expenditure by £1 billion a year by 2014-15.
We have listened carefully over the course of the debate, however. The amendments would allow a future Government, if they could identify an appropriate funding source, to increase the length of the time limit by order rather than further primary legislation. We have considered that and decided that it is a sensible and appropriate use of an order-making power and we are happy to accept the amendments.
Amendment 73BA clarifies some of the powers introduced by the previous Government under the Child Maintenance and Other Payments Act 2008 and gives examples of the provisions that may be made under regulations. I should stress again that it does not imply any change to our proposed policies on charging. Specifically, I highlight the fact that we maintain our commitment to a maximum application charge of £20 and to collection charges within the ranges set out in the January 2011 Green Paper.
On Report in the Lords, we committed to undertake a review of the charging policy 30 months after the implementation of the powers, to understand their effect and impact. The amendment clarifies that if changes to our approach are required following that review, we will have the ability to make them. Although our core proposals on charging remain the same, the amendment ensures that in future—particularly following our review—we will be able to change the charging regime, with specific reference to apportionment and waivers, if we deem such changes to be necessary.
I shall deal now with housing, where I am afraid we do not agree with Lords amendments 3B and 26B. As you indicated, Mr Speaker, the amendments infringe the financial privileges of this House, and if they are rejected that will be the reason given to the House of Lords.
Let me first ensure that the House is clear about the financial implications of the amendments. We know about the big financial challenges we face. Since we last debated the Bill, Moody’s has placed the UK’s triple A credit rating on negative outlook and made it clear that the Government’s strategy is necessary to retain the credibility of our nation in the international financial arena. That is not a context in which we can relax public spending. We made it perfectly clear on 1 February, when we last considered Lords amendments, that the earlier amendments, which could cost around £300 million a year, were unaffordable. The Government’s response to amendments costing £100 million, as these new amendments would, is no different.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
When the Minister considers financial implications, does he bear in mind the fact that the Government’s own calculations indicate that 66% of disabled people will bear the burden of an average loss of £13 a week? Is it any wonder that organisations such as Mencap are appalled that it takes the House of Lords to point out to us the unfairness of such proposed legislation?
Chris Grayling
The right hon. Gentleman needs to remember what the amendments are about. Large numbers of people in our community are under-housed and others are in temporary accommodation. We have formed the view that it is neither good value for the taxpayer nor right for those people that we pay for those in social housing to have spare rooms. That is the purpose of our amendments.
Sheila Gilmore (Edinburgh East) (Lab)
If the Minister is successful and people move from homes that they under-occupy and other people move in, and assuming that the same proportion of people are on housing benefit, there will be no financial saving. Which is his real argument?
Chris Grayling
The hon. Lady simply has not thought things through properly. At the moment, we are paying expensive temporary accommodation costs, partly because the previous Government—her own party—had such a lamentable record in office in building social housing. When Opposition Members make those claims, they should remember how poorly they performed in that regard.
Ann Coffey (Stockport) (Lab)
I seek clarification from the Minister. The new under-occupancy rule will only apply to working-age housing benefit claimants. To be of working age, claimants have to be under the qualifying age for pension credit, which will be 61 and a half in April 2013. Will the Minister clarify whether, on the introduction of the change to occupancy in 2013, a couple claiming housing benefit are protected from the change if one of them has reached pension credit qualifying age, or will both need to do so?
Chris Grayling
The approach we are taking across all our reforms is that if somebody in a household is of working age, we expect them to work. All our efforts and the support we are putting in place are designed to ensure that people work and that households benefit from an income from employment rather than otherwise.
As I said, the amendments would cost £100 million. They are not modest amendments, as suggested in the other place. In fact, Lord Best, who proposed them, believed that they might cost even more—£150 million a year. Either way, it would significantly reduce the estimated annual savings of £500 million. We simply do not have a blank cheque that will cover the costs of the amendments.
To give their lordships credit, there was at least some acknowledgement in the other place that £100 million is “serious money.” I am glad we can agree on that point; the amendments are certainly not modest. It is incumbent on us to do what we can to drive down the spiralling cost of housing benefit. Left unchecked, expenditure on housing benefit would reach £26 billion by 2014-15. The shadow Secretary of State is always complaining about the cost of housing benefit, yet he and his party have been consistently hostile to measures that bring the cost under control.
Mr Edward Timpson (Crewe and Nantwich) (Con)
Will my right hon. Friend confirm that foster carers will not be included in the new under-occupation rules because of the specific discretionary housing payment that will be made available to local authorities to compensate foster carers to ensure that they do not end up unable to continue their great work in our community?
Chris Grayling
I give my hon. Friend that assurance and pay tribute to him. I know that he has a deep knowledge of the sector. It is very important, but the approach that we have sought to take is that there should not be a one-size-fits-all solution. Where we can, we should localise and give discretion. There may be circumstances in which somebody is still a foster carer and has a property that is much too large even for those needs, but we want to make sure that we provide proper protection for those who carry out such a vital role in our society. We are making substantial amounts of money available to local authorities so that they have the discretion to protect the people who are performing that important role.
Charlie Elphicke (Dover) (Con)
One concern that I have in my constituency is that many people live in overcrowded accommodation and have been waiting to get accommodation with the space that they need. Across the country there are 250,000 people in that position. Meanwhile there are empty-nesters rattling round in houses with spare rooms. Surely we should have an incentive for people with excess housing space to move out and enable overcrowded families to have the space that they need.
Mr Speaker
Order. Before the Minister of State responds, may I remind the House that we have only an hour for Lords amendments? After the Minister, there is another Front-Bench speech. There are Back Benchers who wish to speak, so I exhort colleagues who are intervening to remember that they should do so briefly.
Chris Grayling
Indeed, Mr Speaker, and I shall try to be as rapid as I can for that reason.
It would be all too easy to bow to pressure to backtrack on these reforms, but we will not do that for precisely the reasons set out by my hon. Friend the Member for Dover (Charlie Elphicke). There is a real problem of people in temporary accommodation, and we also have about a million spare rooms being funded by housing benefit. We must sort out the situation and solve the problem to which he rightly refers. These reforms are designed to do that.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am grateful to Ministers for their engagement on this difficult but important issue. With reference to families who cannot find suitable alternative smaller accommodation but are in the categories that the Government have wisely exempted from the benefit cap, will the Minister explain to me why they should be penalised and where they will find the money to meet the extra bill—potentially £750 a year?
Chris Grayling
I know my right hon. Friend has expressed concerns about the policy. Let me say to him that we will carry out detailed reviews of it, as I know he wishes us to do. We will look at the impact of the policy. We have a year to work with the families involved, and we are providing substantial sums. An additional £30 million was announced as part of the debate on these measures, as well as the substantial amounts available for discretionary housing payments. It is our expectation that in most cases what we will see over the next 12 months is a change of circumstances that addresses many of his concerns, but there will be discretionary funds available to local authorities so that in his constituency and others they can deal with the kind of situation that he has described.
Simon Hughes
If the Bill goes through, but before regulations are laid, will the Minister work with colleagues and local government to make sure that the people affected have certainty? The problem with discretionary payments is the uncertainty, and people who cannot work have enough uncertainty already.
Chris Grayling
Let me give my right hon. Friend an assurance that we will work closely with him on the process of reviewing the impacts and over the coming months we will continue our dialogue with him, which has been very helpful and constructive, to make sure that we make him aware of the approach that we are taking and that we seek his input in that approach. I give him that assurance.
Mr Alan Reid (Argyll and Bute) (LD)
I am pleased to hear my right hon. Friend say that there will be discretionary housing payments to take into account particular circumstances. I draw his attention to the particular circumstances of islands and very remote communities where, because of the nature of the housing stock, there may be no alternative for people to move to. When funds are allocated to local authorities, will the position of islands and remote communities be taken into account?
Chris Grayling
We will certainly look very carefully at that. I give the hon. Gentleman that assurance, and again we will talk to him in detail about those issues.
This latest amendment looks to protect certain groups from the size criteria measure where they have one spare bedroom and no suitable offer of alternative accommodation has been made. However, I remind hon. Members that we have already committed to providing extra help—£30 million—to some of those groups, particularly foster carers and disabled people living in adapted accommodation. That money can help around 40,000 claimants. We are not ignoring the fact that some people will find it hard and have sought to put safeguards in place. Our aspiration is to protect the most vulnerable in society while also dealing with the broader challenge of under-occupation. There are a number of responses that individual households can choose to make to this measure.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The Minister has sketched out for the House a number of important concessions for groups that will be adversely affected by this policy. When does he expect guidance on how discretionary housing payments will actually work to be available for review by Members of this House?
Chris Grayling
Of course, many of the local decisions will be taken by local authorities, but we will provide information to the House as quickly as we can. We are aware that we have 12 months before the measure is in place and so will work quickly. Indeed, we are already working with local authorities to plan ahead and will be happy to make information available to the House in a timely way as it becomes available.
It is all too easy to criticise this measure and propose costly amendments, but I think that that serves to highlight the real challenges we face. What we propose is fair for the taxpayer and for tenants in the private sector who receive housing benefit based on the same size criteria. There is no plausible fairer or affordable alternative.
Nick de Bois (Enfield North) (Con)
Will the Minister help me to put this in context? Is he aware that there are high earners living in social housing with excess bedrooms who really should make way for other people who need the space?
Chris Grayling
As we know, there are even people close to this place who still occupy social housing. It is our view that, where possible, social housing should be targeted at those on the lowest incomes, those who face the greatest challenges and those who are perhaps struggling in temporary accommodation. I think that those who are living in accommodation that is out of kilter with their financial circumstances might think about their personal circumstances, as was discussed when this matter was before the House previously.
The average weekly reduction will be £14. Nearly 80% of those affected are under-occupying their accommodation by just one bedroom and so are likely to see an average weekly reduction of £12. By comparison, for private sector tenants the average cost of an extra room is about £20 a week, based on local housing allowance rates. What we are doing is introducing fairness and consistency of treatment for social sector and private sector tenants alike.
Dr William McCrea (South Antrim) (DUP)
Can the Minister assure me that he and his Department are working closely with the devolved Administrations, especially the Minister for Social Development in Northern Ireland, on his proposed reforms?
Chris Grayling
I am happy to give the hon. Gentleman that assurance. My noble Friend Lord Freud, who has direct responsibility for housing benefit matters in the Department, is also responsible for liaising with the devolved Assemblies and so is having those kinds of discussions all the time.
Stewart Hosie (Dundee East) (SNP)
In his discussions, will the Minister make it clear that the Scottish Government have pointed out that some 70,000 families will be affected by this proposal? There was a huge imbalance between the 95,000 properties that are under-occupied and the 26,000 that are over-occupied, and the cost to people in Scotland and the Scottish economy will be around £54 billion a year. That does not seem to make sense, particularly when he could not answer the point made by the hon. Member for Edinburgh East (Sheila Gilmore), which is that if his policy works there will be no under-occupancy to penalise.
Chris Grayling
I suggest that the hon. Gentleman check his facts. The total cost of housing benefit is £26 billion a year, so this cannot cost the Scottish economy £54 billion a year.
Our Department and local authorities have a good track record of delivering housing benefit reform. I am confident that these changes will be communicated and delivered successfully in the same way the local housing allowance reforms were delivered last year. We will work hard to ensure that there is a smooth transition in order to address the challenges and protect the most vulnerable through discretionary payments.
Mr Speaker
We are extremely grateful to the Minister of State for concluding so pithily, and I am deeply obliged to him for doing so entirely when I expected him to.
Stephen Timms (East Ham) (Lab)
I hope that Government Members think long and hard before simply voting down Lords amendments 3B and 26B, but at the outset let me comment on the other amendments, as the Minister did.
I want in particular to welcome the Government’s concession on time-limiting contributory employment and support allowance for people in the work-related activity group. Amendments 17B to 17D and 19B provide in circumstances prescribed in regulations for a longer time limit than one year. That is a very welcome change, and I am grateful to Ministers for permitting it. The Government have made it clear that they have no intention of bringing forward such regulations, but the Bill will now at least allow a future, more fair-minded Government to do so, and I welcome that change very much.
The Minister in the other place also gave some assurances about people being treated for cancer, which has been an important issue in this debate. His assurances were, however, rather vague. They do not help people recovering from strokes or from severe mental health problems, or others who have no chance at all of getting back into work within a year, but the assurances in respect of cancer patients, in so far as they went, were helpful.
Amendment 73BA, which the Government tabled, would allow them to waive charges for the parent with care when accessing the child support system in specified circumstances. Again, we have no idea what those circumstances will be, but the amendment is nevertheless helpful rather than unhelpful.
There also needs to be movement on the policy addressed by amendments 3B and 26B, which the Minister before us still opposes. They have some perfectly reasonable aims, to which attention has been drawn in this debate. Under-occupancy of social housing is a problem; many people are stuck—overcrowded—on housing waiting lists; fewer people under-occupying would help; and a workable penalty for people who refuse an offer of smaller, more suitable accommodation could achieve that aim.
Mr Tom Clarke
I follow absolutely my right hon. Friend’s logic, but in the field of disability does he not recognise that in many cases the so-called extra room is there for a carer or for other physical reasons to help the disabled person? It is therefore pretty unacceptable to change that arrangement.
Stephen Timms
My right hon. Friend is absolutely right, and that is why the Lords propose in their amendment an exemption for people in receipt of disability living allowance, thereby addressing exactly that point.
Our original amendment would have penalised under-occupation in a workable way. If a tenant refused a suitable offer of a smaller home, they would suffer the penalty. If, however, no smaller home were available, they would not suffer that penalty. Unfortunately, that amendment was defeated in our previous debate, but I pay tribute to the 12 Liberal Democrat Members and two Conservative Members who supported it. I am glad to see some of them in their places this afternoon.
Legal challenge to the Government’s policy seems inevitable, because it penalises people for a situation that it is impossible for them to change. The amendment could not be reintroduced in the other place because the Government claimed financial privilege, so this afternoon we have in amendments 3B and 26B a much weaker proposal. It does, however, at least protect those, like the people to whom my right hon. Friend has just drawn attention, who will be hardest hit if the Government’s policy goes through.
The proposal would safeguard four tightly defined groups: first, people in the employment and support allowance support group—those who are too ill to be expected to return to work in the near future; secondly, adults and children who receive disability living allowance or its successor, the personal independence payment; thirdly, war widows; and fourthly, foster carers, because for the purposes of housing benefit calculations foster children do not count towards a bedroom need.
Let me underline how modest the proposal now is. Many Members will take the view, for example, that war widows should not be penalised for having a spare bedroom. The proposal, however, would not protect war widows in that way. It simply says that no war widow should be fined for under-occupying her home unless she has been offered appropriate smaller accommodation. If such an offer has been made to her and she has refused it, under the Lords amendments she would be penalised. The amendments would protect her position until such an offer was made. Only tenants in one of the four specific groups would have even that safeguard. Everybody else who was under-occupying their social tenancy would, under the amendments, be penalised even if it was impossible for them to move to somewhere smaller.
The Child Poverty Action Group has highlighted an example of how similar rules currently apply in the private rented sector, which highlights the point made by my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke). Let us consider a claimant who has two daughters, one of whom has severe and uncontrollable epilepsy with frequent fits during the night. Her social worker and occupational therapist agree that the two girls need separate bedrooms. The claimant currently rents a three-bedroom house, but housing benefit covers the cost of only a two-bedroom house. The Lords amendments would fix that situation for social housing because the daughter is in receipt of disability living allowance.
I will now consider the hypothetical example of a couple in which one person has terminal cancer, which puts them in the employment and support allowance support group for people who are not expected to work again. That is one of the four specific groups that the Lords amendments would protect. The couple have a spare bedroom in their two-bedroom council house because their child moved out recently. They would be happy to move to a one-bedroom council or housing association flat but none is available. Under the Minister’s policy, that couple will be penalised, on average by £12 a week. Under the amendments, because of the exceptional circumstances, they would not be penalised. That would be the modest and reasonable effect of the amendments that the Lords agreed.
The National Housing Federation tells us that 180,000 social tenants in England are under-occupying two-bedroom homes, but that only 68,000 one-bedroom social homes became available to let in the year 2009-10. The impact assessment from the Department for Work and Pensions, which is well worth reading, states:
“According to estimates from DCLG there is a surplus of 3 bedroom properties, based on the profile of existing working-age tenants in receipt of Housing Benefit, and a lack of 1 bedroom accommodation in the social sector. In many areas this mismatch”—
I am quoting the Department here—
“could mean that there are insufficient properties to enable tenants to move to accommodation of an appropriate size even if tenants wished to move and landlords were able to facilitate this movement.”
That is the reality in many places. There simply will not be a one-bedroom home to move to. That will be the case in the constituency of the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), who intervened earlier, and in my constituency. Of course, the policy will not release a single one-bedroom home, because one cannot under-occupy a home with one bedroom.
The couple in the example, in which one person has terminal cancer, would see a cut of £12 a week or nearly £60 a month in their income. That is the average across the country. They would somehow have to make that up to their landlord from other income. The Department, no doubt trying to be helpful, gives some suggestions in the impact assessment of how they might do that:
“In these circumstances individuals may have to look further afield for appropriately sized accommodation or move to the private sector, otherwise they shall need to meet the shortfall through other means such as employment, using savings or by taking in a lodger or sub-tenant.”
I ask the House to reflect on each of those three suggestions in the case of somebody with terminal cancer. People in the ESA support group are, by definition, not in a position to work. That is why the Government have placed them in the support group. That suggestion therefore does not help. The DWP suggests instead that our terminally ill tenant in a two-bedroom flat should take in a lodger to help pay the rent. One has to ask whether the people promoting these policies have ever met anyone who will be affected by them. Of course, in many cases, the social landlord would not permit somebody to take in a lodger under the terms of their tenancy. The Department’s other suggestion is that they can use their savings. People in receipt of income-related ESA do not have very much saved—if they did, they would not receive income-related ESA.
Another alternative, as the impact assessment suggests, is that the tenant will have to move out of their council home into the private sector. In that case, their housing benefit will rise sharply. Where is the gain in forcing that to happen? The National Housing Federation, whose members are very worried about the change that the Government insist on making, makes the point that
“a couple with one child moving into the private sector from a three bed social flat in Crawley would be entitled to around £66 per week more in benefit to cover their additional housing costs.”
The key point is that it will be impossible for many of those affected to avoid the penalty. If suitable alternative accommodation can be offered to them, then fine, they can move and will no longer be under-occupying, and their benefit will continue to cover their full rent. The Lords amendments specifically allow for that. However, if there is no smaller flat available, our cancer patient will just have to take the £60 a month hit. How can that be justified?
The Minister will tell us, as he has before, that £30 million has been made available to councils in discretionary housing payments to avoid penalising a limited number of households. However, the Minister in the other place made it clear that, as the Minister of State hinted today, that money is to help foster carers and disabled people with adapted homes—so no help there for our terminally ill tenant.
Even for foster carers and disabled people in adapted homes, contrary to the impression that the Minister of State gave to the hon. Member for Crewe and Nantwich (Mr Timpson) and the right hon. Member for Bermondsey and Old Southwark, there will be no certainty. People wanting help will have to go to their local council and ask for it, because it will be discretionary—that is what the word means. It will up to each local council to decide what it does with the money. It could use it for that purpose, or it could use it for a different one. If other people have already taken all the discretionary funding that has been provided, that will be it. No further help will be available.
Charlie Elphicke
I understand that the policy in the Lords amendments would cost the Exchequer £150 million. How would it be funded?
Stephen Timms
The hon. Gentleman should reflect on the fact that, as I have described, the costs will be greater in a number of ways with the Government’s provisions in place than they would be if the Lords amendments were retained.
Before I leave the topic of discretionary housing payments, it is worth my noting how the extra £30 million has been found. Initially, the average penalty for under-occupying by one bedroom was going to be £11 a week, and now the Government have increased it to £12 a week. They have increased the penalty for everybody affected in order to scrape together the extra cash to increase discretionary payments.
The last time this policy was debated, we offered an effective alternative whereby a tenant would have their benefit cut as a penalty if they refused a suitable move. Unfortunately, Government Members threw it out. The Lords amendments would limit that safeguard to the four groups that I have mentioned—the sick, the disabled, war widows and foster carers.
Ministers have said that their policy will be a work incentive, but the support group comprises people who are not in a position to work. A work incentive will do them no good at all. Let us call a spade a spade: this is a spiteful cut in people’s income. Foster carers provide a service that saves the Exchequer billions. The Fostering Network has warned that people will be forced by the penalty to give up fostering, which will increase costs to the Exchequer. War widows and widowers have seen their loved ones die for their country. Their grieving barely over, they will be fined under the Government’s policy because they have one bedroom too many. I ask whether that is really what Government Members came into the House to do to their constituents. The Government’s policy, without the Lords amendments, will penalise everybody regardless of whether they could move.
Fourteen Government Members joined us in voting for the relevant Lords amendment last time. I thank them for that, and their constituents will do so as well, even if their Whips will not. As we were not successful, social landlords will have to take on extra staff to chase the resulting arrears that will start to accrue in every social landlord’s stock across the country. The current Lords amendments are much more modest than the previous ones, but they would at least protect those who stand to lose the most from what the Government want to do. I hope that hon. Members will support the Lords amendments and oppose the Minister’s motion.
Andrew Percy (Brigg and Goole) (Con)
When I spoke during our last consideration of the Lords amendments to the Bill, I expressed concerns about this policy, particularly about the changes to child maintenance payments. I am pleased that there has been some movement on that front, but I find myself once again in support of their lordships. I am sorry about that, because the ministerial team is one of my favourites. I will not tell you which is my least favourite, Mr Speaker, but people can guess.
Mr Tom Clarke
I find myself agreeing with almost everything that the hon. Gentleman has said, apart from his view of those on the Treasury Bench. In addition to his experience in his own constituency, is he influenced by the fact that disability organisations have told us about the example of a man with a learning disability who had to wait for 25 years for appropriate accommodation? It turned out to be a two-bedroom house, which has now become his home.
Andrew Percy
I do not know the circumstances of that case, but in my time as a councillor we had a number of properties that were very difficult to let because people did not want to live in them. That was particularly true of the maisonettes. In Old Goole in my constituency, a two-bedroom maisonette has recently been let to an individual after about 20 years. He will be under-occupying because of the spare bedroom, but we are grateful that he has taken the property off our hands.
Mr Kevan Jones (North Durham) (Lab)
Given my time in local government in my constituency, I totally agree with the hon. Gentleman on that. Does he recognise that for many years, the Housing Corporation, which funds a lot of social housing, has not given grant to the building of one-bedroom properties?
Andrew Percy
Indeed. The standard for many housing associations is to provide two bedrooms—there is a programme in my constituency to renew such properties at the moment. In a few years’ time, we could end up with a lot of people who, through no fault of their own, are under-occupying homes because the standard has changed.
Julian Sturdy (York Outer) (Con)
Is that not the argument? There is a lack of family accommodation and we need to house families who are in temporary accommodation, especially for the children.
Andrew Percy
We need to address the failure to provide adequate housing stock in this country. However, I say to my hon. Friend and near neighbour that the Government’s proposal is not a way to do so. It is not a simple problem to solve.
The crux of the amendment is that if there is suitable accommodation to go into, people should go into it, but just as there is an insufficient number of bigger homes for families, there is an insufficient number of smaller, one-bedroom properties for those groups of people to go into. If we apply the argument that there is no suitable housing for one group of people and we must therefore do something about them, we should also argue that we should not penalise people who are under-occupying if there is no suitable accommodation for them.
The sensible element of the Lords amendment is that the penalty kicks in only if people refuse a suitable property. That is eminently fair. Hon. Members must come to their own conclusions, but I will vote accordingly. I look forward to hearing other contributions to the debate.
Mr Frank Field (Birkenhead) (Lab)
As the House may know, I agree with the Government on many aspects of the Bill and I have not always shared the sentiments of Opposition Front Benchers. I regret that, but I have made my position clear. However, I today wish to speak against the Government on their stance and to support my right hon. Friend the Member for East Ham (Stephen Timms).
I do so because the change that the Government are making is shameful. Anyone who has sat through debates on the Bill will know that the Government’s body language is totally different to that in respect of other measures. They have been forced to take this measure by the Treasury. It goes against all that the Bill tries to achieve, which is to work with the grain of human nature. This proposal, which has been forced on the Department for Work and Pensions, works against that grain.
There are four reasons why Government Members should today save their favourite Front Benchers from the course that the Treasury is making them go down. First, let us imagine that places are available—that we could wave them into existence with a magic wand—and that all the people whom the Government condemn as under-occupying could move. That is the last thing the Government want, because to satisfy the Treasury requirements, the Department has had to enter into the accounts that it will make a substantial saving. If it were possible for people to move—all hon. Members know that it is not—the measure would fail, because it is being introduced not to even out housing, but to deliver a major saving in public expenditure to the Treasury by singling out the group who under-occupy. Therefore, the first reason why I hope Government supporters reject the measure is that it makes no sense.
Secondly, as we have heard, even if people move into the private sector, the total bill to taxpayers will be greater than if they stayed in social housing and were not penalised. The Government risk making the achieving of cuts in public expenditure that much more difficult than it is.
Thirdly, the Government’s proposal strikes against other major Government objectives with which I agree. The Government say that the reform is aimed at strengthening families and building stronger communities, but this move sticks a dagger into both those objectives. It will affect parents in families that have broken up and wish children to come and stay, and people who have carers rather than entering permanent care. Furthermore, as the hon. Member for Brigg and Goole (Andrew Percy) said in his fine speech, people might snore. How many marriages have been saved because one partner who snored could move into another bedroom? These details do not appear in public accounts details but they appear in real life. If this measure passes, far from strengthening families and enabling them to relate to and visit one another more easily, it will make it more difficult, and it might well drive out of the community upstanding citizens who play a much wider role, in the most difficult circumstances, in trying to beat the yob culture that engulfs them.
There is a fourth reason I speak and wish Members, particularly on the Government Benches, to vote against the Government and save their own Front Benchers. The Government know that I do not accept all their poverty data, but they do not have the courage to come out, as I want them to do, and declare on that—perhaps one day they will find that courage. I do not think that the poverty data properly measure whether people are benefiting from the general rise in living standards that has occurred for generation upon generation in this country. Harold Macmillan said that the poor should benefit from rising living standards. One way of ensuring that they do so is to give them the freedoms that I and other hon. Members have—those small differences in life that so improve its quality. Having a spare bedroom with which to offer hospitality to family and friends can make such a difference to the quality of one’s life.
The Government know that they are going against a valuable tradition dating back to the Macmillan era. This is not a welfare reform measure. It will be a recruiting sergeant for the money lenders and will be looked on as an eviction measure. Given that the DWP cannot save itself from this terrible measure, forced on it by the Treasury, I hope that Government Members will save the Department from pushing through this nasty, mean little measure. I hope that the House will send a clear message to the House of Lords that, even if we do not win tonight, they should keep up the fight and send it back until there are enough Government Back Benchers to save the Department from this shabby little folly.
Stephen Lloyd (Eastbourne) (LD)
It is a privilege to follow the right hon. Member for Birkenhead (Mr Field) on this issue and the issue of welfare reform generally. I have read what he has written for many years. I have some sympathy with what he and other colleagues have said, and with the amendment, and I have some specific concerns that I would like to put to the Government and on which I look forward to receiving clarification from the Minister.
First, however, I want to welcome the fact that the coalition Government have already put aside funds in the comprehensive spending review for severely disabled people who need carers either for 24 hours or overnight. I am glad of that. It was in the Lib Dem manifesto, and I am glad that it is being delivered by the coalition Government.
I have four concerns about the amendment, however, on which I seek reassurance from the Minister. The first is straightforward and concerns foster carers and social housing, about which one of my colleagues talked earlier. I would like the Minister to clarify exactly how the Government will manage the periods during which foster carers have one spare bedroom. Clearly the children of foster carers sometimes move on and there will be a gap before the next child arrives. I would therefore welcome some clarification from the Government of how that will be managed.
Secondly, a number of my disabled constituents, such as wheelchair users, have had extensive adaptations in their homes—I am thinking of one particular individual, in Langney—which have made a considerable difference to their lives. It took probably two or three years to get the work done in that case, and it would frankly be daft to move that individual out of her home because of the one-bedroom rule; the local authority has already spent £10,000 on those adaptations.
Stephen Timms
I agree with the points that the hon. Gentleman is making. Just to take him back to foster children for a moment, as I understand it, they do not count towards the housing benefit bedroom entitlement, whether they are there are not. Therefore, not only is there a problem when there are no children; there is a problem when there are children.
Stephen Lloyd
I would welcome a response from the Minister on that issue.
To go back to disabled people and adjustments to their homes, I would like some detail from the Government as to exactly how they will meet that challenge, because clearly it makes no sense to move someone out after their home has been adapted to the tune of thousands of pounds.
Thirdly, what steps are the Government taking to ensure that there is enough housing stock when 2013 comes around? We have a year before that happens, so I would be interested to hear the Government’s plan. Last but not least, what plans are the coalition Government making, prior to implementation, to work with local authorities and housing associations in advance of April 2013 to ensure that the changes are made in a sensible and productive manner? I look forward to hearing the Minister’s reassurances in response to those four important questions.
Mr Speaker
Before I call the next speaker, let me point out to the House that the Minister is being asked quite a lot of questions—which is absolutely fine—and if the House wants to hear the answers, I think he will need five minutes to provide them.
Mr Andy Slaughter (Hammersmith) (Lab)
I agree with all the right hon. and hon. Gentlemen who have spoken, with the exception of the Minister.
As I understand it, the Government’s justification for prosecuting the bedroom tax against even very vulnerable people is that it will free up social housing and relieve the shortage. If that is the case, someone in a constituency such as mine—where 8,000 people are on the waiting list with no possibility of being housed in the private sector because of costs—should welcome such provisions. However, we know, because no alternative properties are available, that this is in fact simply a cost-saving measure. As for the idea of a property being empty for 20 years, as the hon. Member for Brigg and Goole (Andrew Percy) described, properties are not empty for 20 minutes in Hammersmith before they are snapped up.
Everything that this Government are doing, whether it be the cuts to the social housing grant, the changes to affordable rents—I should say that the affordable rent at 80% of the open market value of a four-bedroom property in Hammersmith would require an income of £96,000 a year—the changes in homelessness legislation or the provisions of the Localism Act 2011, weakens the security and provision of social housing. What we are discussing is another measure to make social tenants second-class citizens and social tenants on benefit third-class citizens.
If I may do so in just one minute, I would like to give as an example my own local authority—a Conservative-controlled local authority and the favoured local authority of the Secretary of State for Communities and Local Government. In the last two weeks it has given approval for more than 3,000 new houses to be built. Not one of those 3,000 properties will be a new social home for rent; rather, they are replacing 750 good-quality homes, which are in the process of being demolished, so we are already seeing downsizing at work. The authority received £100 million for that demolition from the property developer and another £100 million was received for selling off 300 good-quality social homes on the open market by auction, and it is building 25 new council homes. However, even though those council homes are on estates and will be low-cost homes that therefore could be rented, they will all be for private sale.
Mr David Ward (Bradford East) (LD)
Does the hon. Gentleman agree that the Government are failing to understand the sheer scale of this matter? The largest social landlord in Bradford has 3,800 under-occupied households, and it would take three years with no re-lets or new lets to house people there under the proposals.
Mr Slaughter
As always, the hon. Gentleman is right on this issue.
The point has been made by those on my Front Bench many times that we are talking about people’s homes. This proposal is cynical not only because it runs completely in the face of Government policy in every other area, which is to reduce affordability and the quantum of available social housing, but because it is about persecuting people in social tenancies and making them feel that their home is no longer their own. For that reason above all, I urge the House to support the Labour Front Bench in supporting the Lords amendment.
Chris Grayling
I will probably not be able to cover all the questions that have been raised, but I shall pick out some of the key points.
The right hon. Member for Birkenhead (Mr Field) made a passionate defence of the spare room, referring back to the days of Macmillan and to the principles of the welfare state. I know that he is often a champion of welfare reform, and I listen carefully to what he says, but I find it difficult to justify maintaining 1 million spare rooms in the social rented sector when large numbers of families are living in temporary accommodation and in accommodation that is too small for them. I do not believe that the spare room is a luxury that the social rented sector can afford at the expense of children living in temporary rented accommodation. Fundamentally, that is what this change is about.
Chris Grayling
As I keep saying, that is not the case. At the moment, local authorities up and down the country are paying out large amounts of money; the right hon. Gentleman should talk to his own local authority about the challenges and costs of providing temporary accommodation. We depend so heavily on temporary accommodation partly because of the failings of the previous Government, going back 10 or 15 years, in the construction of social rented housing. I remember looking at the figures in the early part of the last decade. Had the Blair Government continued to build social housing at the same rate as the Major Government, we would have seen something like 300,000 more families in social rented accommodation. The fact is, however, that they did not. This was not a priority for them when they took office in 1997, and they cut back on construction. Today, we are living in extraordinarily difficult times, financially, and we are dealing with the consequences of the decisions that were made 15 years ago.
Mr Field
We are not interested in the Blair Government or the Brown Government; the electorate decided that they should come to an end. We are interested in what this Government are doing. Does the Minister not accept that if people followed his advice and moved into the private sector, far from saving the amount spent on housing benefit, such a move would actually increase it?
Chris Grayling
I simply do not accept that. The right hon. Gentleman is making assumptions about people’s behaviour and about the cost of temporary accommodation. We as a nation are housing in extremely expensive temporary accommodation large numbers of people who can and should be housed properly. At the same time, we are supporting 1 million empty bedrooms in the social rented sector. My colleagues and I believe that we simply cannot afford to do that at this moment in time. This is not the world of 15 years ago. We have come into government with empty coffers, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) always reminds us. We are having to take tough decisions, some of which we might wish that we did not have to take, and we are trying to take them in as fair a way as possible.
My hon. Friend the Member for Eastbourne (Stephen Lloyd) asked about foster carers. The foster carers of this nation are to be enormously admired for the work that they do, and I appreciate that this is a sensitive issue. In putting in place discretionary funding, we have focused specifically on those people. On the status of a foster child, the approach that we are taking is not to treat foster children as members of the foster carer’s household in the calculation of the appropriate amount of housing benefit. That is because we are treating them in a different way. It is consistent with the current treatment of foster children in housing benefit assessments for those living in the private rented sector, but we disregard the whole of the foster carer allowance that is given to the foster parents when assessing eligibility for all income-related benefits. That leaves the majority of households who foster substantially better off, so the payment is made through the foster care support system in order to ensure that the family has sufficient resource to make money available for support to cover the costs of those children.
The whole point of making discretionary money available is, as my hon. Friend the Member for Crewe and Nantwich (Mr Timpson) said, that there are of course situations where there is a gap in a foster child’s presence in a household. When the money is not coming in, we need to use discretionary funding to ensure that the family is appropriately and properly supported. We do not want to see foster carers forced out for the very good work they do; it is really important that we provide them with support.
In the last few seconds available to me, let me say again that a spare bedroom is a valuable asset. Taxpayers’ money is already being used to provide accommodation at social sector rents, averaging £79 a week in England compared with £160 in the private rented sector. Asking the taxpayer to find a further half a billion pounds to enable—
Remuneration of EU Staff
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Miss Chloe Smith)
I beg to move,
That this House takes note of European Union Documents No. 17625/11 and Addendum, relating to a draft Regulation adjusting, from 1 July 2011, the rate of contribution to the pension scheme of officials and other servants of the European Union and a Commission staff working paper: Eurostat report on the 2011 update of the 2010 actuarial assessment of the Pension Scheme for European Officials, and No. 17627/11, a Commission Communication to the Council providing supplementary information on the Commission report on the Exception Clause of 13 July 2011; questions the European Commission’s conclusion that recent and challenging economic conditions do not warrant application of the Exception Clause; regrets that the Commission has not modified the salary adjustment method this year; stresses that consequent increases in EU staff pay, proposed by the Commission, are completely unacceptable when as part of its fiscal consolidation plans the Government has imposed restraints on public sector pay; notes that the framework for setting EU remuneration requires reform to increase Member States’ oversight and control, which the ongoing review of the EU Staff Regulations may enable; and commits to achieve very significant reductions in EU administrative spending in the next Multiannual Financial Framework as part of the UK’s overarching goal to impose real budgetary restraint.
I welcome the opportunity to discuss the 2011 EU salary adjustment and the Government’s agenda to reform and reduce EU administrative spending. The House is familiar with the context for EU spending: while Europe’s economy remains very fragile, delivering and supporting plans to consolidate public finances remains crucial and, at the same time, we must also seek to promote growth using available resources.
There are two clear implications for the EU budget. First, the EU must live within its means; high spending is not the way to fix Europe’s problems. Secondly, all EU spending must deliver the highest added value. Strict and rigorous prioritisation is necessary to reduce waste and inefficiency.
Over the past few years, the Government have worked hard to establish a new framework for budget discipline at EU level. That is an important task because current EU spending targets, agreed by the previous Government, set a rising trajectory for EU spending to 2013 that is no longer realistic.
We have pursued our goal with considerable success. For 2011, growth in EU spending was limited to 2.91%, far below the unacceptable 6% increase demanded by the Commission and European Parliament, and last year, the 2012 EU budget was set at only 2.02% above the original 2011 budget, exactly as proposed by the European Council in July. That delivered on the Prime Minister’s determination to freeze the EU budget in real terms, and set spending €4 billion below the level advocated by the European Parliament.
A drive to limit EU administrative savings is a key plank of the Government’s approach to budgetary restraint at EU level. It reflects the tough domestic measures the Government are taking to find savings. As set out in the spending review, the administrative budgets of central Whitehall Departments will be reduced by 34%, saving £5.9 billion a year by 2014-15 so that resources can be focused on front-line services.
The EU should show a similar drive to find efficiency savings. Any suggestion of waste in the EU budget damages the standing of the EU institutions and of the EU as a whole. Its ambition, however, is evidently lacking. Strikingly, for 2012 the Commission proposed to save only €695, much less than one 1,000th of its €3.3 billion budget. We are clear, however, that the EU institutions must manage themselves and the programmes that they help to manage far better and on lower budgets. We have called for a cash freeze in EU administrative spending in recent annual budget negotiations and we want to see cash cuts in that area over the next multi-annual financial framework.
Today, I can inform the House that the Chancellor took the unprecedented step of voting against discharging the accounts for the 2010 EU budget. We have not seen enough progress in reducing the level of errors in EU transactions, which is unacceptable. We should remember that national taxpayers stand behind the EU budget and that is why we have clearly signalled the need for important and urgent improvements to the quality of EU financial management.
Mr William Cash (Stone) (Con)
I am sorry to intervene on the Minister because of the effects of her unfortunate accident, but is there a blocking minority against the proposals and has it been exercised? May I ask whether we are not only voting against it, but have voted against it, and what the outcome was?
Miss Smith
I think I will cover all those points in my speech, although I am grateful to my extremely well-informed hon. Friend for his prompt to do so.
Let me turn now to the 2011 EU salary adjustment. The Commission’s attitude towards EU staff pay adjustments is another clear indication of its estrangement from reality. In the UK, the public sector pay bill makes up more than half of departmental resource spending, so action on pay is inevitably part of the Government’s fiscal consolidation strategy. Accordingly, the Government have announced a two-year public sector pay freeze for those earning above £21,000, with pay awards following that averaging only 1%. Those measures are estimated to save around £3.3 billion a year by 2014-15.
At EU level, on the contrary, staff remunerations counted for 69% of the Commission’s budget in 2011, which means that EU annual salary adjustments have important implications for the size of EU administrative costs. However, rather than taking action to reduce its wage bill the Commission proposed to increase it by 1.7%, representing an extra €39 million, in the year from July 2011, despite the fact that the vast majority of EU officials earn significantly more than most public officials in the UK and many other member states.
I turn now to the position of the UK and the Council. Clearly, any pay increase for EU staff is unacceptable. In conjunction with other member states, the Government called on the Commission to lower its proposals, taking into account the economic situation and the policy measures in many member states to curb public wage bills. The request was made not once but twice, first in December 2010 and again in November 2011. The requests were made by invoking the so-called exception clause—article 10 of the 11th annex to the EU staff regulations—the only means for seeking to alter the mechanistic salary adjustment process under the current system.
Each time, the Commission has stubbornly refused to reduce growth in EU staff pay. Its defence for its inaction has been internally inconsistent, self-serving and, as the European Scrutiny Committee observed, one-sided. By claiming that there has been no
“sudden and serious deterioration in the economic and social situation”
in the EU, the Commission has undertaken faulty analysis. For example, it based its rosy evaluation on forecast indicators that did not pertain to the period defined for its assessment.
More seriously, the Commission ignored the huge number of important fiscal consolidation measures adopted and implemented by member states during the period under review. The Commission itself has strongly advocated such measures, yet incredibly it used stabilising debt and deficit levels to justify higher pay for its own staff.
Most seriously of all, the Commission has manipulated the current system to deprive member states of the opportunity to evaluate the situation independently and to adopt appropriate measures, at a time when it is evident to us all that taking immediate action to curb growth in EU staff pay is the right thing to do. That is why the UK and the wider Council rejected the 1.7% pay increase in December. It is also why we have blocked reductions in EU staff contribution rates to their pension scheme. In addition, the Council has lodged a court case against the Commission for mishandling the 2011 salary adjustment.
The Council’s decision to proceed with legal action against the Commission indicates the seriousness with which we treat the issue. Should the Council lose the case, it will simply add weight to our view that the current process is defunct and cannot adapt properly to difficult economic circumstances. In any event, reform of the salary adjustment system is urgent. The ongoing review of the EU staff regulations, which set out the rules in this area, provides an important opportunity to make that happen.
Delivering a subtler and more responsive way of setting EU staff pay, which empowers the Council to make suitable adjustments in times of economic distress and more generally, is an important objective. One part of the Government’s broader agenda to achieve efficiency gains and financial savings in the EU budget is via reform of the staff regulations that determine such a high level of the EU’s administrative budget.
Overall, the potential for savings is high. This dossier is subject to qualified majority voting and co-decision with the European Parliament. Our success will depend on building firm alliances, so the Government are already working closely with other member states to agree cost- saving ideas that can command broad support in Council.
Mr Christopher Chope (Christchurch) (Con)
Does my hon. Friend agree that the problem of co-decision with the European Parliament is that its Members already have their fingers in the till and are giving themselves a substantial pay increase for the coming year?
Miss Smith
I certainly agree that everybody associated with European institutions needs to show restraint at this time, as I think the debate will show in some detail, so I very much welcome my hon. Friend’s intervention. He will be reassured that alongside the measures I have already laid out, we intend to pursue the modernisation of EU institutions, in order to help them become more effective, and to encourage a better geographical spread of EU officials from across member states.
Jacob Rees-Mogg (North East Somerset) (Con)
Further to the point made by my hon. Friend the Member for Christchurch (Mr Chope), is the Minister aware that the European Court of Justice has ruled that sufficient circumstances did not exist for abandoning the pay rise proposed in 2009? It has therefore been judge in its own cause, abandoning one of the founding principles of natural justice.
Miss Smith
My hon. Friend makes a further fine point, as he frequently does. By failing to restrain the budget, the Commission is almost, metaphorically speaking, acting as judge and jury in its own case, deciding the matter in a way that could clearly be said to be self-serving. My hon. Friends will all be pleased to hear that reform of the staff regulations is extremely important in the next multi-annual financial framework, because it is there that we can control administrative expenditure year in, year out.
The House is aware that we need to promote budgetary restraint at every opportunity. That is the UK’s top priority. That means that we need to ensure that the EU budget contributes to domestic fiscal consolidation. The Prime Minister has stated, jointly with his EU counterparts, that the maximum acceptable expenditure increase through the next financial perspective is a real freeze in payments. To deliver this, we want very substantial reductions in many areas of EU spending, compared to the Commission’s proposals, including on salaries, pensions and benefits, as well as discretionary administrative spending, such as buildings policy and IT. The EU cannot continue to insulate itself from cuts at the expense of UK taxpayers.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister talks about ways of cutting back expenditure. What representations have the Government made recently on the terribly wasteful and inefficient practice by the European institutions, particularly the Parliament, of moving between Strasbourg and Brussels? Have the Government pressed that issue recently?
Miss Smith
As I hope my comments have made clear to all hon. Members in the Chamber, this Government take extremely seriously all aspects of budgetary restraint. I firmly expect us to review the situation with the same principles at hand. We are looking for the kind of restraint in the EU institutions that we can show proudly to UK taxpayers back at home. That is what I am laying out today across a number of areas. I mentioned buildings policy, for example, in my comments a moment ago.
I shall conclude in order to allow other hon. Members to have their say on this extremely important topic. The Commission must not be allowed to cosset its officials with pay packages that are grossly inflated. It has a clear responsibility to put forward an ambitious programme of reform to reduce its administrative budget. That is why this Government will continue to challenge the current system in order to contain the costs of Europe. I commend the motion to the House.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
It is a pleasure to face the Minister across the Dispatch Box this afternoon, after being side by side with her this morning at the Rehab Group’s parliamentary pancake breakfast. Neither of us was able to run in the race, so we did not have that kind of competition this morning.
Mr Speaker
With reference to the annual adjustment of the remuneration of EU staff, I feel certain.
Stephen Pound
On the subject of the annual adjustment of the remuneration of EU staff, my hon. Friend may be aware that when the MPs team won this morning, that was the sole topic of discussion.
Cathy Jamieson
I had better not incur the wrath of the Speaker by commenting, other than to congratulate those MPs who were able to take part. I note that, apart from my hon. Friend, none of them is here to participate in the debate. Perhaps they are recovering.
I begin by thanking the European Scrutiny Committee for recommending this for debate on the Floor of the House and for the work it has done in scrutinising these documents. European institutions can sometimes seem remote and impenetrable, but as we are aware, the workings of the EU in general, and of the Commission, have a significant impact on a range of issues that affect us all. We also know that the EU produces a huge volume of documents, and members of the European Scrutiny Committee do us a service by examining a number of those in detail, and recommending debate on the Floor of the House where there are further questions for the Government to consider.
The Committee’s reason for drawing attention to these documents relates to a number of specific concerns: first, the process that has led us to the position where once again we might see a legal battle between the Commission and the Council in the European Court of Justice; secondly, the Commission’s view that there was no justification for invoking the exception clause; and thirdly, questions about what action the Government have taken, and will take, regarding the negotiations on the amendment of Annex XI.
As the European Scrutiny Committee recognised, the documents are technical in content, but they nevertheless raise issues of far greater political importance. In properly scrutinising these documents, it is important to understand their background and history. The Minister has already covered some of that territory and I will not seek to repeat it. However, it is worth highlighting some of the context again, because it is entirely linked to the wider economic situation we face.
In less difficult financial times such documents, which essentially put in place the necessary paperwork for salary upgrading, might have passed, if not entirely unnoticed—the Scrutiny Committee would always have had an eye on them—at least without significant comment, except from Members who view anything to do with Europe as by its nature a bad thing. I do not take that view, but we are in a climate where there is justified anger at excessive pay, outrage at bankers’ bonuses and a general feeling that staff who are already highly paid should not get extra rewards simply for doing their job properly.
Mr Cash
Is there not a further point on economic performance arising from the hon. Lady’s comments? The calculations being made are based on the assumption that there is reasonable growth in the European Union, which simply is not the case. It falls on economic as well as legal grounds.
Cathy Jamieson
The hon. Gentleman makes a useful point that I will address in greater detail later.
Being somewhat older than the Minister, I can recall the days when the so-called Eurocrats were high on the hit list of public anger, as salaries and conditions in European institutions were perceived to be far more generous than those enjoyed at home. Some of the most highly paid officials might be relieved that they are no longer the focus of that anger as bankers and others have taken over. However, the subject of EU salaries and pensions remains important. As the European Scrutiny Committee has highlighted, it is clear that this subject needs greater clarity and resolution. As we have heard, the Commission took the Council to the Court over EU salaries and pensions in 2009, and only last month it announced its intention to do so again. In advance of today’s debate, I asked the House of Commons Library about the costs involved in the last case. I was told:
“There is no straightforward way of getting a figure for the costs borne by the Council in Case C-40/10.”
I was also told that the Library had attempted to obtain information, but the Court had said that
“replying would be a massive undertaking that will require all sorts of cost allocation analyses (within the Commission’s legal service and the European Court of Justice), at great expense to European taxpayers”.
The Court might be unable to tell us exactly how much that wrangling cost, but it is clear that any legal fight will have come at great expense to the taxpayer. The questions that taxpayers will no doubt ask is whether that ping-pong between the Commission and the Council is really the best way to resolve such matters, and I was pleased to hear the Minister refer to that. However, taxpayers will want to know exactly what the Government have done in the past year to push for reform so that we are not faced with this annual tit for tat and ongoing uncertainty.
The second area of major concern for the European Scrutiny Committee was the Commission’s decision not to provide for an alternative salary adjustment in its 2011 report and the basis on which that decision was taken. Members of the Scrutiny Committee amplified their concerns in the conclusions of their report of 2 November by describing the assessment required of the Commission in considering the exception clause as appearing to be a one-sided exercise.
There are different opinions on Europe across the political parties, and indeed within them, but there is one thing that I am sure we can agree on: times are now tough across Europe. GDP fell throughout Europe at the end of the previous quarter, unemployment in the eurozone is at a record high and we continue to face uncertainty surrounding the eurozone crisis. In reality, apart from those at the very top, people in work in both the public and private sectors are already experiencing those tough times, and families are bearing the brunt. Every day we hear that small business are struggling, and they consistently report that they cannot get the finance that they need or, indeed, previously had. It is becoming harder and harder for people to buy their first home, with the deposits required now out of reach for many young people starting out in family life.
Yet, despite that wider economic climate, the Commission did not deem the general economic outlook in Europe to be an “extraordinary situation” as defined by the European Court of Justice. Try to explain that to the low-paid couple who are set to lose about £4,000 in working tax credits when they hear that a highly paid official could gain an extra £4,000 under the proposals.
If we are not in an extraordinary economic situation, what would make for one? We have to question why it is deemed correct to ask hundreds of thousands of public sector workers in the UK and throughout Europe to take the hit and to face a cap in their pay and an uncertain future, while no similar restraint is shown by the EU institutions.
Another part of the problem is that, owing to the structure of the current arrangement, annual adjustments are implemented across the board irrespective of salary levels, meaning that a high earner who is already on £200,000 will receive thousands of pounds more under the proposals.
The Opposition have made it clear that financial discipline in the public and private sector must be accompanied by fairness, and in terms of salary scales, just as at home, we must be tougher on those at the top to help protect those at the bottom. Have the Government made representations on that point during any part of the negotiations?
I agree with the European Scrutiny Committee that the process smacks of being one-sided, and it could be argued that the Commission’s conclusion that we do not face extraordinary times has made a mockery of the exception clause, so urgent reform is clearly needed.
That brings me to my next point, and the Committee’s third area of concern: the Government’s action and representations on the issue. We hear a lot from the Government, as we have again today, about them taking a tough position on EU administrative expenditure and wanting to see real budgetary restraint in the EU over the coming years. They spell that out in their memorandum on the subject, and they go on to express dissatisfaction with the substance and procedure of the salary and pension adjustment proposals, making the point that the formal proposals were first circulated only on 24 November 2011 but required Council approval by the end of the year.
Again today, although we have heard a great deal about the facts of the situation, we have not heard in detail how the Government intend that tough position to manifest itself, or who exactly they are going to be tough on. The fear and worry for many will be that this is just another example of talk but not necessarily action on Europe by the Government, so I should like to hear from the Minister how the Government expect to take the lead in talks on reform at a time when the UK’s political capital in Europe is at its lowest in a generation.
In recent months we have seen how the Prime Minister’s actions have left Britain somewhat isolated in Europe, because leading up to last December’s summit he did not appear to put any real effort into alliance building.
Mr Stewart Jackson (Peterborough) (Con)
The hon. Lady’s argument would gain more conviction were it not for the record of the Government whom she supported, because those issues, particularly the structural issues in terms of the European Union institutions, did not begin in May 2010. Does she think that the process she supports was improved by a previous Prime Minister giving away a huge rebate?
Cathy Jamieson
I have listened closely to the hon. Gentleman, but his party is now in government and it has to take responsibility for what has happened in the past year. I absolutely understand that past decisions have implications for the issue before us, but I want to focus on where we go in the future and what this Government have done in the past year. My concern is that, apart from trips to Berlin and Paris, for example, neither the Prime Minister nor the Foreign Secretary travelled to the EU’s capitals before they went to Brussels. Britain was singled out for criticism by the Foreign Minister of Poland, a country that was one of our potential allies. If we want to change things in Europe, surely we must build alliances rather than destroy them.
The Minister for Europe (Mr David Lidington)
Just to correct the record, the Prime Minister did travel to see Chancellor Merkel and President Sarkozy in the run-up to the December Council and the Prime Minister, the Deputy Prime Minister, the Foreign Secretary and other Ministers had conversations with their counterparts in a number of other member states as the Council approached.
Cathy Jamieson
I am happy to accept that correction to the record. However, I want the House to be aware of our concern that what was presented by the UK was done very much at the last minute. I hope that in future we will spend time building alliances, rather than be sidelined.
I want to focus again on the issue of budgetary restraint. The Minister has indicated that there is an intention to be tough on Europe on budgetary restraint, but we have not seen or heard the detail today of how that will happen.
The Conservative party is riven with splits. The Deputy Prime Minister has said that the Prime Minister’s behaviour in Europe risks making the UK
“isolated and marginalised within the European Union”.
The Italian Prime Minister, Mario Monti, has said that Britain will no longer be
“in the heart of Europe”
following the veto and that our “capacity to influence” events will be greatly diminished. The concern of people in the wider world is that the Prime Minister has indicated that he is willing to put appeasing his own party first and the national interest second. Let us be clear about one thing: our place in Europe and our seat at the table are too important for that. To cut ourselves off from a market of 500 million customers would be devastating to British companies. In an era of billion-person countries and trillion-pound economies, we need to find ways to amplify our voice, not dampen it.
Henry Smith (Crawley) (Con)
Is the hon. Lady really arguing that we should go headlong into whatever political alliances the European Union wants us to enter, just for the sake of free trade? Is it not the case that we are able to have free trade without surrendering sovereignty?
Cathy Jamieson
If the hon. Gentleman had been listening carefully, he would have realised that I am saying nothing of the sort. I am saying that in an era when we have to compete in a global economy, we must ensure that our voice is heard. We therefore have to take our seat at whatever table there is to put the interests of the UK forward. Where we have shared goals, such as in climate change negotiations, tackling cross-border crime and dealing with human trafficking, working together surely makes global agreements more likely. We need a mature and positive approach to Europe from the Government.
Cathy Jamieson
I am almost finished, but I will take an intervention on that point.
Mr Jackson
The hon. Lady is being very generous. I am rather confused by her position. Can we infer from her comments that if the Leader of the Opposition had been Prime Minister on 9 December 2011 he would have signed the treaty, or would he have followed the lead of the Prime Minister and vetoed it?
Cathy Jamieson
The hon. Gentleman will have heard the Leader of the Labour party say on numerous occasions that he would not have walked out of the negotiations. There was no treaty on the table at that time.
I want to move on, because this point is important. As I have said, we need a mature and positive approach to Europe from the Government. When we get the opportunity to work on a cross-party basis, we should do so. We should engage in Europe and build alliances so that when important issues come up, such as those that we are debating, we have credibility and influence among our European neighbours.
Cathy Jamieson
No, I want to move on. We will no doubt continue to debate the other issues that I have raised on other occasions.
To return to the topic of this debate, it is clear that the view from all parts of the House is that the issue of EU salaries and the exception clause is important. It is also clear that the dispute between the Commission and the Council cannot continue as an annual tit-for-tat with serious financial consequences.
I once again thank the European Scrutiny Committee for recommending that such an important issue be debated on the Floor of the House. I look forward to hearing what members of the Scrutiny Committee and other Members have to say, and to hearing the Minister’s response to the questions that I have asked specifically about what action has been taken in the past year and how Ministers propose to ensure that we do not face a similar situation at any point in the future.
Mr William Cash (Stone) (Con)
I am in the unusual position of largely agreeing with not only my own party’s Front Benchers—that is always a great pleasure, if something of a rarity in European affairs—but, as it happens, the Opposition spokesman. This is a very important debate, because it indicates what is going on in the European Union. There is a complete cloud cuckoo land, which I observed when I went to the multi-annual surveillance framework meeting a few months ago.
Mr Cash
I am glad that my right hon. Friend is nodding vigorously, because it was simply staggering. There we were, faced with a huge European financial crisis, and all people were doing was getting up, one after another, and demanding more and more money.
There is so much common ground in the House that I am happy to be brief and allow my hon. Friends to explain their points of view and concerns. I am conscious of the fact that I have had quite a few opportunities to do so. However, I wish to point out that my right hon. Friend the Prime Minister recently signed a joint letter with Mr Rajoy, the Prime Minister of Spain, and other EU leaders. It is also signed by the Prime Ministers of a number of Nordic and Baltic countries, together with the Polish Prime Minister. It is about building up a sense of alliance, and it is reported in today’s Financial Times under the headline, “Cameron steps up moves to rebuild links with Europe”. I trust that that is being done on an entirely realistic basis.
For example, to return to the point that I made to the Economic Secretary, I hope that the group getting a blocking minority and voting consistently against the measures in question will include a sufficient number of member states to ensure that the Commission cannot get away with what is no more or less than the manipulation of the rather arcane formulae contained in the regulations. The European Scrutiny Committee is deeply concerned about the situation, as other Members will be.
I entirely agree that the European Commission’s analysis is faulty, and it is also completely out of date, to say the very least. I am being rather generous in saying that, because it has fitted the facts to what it wants to hear. That is why the Committee describes what it has done as “self-serving”. As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, there is also the problem that the Commission is the judge and jury in its own case.
We must also consider what we might expect to get from the European Court of Justice. Serious questions often arise about whether many of its decisions are taken on too much of a political basis rather than a strictly juridical one.
Mark Reckless
On a recent visit to Brussels, I had the pleasure of meeting the civil servant who negotiated the package in question. He was absolutely up front in saying to me that his role was to do the best for his colleagues. Having done that so successfully, he was promoted. What more do we need to know to see that the EU is run for the benefit not of its members but of its staff?
Mr Cash
Indeed, and that is far too much of an endemic problem throughout the EU. We know about the case of Marta Andreasen, who was one of the chief accounting officers in the EU some time ago and had the temerity to challenge the basis on which its administration in the Court of Auditors was being run. She was sacked. Before that, there was Bernard Connolly. I am given to understand today that in Greece the chief representative for EUROSTAT, who has to operate within its regulations, is under siege and under incredible personal pressure, and may even be taken to court because he has taken unpopular decisions.
The problem lies in the idea of acting as judge and jury and being self-serving when the whole of Europe is in a state of complete crisis. People are, frankly, lining their own pockets at public expense at a time when we know, because we have just had our letters from the Independent Parliamentary Standards Authority, that we are not going to be given an increase, any more than are the civil servants and so forth. The disparity between what is going on in the European Union and what is going on in the domestic administration of this country is so glaringly obvious that we have every reason as a Parliament not only to debate the issue but really to put our foot down.
How are the Government approaching the negotiations on annex 11 of the staff regulations, which deals with annual salary adjustments? It strikes our Committee that the procedure by which the exception clause is invoked is tantamount to a breach of natural justice, as the Commission, in effect, decides whether it should freeze the salaries of its own staff. I would be grateful if the Minister explained how she would like this procedure to be amended.
Bob Stewart (Beckenham) (Con)
Would it not be natural justice for European bureaucrats to have exactly the same conditions as our own civil service, with no additional money being paid by this country for them to get an add-on to their salaries?
Mr Cash
I certainly agree with that, and I would say the same about the European Parliament and the analogy with this House. The reality is that there is an air of unreality. In the words of T. S. Eliot,
“Humankind cannot bear very much reality.”
It is time that we sorted this out.
Kelvin Hopkins (Luton North) (Lab)
I stand together with the Chair of the European Scrutiny Committee, of which I am delighted to be a member, on this issue. When we have these debates, I worry about the constant references to Europe. Europe is a wonderful place; I go there for my vacations and I love everything about it. The European Union is not Europe; it is a political construct invented by someone or other and imposed on the peoples of Europe. We should always refer to the European Union, because that is what we are discussing; it does not even cover all the countries of Europe.
My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) talked about making alliances. Some alliances are little short of conspiracies against countries’ peoples. The Greek Government are made up of PASOK, an allegedly socialist party, and New Democracy, an allegedly conservative party, standing together against their own people. In the elections, at least 43% of the population will vote for the left and probably an equal number will vote for right-wing parties that are not even represented in their Parliament. When Front Benchers start to agree with each other against their own peoples, democracy is in danger. We should sometimes take different views, and when we form alliances, we should do so on the basis of what we believe in, and not for political convenience in order to conspire.
On salaries at the European Union, I believe that senior officials there have been bought for generations. When I worked as a scribe at the TUC some 35 years ago, one of our colleagues, who was left of centre, was suddenly jetted off to Brussels to become a European Union, or Common Market, official. His salary was astronomical, and he had to pay no national taxes. It was obvious that he was plucked out so that he could be bought. The people in Brussels wanted to pick out some key people of the left from the trade union movement, which was sceptical about the Common Market, and get them over there literally to buy their loyalty.
Bob Stewart
It is not just about salaries but benefits in kind and allowances—duty-free cars and things like that. These are incredible perks that no one else in Europe gets.
Kelvin Hopkins
This may be a light-hearted comment, but it always strikes me that people I have known who have gone to work in the European Union come back with a rather fuller figure than when they went. I may be wrong, but that is the impression I get. They are certainly loyal to their new organisation.
Mr Stewart Jackson
I pay tribute to the hon. Gentleman for consistently being right on this subject. Does he think it is rather perverse and insidious that one of the caveats attached to someone being awarded a pension by these European institutions is that they are specifically proscribed from criticising those organisations? Perhaps that is something that the Deputy Prime Minister takes on board on a regular basis.
Kelvin Hopkins
It is a feature of all authoritarian regimes that they cannot bear criticism, particularly from the inside. In a healthy democracy, we should accept challenges from time to time. If we are governing, it is very useful to have people telling us that perhaps we have not got it right. Even at my modest level as a Member of Parliament, I like my staff to tell me when I have got something wrong. I do not sack them; I say “I thank you for your comments, and I’ve got to think about this.” Occasionally they put me right, and sometimes I am right, but debate of that kind is always healthy in a democracy. It is anti-democratic to sack somebody simply for disagreeing or criticising. In the end, we always do things by debating and voting, one hopes, with openness and transparency.
I have a story from a few years ago. Someone I knew who was involved in Brussels arrangements drifted into a meeting unexpectedly and found senior officials discussing among themselves whom they wanted to get into the post of Social Affairs Commissioner. They openly said, “We don’t want Social Affairs to be effective because it is only there as a decoration to get trade unionists and socialists on side, so we want somebody weak and ineffectual. Who shall we have?” Eventually they found an innocuous, sufficiently weak commissioner from one of the minor eastern European countries—I will not mention the name—to make sure that the post was not effective. The person sat in the room astonished at what was going on. The officials were deciding who the commissioner was going to be, and of course it transpired that that is who it was.
That is how the European Union operates. It is very anti-democratic, secretive and closed. We cannot get a verbatim report, or any kind of report, of what goes on in the Council of Ministers. When the European Council meets, a decision is made by officials before it meets. People talk for a couple of hours in the meeting, and they come out and the decision is adopted. It has been drafted beforehand and is invariably accepted, because that is the way things work. Let us not pretend that we are involved in some thrusting, democratic organisation—it is a bureaucratic structure where people are expected to fall into line.
I would enter a caveat for low-paid staff in any organisation—cleaners, security officers, people who work in the restaurants, and so on, who should have trade unions representing them to make sure that they have reasonable pay. We are talking about the highly paid officials who are part of the slush fund of the European Union and are clearly looking after themselves, with those who believe in this organisation being prepared to turn a blind eye to their vast salaries because they want to secure their loyalty for the foreseeable future. The whole structure needs to be opened up so that we have proper democratic controls at every level.
If the European Union is serious about reducing administrative costs, the way to achieve that is to cut out some of the things that it does. For example, there would be a substantial reduction in administrative costs if we got rid of the common fisheries policy and abandoned the common agricultural policy, as we should. We have talked about the repatriation of regional policy. If Governments decided what was appropriate for their regions, moneys would not be sent directly to our regions by Brussels, but would come through our Governments. If those unnecessary activities were repatriated, the administrative costs of the EU would be dramatically reduced and it would be a much more acceptable organisation.
I support the motion and commend the hon. Member for Stone (Mr Cash), the Chair of the Committee, for bringing it to the House.
Jacob Rees-Mogg (North East Somerset) (Con)
The exemption clause states:
“If there is a serious and sudden deterioration in the economic and social situation within the Community, assessed in the light of objective data supplied for this purpose by the Commission, the latter shall submit appropriate proposals on which the Council shall act in accordance with the procedure laid down in Article 283 of the EC Treaty”,
which has subsequently changed. The EU has decided that there has never been such an exception, even though we have been through the most extraordinary economic crisis in the past few years.
Yesterday, European Committee B discussed a Commission document that states:
“EU economic growth is faltering. In the euro area, this is exacerbated by the sovereign debt crisis and fragilities in the banking sector. These have created a dangerous feedback loop.”
The Commission says that the economy faces a crisis and that it is in a “dangerous feedback loop” but that there is no reason on earth why it should consider the salaries that it and others who work within EU institutions are paid.
The Minister has said that the economic situation in this country is serious enough for a freeze in public pay, and we know that the EU prescription for Greece and other countries that face economic crisis is austerity and pay cuts, but when it comes to the EU institutions, the situation is different—they say there is no real crisis or problem, and no exceptional circumstances, and that they must therefore carry on regardless. Can that possibly be a proper, moral or respectable way for an international body to proceed?
What can the Government do about it? So far, they have rightly pointed out to the Commission that they think the circumstances are exceptional and have tried to persuade it to change the basis for raising salaries, but the Commission has refused, with the backing of the European Court of Justice, which I shall come to in a moment.
The Government could, however, take another action. Under article 336 of the treaty on the functioning of the European Union, Governments are entitled to change the employment terms of people employed by EU institutions. If those terms are changed, the exceptional circumstances clause could be removed or changed—the whole basis for pay increases could be changed. That is where the Government ought to start. They should say to other member states that the employment terms and conditions no longer apply and are no longer relevant for the circumstances that we face. They can do so even if the Commission objects—that is in the treaty.
On the Court, in 2009 the Council instructed the Commission to use the exceptional circumstances clause. The Commission took the council to court and won the judgment of the EU in case C-40/10. The Court held that exceptional circumstances did not exist, and therefore overrode what the Council had done and reinstated the Commission’s proposals, which was interesting. When I raised the point with a lawyer, and said, “Well, what about the judges themselves? How are they paid?” the lawyer said, “It is inconceivable—inconceivable!—that the judges themselves could be beneficiaries of the scheme on which they had ruled.” I said, “It may be inconceivable, but is it possible to find out?”
A parliamentary answer from Lord Malloch-Brown, the then Foreign Office Minister, to a question from Lord Lester of Herne Hill, was helpful in that regard. Lord Malloch-Brown states:
“The terms and conditions for judges and advocates-general of the European Court of Justice…are set out in European Communities staff regulations.”—[Official Report, House of Lords, 18 June 2008; Vol. 702, c. WA166.]
The staff regulations are subject to the system whereby the terms and conditions may be changed in exceptional circumstances. I therefore looked at the regulations, thinking once again that it surely cannot be true that the EU—an institution that might not be liked and loved by many, but that is thought to understand basic principles of justice—has a situation in which judges decide on their own pay rise.
I therefore looked through “Title 1: General provisions”, article 1(21)(73)(96), which sounds very scientific. The provision states:
“These Staff Regulations shall apply to officials of the Communities.”
The document goes on to state:
“For the purposes of these Staff Regulations, ‘official of the Communities’ means any person who has been appointed, as provided for in these Staff Regulations, to an established post on the staff of one of the institutions of the Communities”.
The next step was to check what exactly are the institutions of the EU, because I still could not believe that there was such an affront to justice within the EU. I would have been very surprised had the European Court of Justice turned out to be such an institution, but when I looked at article 13 of the treaty on the functioning of the European Union, I found that the Court of Justice of the European Union, as it is properly called, is indeed one of the institutions of the EU. And yet according to the Commission, the Court’s judges had ruled so clearly that exceptional circumstances did not exist.
Stephen Phillips
I may or may not be the lawyer who described the idea that judges could be beneficiaries of a scheme on which they had ruled idea as “inconceivable”, but does my hon. Friend agree that if true, far from being inconceivable, it is utterly disgraceful?
Jacob Rees-Mogg
I am grateful to my hon. and learned Friend, because he gave me time to find the right quotation in my papers, which shows that he is even wiser and more helpful than I had thought. The Commission says that the Court found, in paragraph 74 of its judgment, that an extraordinary situation did not exist, and that it must enable
“account to be taken of the consequences of a deterioration in the economic and social situation which is both serious and sudden…under the normal method”.
The decision was that the economic and social situation was not serious and sudden enough.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Gentleman agree that the situation he has so clearly described is just one example of how incestuous the EU system has become? One layer perpetuates and supports the other. If we are to get to grips with such arrangements, the only thing the Government can do is make it clear that we will not continue to finance them?
Jacob Rees-Mogg
I have great sympathy with what the hon. Gentleman says. We ought to start thinking about withholding money. I have long had doubts about how the EU works and the ratchet, but I had the idea that the judges—though they may have a political objective, though they may be in favour of a federal Europe, and though they may push the law to the most extreme point to make the case for a federal European state—would not break basic principles of natural justice. The principle is “nemo iudex in causa sua”—a famous principle judged on and upheld in this country for centuries, and not just in this country—but abrogated in the EU.
I am glad to say, Mr Deputy Speaker, that the requirement not to be rude about judges applies only to judges in this country. It does not apply to judges in the EU, so let me be rude about them. Let me indulge in the floccinaucinihilipilification of EU judges and quote from the book of Amos about them:
“For I know your manifold transgressions and your mighty sins: they afflict the just, they take a bribe, and they turn aside the poor in the gate from their right.”
Those are the judges of the EU. Her Majesty’s Government are right to stand up to them. They do not deserve their money and it is iniquitous that they have allowed themselves to be judges in their own cause. It is a breach of justice; it ought to be criminal.
Sammy Wilson (East Antrim) (DUP)
It is a great joy to follow the hon. Member for North East Somerset (Jacob Rees-Mogg)—although, I must say, I do not think that I can follow his eloquence, knowledge and so on.
I want to put on the record where the Democratic Unionist party stands on this issue. Members on both sides of the House have expressed their opinion on the decision to increase salaries and remuneration for those who work in the European Union. That will be financed by taxpayers from the United Kingdom at a time when we are imposing austerity measures on our own population, when our own public servants are being asked to accept pay freezes and when many people in the private sector are taking pay cuts. At the same time, the countries of the EU are telling the people of Greece, Italy and the Irish Republic that their Governments must cut back to the point that jobs are lost and salaries are cut. So for those who make and impose these decisions to then say, “By the way, we’re exempt,” will strike many people as grossly unfair and grotesque.
Bob Stewart
There must be huge anger in all EU states, which are all going through exactly the same problems as we are. I just do not understand why other countries in Europe are not as angry as we are in the Chamber about the suggested increase in salaries.
Sammy Wilson
That is quite right. Any objective observer is bound to be angry about the fact that there seems to be one set of rules for those cosseted within the structures of the EU, and another for the millions ruled by them and on whom it imposes its wishes. Social disorder is now appearing on the streets of Greece, Italy and other European countries. One can understand why people are angry at the imposition of rules by people who seem totally out of touch and by institutions that, as the hon. Member for North East Somerset clearly explained, are so incestuous in their decision making—they collaborate with each other, supporting one layer of the institution with another layer—so we are bound to get the kind of reaction we have seen.
Stephen Phillips
The hon. Gentleman says that the institutions of the EU are out of touch, but of course, in the case of judges, they are also unelected and, it would seem, unanswerable to anybody. Does he agree?
Sammy Wilson
That is one reason why we get the kind of decisions we get from EU judges—whether they are about whom we can deport from the UK or about pay structures for EU civil servants.
Some will say that those who take my stance simply want to have a go at Europe. I have absolutely no hesitation in saying that I am a member of the Better Off Out group. I believe that we ought to loosen our ties with the EU so that it is what was originally intended—a free trade area, not a political entity. But I want to leave my political views aside for a moment. I am pleased that the Prime Minister has taken the stance that he has in recent days on Europe, and I hope that he does not weaken it. I hope that he keeps the strong backbone that he has shown. However, one way of hurting the EU is for us to say, “We’re not prepared to finance this grotesque behaviour in the face of the austerity affecting all the EU nations.”
Kate Hoey (Vauxhall) (Lab)
The hon. Gentleman need not feel alone. Does he not realise that 50%, if not more—a majority—of the public want a referendum on the EU, precisely because they want to return to the relationship that they thought they were voting for when they voted to join the original Common Market?
Sammy Wilson
I thank the hon. Lady for her intervention. If the Prime Minister wants his hand strengthened in his arguments with Europe on budgetary issues, and Europe’s interference with our courts and the rules affecting this country, one way of doing so is to have the backing of the people, in a referendum, for a different relationship with Europe. When one sees this kind of insular attitude being adopted, one understands why there will be increasing support for a referendum allowing for a change in the relationship.
Stephen Pound
As one who voted enthusiastically yes in the early ’70s, swept away, intoxicated by Margaret Thatcher’s endorsement of it, I can tell the hon. Gentleman that many people seeking a referendum simply wish to underline once and for all that this is no longer a question that we should return to every year, and that many of those seeking a referendum are pro-Europeans—a group among whom I proudly number myself.
Sammy Wilson
Ironically, the pro-Europeans are the people who have most vigorously opposed such a referendum. If the hon. Gentleman believed what he was saying, he would join me in saying, “Let’s have a referendum. Let’s hear what the people say,” although I suspect that he and many like him are afraid of what the people’s verdict might be. The one thing that I can be sure of is that this issue will reinforce the case that many of us in the House are making—that we ought to consider how our relationship with Europe can be altered so that we do not end up financing this kind of nonsense.
Mr David Ruffley (Bury St Edmunds) (Con)
We should be grateful to the European Scrutiny Committee for throwing a spotlight on yet another example of an unconscionable lack of accountability on the part of Eurocrats at the expense of democratically elected Governments. Ostensibly, the determination of pay and pension contributions for EU civil servants is the preserve of the Council, in co-decision with the European Parliament and on the basis of qualified majority voting. That is what it says, but of course, as we have heard today in eloquent speeches from those on the Government Front Bench and, in particular, my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), the Commission has frustrated the will of the democratically elected and accountable politicians.
As my hon. Friend said very eloquently, at the beginning of 2011 the Council decided to invoke the exemption clause allowing for a departure from the automatic uprating of remuneration in the event of a serious or sudden deterioration in the economic or social conditions in the EU. It is fairly clear that the Commission ignored that decision but was required to publish a review after being asked to reconsider. The Commission came to the conclusion, however, that there should still be a 1.7% increase in remuneration and a cut—I repeat, a cut—in the contributions of civil servants to their pension pot. This is at a time, I hasten to add, when, in this country, owing to longevity and the rising cost of pensions, we are asking for higher contributions from public servants.
Bob Stewart
To my hon. Friend’s knowledge, has the European Union ever been asked to cut its own civil service—or has it done so itself—by such-and-such a percent, as we have had to do in this country?
Mr Ruffley
I am terribly pleased that my hon. Friend asks that question. The House of Commons Library told me, about two hours ago, that spending on remuneration and pension contributions for EU civil servants from 2005 to last year went up by a staggering 63% in cash terms. So “No cuts” is the answer to his pertinent question.
When the Commission argued in the summer of 2011 that there were no triggers under the exemption clause—it argues that there was no serious or sudden deterioration in the economic or social conditions in Europe—it came up with a couple of what I can only call classics. They are comedy gold, and with your permission, Mr Deputy Speaker, I would like to quote from the Commission’s report. It says:
“The forecasts released by DG ECFIN on 10 November 2011 show worsening trends for 2011 as compared to the Forecast released in spring both as regards economic and social indicators and that the European economy is currently experiencing a turmoil. However”—
wait for this one—
“despite short-term indicators pointing to an ongoing slowing of economic activity in the EU, the overall growth performance for this year is still relatively strong.”
You couldn’t make this nonsense up. They are meant to be economic experts in the Commission, but they can still print, publish and stand by judgments such as that, when all the evidence to any sentient human being is to the effect that the downside risks to the EU economy are very considerable indeed.
The second comedy classic in that document is where the Commission is rebutting the call from the Council to trigger the exception clause:
“General government deficit within the EU is projected to decrease further from close to 7% in both 2009 and 2010 to 4.7% in 2011 according to the Autumn and Spring Forecasts. Fiscal consolidation is forecasted to progress with public deficits set to decline”—
the Commission was talking about the annual deficit, by the way—and, wait for this:
“even though EU public debt remains a constant concern for the EU economy at least since 2007.”
Well, you can say that again. We have seen colossal debt-to-GDP ratios right across the continent, including in this country. Added to that heady brew of incompetent economic forecasting and putting a rosy glow on a fairly dangerous economic position, the Commission prayed in aid the precedent set by the European Court of Justice, as we heard earlier, referring to the fact that the Court had ruled that the EU was not facing an extraordinary situation. So our old friend the European Court of Justice intervened, in support of the Commission.
We have already heard that the circumstances in this country and other mature industrialised economies in the EU are dire, so we should congratulate ourselves on the noticeable public constraint that this Government have imposed, introducing a two-year pay freeze, followed by two years of average rises of 1%. However, we in this country are paying very large amounts of money, as part of the net EU contribution; and as we know, that figure will go up from this year to the last year of this Parliament. This will outrage members of the British public—hard-working taxpayers who are seeing their private pensions hit, perhaps with the final salary schemes or corporate plans that they are part of closing down, as they face redundancy or lose their jobs.
It is worth reminding ourselves what contribution the British taxpayer is making to the pensions that are the subject of this evening’s motion. The cost to the British taxpayer of gold-plated pensions for retired European bureaucrats is expected to double in the next 30 years unless action is taken—by the way, those are the European Commission’s own projections. If we go further out—say, 50 years—the total contribution from Britain to EU civil servants’ pensions will be a staggering £8.5 billion, which is again a EUROSTAT figure. Many EU civil servants qualify for pensions worth up to three quarters of their final pay packet on retirement. The average annual pension for a retired EU civil servant is just under £60,000 a year. The number of retired civil servants entitled to EU-sponsored pensions is expected to increase from 17,500 this year to 37,500 in 2040. These are large amounts of money which, unless we act, will go towards financing a large pension burden.
I would like to close by reminding the House of what exactly we are getting for our money. Let us remember how utterly useless those civil servants are who do work in the new EU global diplomatic corps, the European External Action Service, and how nugatory their beneficial impact on the lives of British people is. The service will have an annual budget of £5.8 billion and an army of ambassadors across 137 embassies, with up to 7,000 European civil servants who will benefit from the arrangements that we are debating this evening. The EU will have a surprising 46 full-time diplomats in the Caribbean holiday destination of Barbados. The diplomatic corps, which was set up recently, will have 29 diplomats in Tajikistan, 53 in Madagascar, no fewer than 59 in Burkina Faso, 21 in Costa Rica, 46 in Mauritania, 39 in the Indian ocean holiday destination of Mauritius, 26 in Namibia and 27 in Papua New Guinea.
Mr Ruffley
It gets even better: the tiny Pacific island nation of Vanuatu, which has a population of around 200,000, will have six European civil servants to look after British interests, and there will be thousands more at EEAS headquarters in Brussels, and in Paris, Vienna, Rome and—let us not forget our old friend—Strasbourg.
Mr Ruffley
I am coming to the end of my remarks.
We have had an interesting debate today, and I am delighted to hear from the Economic Secretary about the hard line that the Government are taking. However, I shall close my remarks by asking her to explain precisely what the next step in this story will be. We know that there is a court case. We await the details from her of when it will take place and what the likely options are if for some reason the European Court of Justice does not find in favour of the Council, which, with all its faults, is—I repeat—composed of democratically elected politicians.
Miss Chloe Smith
I thank colleagues on both sides of the House for an interesting and consensual exchange of views. The British Parliament has clearly said today that it believes that the Commission’s proposals to increase EU staff pay are unacceptable, and that they serve only to demonstrate how out of touch the institution is with the domestic challenges that we face. This shows how important it is to act in our national interest, financially and politically.
I shall do my best to respond to the questions that have been raised in the debate. If I leave out any details, I shall attempt to furnish colleagues with that information in other ways if they so wish. I shall respond first to some of the political points that have been made. It was suggested that the Prime Minister’s actions in looking after our national financial interests could have left the UK isolated in Europe, but it is clear to most Members that he has stood up for the UK’s national interests. Indeed, even President Sarkozy said last week at the Anglo-French summit that he might have acted in the same way. In contrast, the former Prime Minister gave up a large slice of our rebate, leaving us £2 billion a year worse off, as has been ably pointed out.
Several hon. Members have asked what action the Government will take to deliver on our tough stance. In the ongoing review of the staff regulations, we are seeking to deliver savings in a number of ways: first, by cutting the package of allowances for EU staff, especially the 16% expatriation allowance; secondly, by improving the affordability of EU pensions, which I know my hon. Friend the Member for Bury St Edmunds (Mr Ruffley) will be pleased to hear; and thirdly, by adjusting the system for EU staff pay so that we can avoid higher pay in future. That adjustment involves a complicated method with which some colleagues will be familiar.
Chris Bryant (Rhondda) (Lab)
The Minister has just nodded towards the hon. Member with the wonderful tie, the hon. Member for Bury St Edmunds (Mr Ruffley)—
Chris Bryant
I think that his tie and mine are from the same shop. In fact, I know they are. The hon. Gentleman read out a long list of places where he thought there should be either no representation or minimal representation, including Papua New Guinea. Papua New Guinea has a high level of representation because it has the second largest rain forest in the world, and it is essential to climate change work. If the EU is to perform its work effectively, it needs representation there, and I hope that the Minister will not succumb to easy attacks.
Miss Smith
Nor will I succumb to interventions that could take us far beyond the scope of today’s debate. I know, however, that the hon. Gentleman will be particularly pleased to hear that the lobby that we have put in place to give effect to our tough stance has already had an effect. For example, the Commission, having been put under pressure, is preparing to reduce European Union staff levels by 5% between 2014 and 2020.
Returning to the actions taken in the past year to deliver the agenda for EU administrative spending, and to what we are doing on staff regulations reform, I can tell the House that the UK has been a signatory to two joint letters calling on the Commission to deliver “significant” savings in EU administrative spending over the next multi-annual financial framework. One was signed by 17 member states, and it represents a strong blocking minority, which I know my hon. Friend the Member for Stone (Mr Cash)—who has moved from his place—will be happy to note. He will be pleased to know that we intend to hold that strong blocking minority together as we press for more specific changes to the way in which the EU institutions work.
I refer hon. Members to two more letters, one of which is dated 20 February 2012 and deals with a plan for growth in Europe. It has been signed by 12 European Union leaders, and it talks about the effort that we must all make to put our national and international finances on a sustainable footing. In the second, dated 18 December 2010, our Prime Minister and those of four other countries state that the challenge to the European Union is not to spend more but to spend better.
A number of questions were asked about the cost of court cases. The costs of the 2009 court case were met from existing Council budgets, as per normal standards. However, it is clearly not ideal to deal with these matters through court cases. Clearly we need to seek deeper reform, and that is what we are endeavouring to do. I was asked whether we should distinguish between high and low-earning EU staff. Other hon. Members have spoken eloquently about this today, notably in respect of the judiciary. EU officials fall into the category of highly paid officials, and we therefore think that they are a legitimate target for key financial savings.
My hon. Friend the Member for Stone asked whether the Government were taking a blocking minority on the 2010 EU budget discharge. I am afraid he is still not in his place to hear my answer, but I shall be happy to discuss it with him later. At ECOFIN today, the UK voted against that; it was not, in technical terms, a blocking minority.
My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) asked how the Commission could possibly not invoke this course of action, and said that the economic situation was patently a crisis. I know that he will welcome my agreeing with him on that. There is patently an economic crisis, and highly paid officials cannot be immune from that. I know that he will appreciate being reminded that the Delphic oracle talked about “nothing in excess”. I believe that that applies to EU salaries, and the House has eloquently agreed with me today.
Our debate today sends a clear signal that the Commission must take the challenge of modernising its institutions far more seriously and, most important, it must work harder to deliver efficiency savings in administration. Stopping an unjustified hike in EU staff pay is an obvious and good place to start, and our debate today sends a clear signal that we stand behind the principle outlined in the court case brought against the Commission for refusing to take action on the 2011 salary adjustment. Disputing higher staff pay in 2011 was not only the right thing to do; it also highlighted the fact that the current process is defunct and cannot adapt properly to difficult economic circumstances.
Kate Hoey
If the court rules in the wrong way, if there is no change, and if all our protests here come to nothing, does the Minister agree that no one in the European Union will listen unless the Government take back some of the money from the amount that we were going to pay? When are we going to do something practical to show that we mean what we say, rather than simply repeating all these warm words that never change anything?
Miss Smith
The hon. Lady makes a fine point. I want to reassure her that the Prime Minister has worked hard during the past year to take serious action, and the Chancellor has taken serious action at ECOFIN today to demonstrate how seriously we take the improvement of the way in which the EU budget is managed and spent. The action that she suggests might be at the far end of the spectrum, but we take the full agenda very seriously none the less. We are resolved to lobby hard for cuts to EU administrative spending in future years, as part of the real freeze in the overall EU budget over the next framework. I commend the motion to the House.
Question put and agreed to.
Financial Services bill (programme) (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the Order of 6 February (Financial Services Bill (Programme)) be varied, in paragraph 2, by the substitution for Tuesday 20 March of Thursday 22 March.—(Mr Dunne.)
Question agreed to.
Business without Debate
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
18:39 - The House divided: - Ayes: 291 / Noes: 200 - Question accordingly agreed to.
18:55 - The House divided: - Ayes: 292 / Noes: 197 - Question accordingly agreed to.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We now come to motion 8, on the Adjournment of the House.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Deputy Speaker. As you will know, and as is stated in Standing Order No. 21, oral questions may be taken on a Monday, a Tuesday, a Wednesday or a Thursday. However, the Standing Order makes no reference to a Friday. Can you confirm that Standing Order No. 11(4) nevertheless allows the Speaker, on a Friday at 11 am, to make provision for questions of an urgent nature to be answered, or, for that matter, for Ministers to make a statement? I ask because the motion that we are about to consider does not allow us to sit on Wednesday 28 March, and some of us fear that that might be because the Prime Minister is frightened of answering questions in the House—[Interruption.]
Mr Deputy Speaker
Order. If I am to give a ruling one way or the other, I must be able to hear the question that I am being asked.
Mr Deputy Speaker
Order. I must say to Sir Peter Bottomley that I will not know the answer to the hon. Gentleman’s question until he has completed it.
Chris Bryant
In particular, we note that 28 March is the anniversary of the last occasion on which a Prime Minister was ousted by virtue of a vote of confidence. Can you confirm, Mr Deputy Speaker, that if we were to sit on 23 March, which is a Friday, it would be perfectly possible for there to be questions to the Prime Minister, and indeed a statement from the Prime Minister, if the Government tabled a motion to that effect?
Sir Peter Bottomley (Worthing West) (Con)
Further to that point of order, Mr Deputy Speaker. Would it be sensible—whether generally or just in the case of the hon. Member for Rhondda (Chris Bryant)—for Members to be asked to submit their points of order in writing, so that we could be spared the words that are unnecessary to the making of the actual point?
Mr Deputy Speaker
Let me say first that things can happen on a Friday, as was suggested by the hon. Member for Rhondda (Chris Bryant), and secondly that the hon. Member for Worthing West (Sir Peter Bottomley) has certainly got his point on the record.
ADJOURNMENT (EASTER, MAY, WHITSUN, SUMMER, CONFERENCE, NOVEMBER AND CHRISTMAS)
Motion made, and Question put forthwith (Standing Order No. 25),
That this House—
(1) at its rising on Tuesday 27 March 2012, do adjourn until Monday 16 April 2012;
(2) at its rising on Thursday 3 May 2012, do adjourn until Tuesday 8 May 2012;
(3) at its rising on Thursday 24 May 2012, do adjourn until Monday 11 June 2012;
(4) at its rising on Tuesday 17 July 2012, do adjourn until Monday 3 September 2012;
(5) at its rising on Tuesday 18 September 2012, do adjourn until Monday 15 October 2012;
(6) at its rising on Tuesday 13 November 2012, do adjourn until Monday 19 November 2012; and
(7) at its rising on Thursday 20 December 2012, do adjourn until Monday 7 January 2013.—(Mr Heath.)
Mr Christopher Chope (Christchurch) (Con)
On a point of order, Mr Deputy Speaker. If we now go on to the private business for three hours, which will take us beyond 10 o’clock, is it the case that it will not be possible to have a substantive vote on motion 11 on sittings of the House and motion 12 on the business of the House and private Members’ Bills?
Mr Deputy Speaker (Mr Nigel Evans)
There may be Divisions, but they would be deferred.
Estimates
Motion made, and Question put forthwith (Standing Order No. 145),
That this House agrees with the Report [8 February] of the Liaison Committee.—(Mr Heath.)
Question agreed to.
Jacob Rees-Mogg (North East Somerset) (Con)
On a point of order, Mr Deputy Speaker. I would be grateful if you would help the House with the Speaker’s ruling relating to the question of whether this next private Bill affects a public Bill and whether, in accordance with the precedents of the Bill dealing with the Piece Hall in Halifax in 1983-84, because of that clash with a public Bill it ought to be ruled invalid, as Speakers have previously ruled in former times.
Mr Deputy Speaker (Mr Nigel Evans)
Mr Rees-Mogg, you have a copy of a letter from the Speaker dated 17 February 2012, which goes into detail in response to the question that you have raised. You are an intelligent chap, and I am sure that you fully understand it.
London Local Authorities Bill [Lords]
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
21:37 - The House divided: - Ayes: 149 / Noes: 12 - Question accordingly agreed to.
21:50 - The House divided: - Ayes: 11 / Noes: 96 - Question accordingly negatived.
Jacob Rees-Mogg (North East Somerset) (Con)
I beg to move, amendment 22, to leave out clause 9.
Mr Deputy Speaker (Mr Nigel Evans)
With this we are taking amendments 23, 24, 61, 41, 63, 25 to 27, 64, 28, 42, P1, 29, 30, 43, 66, 67, 44, 45, 69 to 74, 31, 75, 46, 47, 32, 48, 49, P2, 33, 60, 51, 76, 52 to 54, 77 to 82, 55, 34, 56 to 58 and P40.
Jacob Rees-Mogg
Clause 9 makes further provision about street trading in relation to the sale of vehicles over the internet. Under the existing street trading legislation in London, street trading is defined, broadly speaking, as the selling, or the exposure or offer for sale, of any article, and the supplying of, or offering to supply, any service in a street for gain or reward, whether or not the gain or reward accrues to the person actually carrying out the trade. It is unclear whether the sale of motor vehicles on the internet when the vehicle is kept on the highway is covered by that definition, but clause 9 will ensure that it is. That is my answer to the intervention from my hon. Friend the Member for Finchley and Golders Green (Mike Freer).
It was an important and relevant intervention, because my concern has been about the criminalising of people who put their car outside their front door with a little label on it saying “For sale”, and of those who do not even put a little label on it but just list it on the internet and say that it is for sale and that it can be found outside No. 22 Acacia avenue. Some bossy bureaucrat may come round and say, “This is absolutely outrageous. You are not allowed to sell your car outside No. 22 Acacia avenue because that is a residential street, so we are fining you and we are going to put all sorts of fierce penalties on you.” That is why I added my name to amendment 22, which proposes to abolish the whole of clause 9—
Mr Deputy Speaker
Order. One moment, Mr Rees-Mogg. As Mr Chope is still in his place, may I say, in response to his point of order a few minutes ago, that I have looked again at motions 11 and 12, and I wish to make it absolutely clear that if either of those motions is objected to after 10 pm, it could not be taken—there would be no deferred Division. I would like to clarify that for the record.
Jacob Rees-Mogg
Thank you, Mr Deputy Speaker.
As I was saying, I added my name to amendment 22, which seeks to remove clause 9, because that clause is a rather vicious clause. It is an unattractive and cruel clause, which attacks people who may simply be making an honest effort to earn their living. Broadly speaking, Conservatives are in favour of people earning their living; we think it is a good thing that people should earn an honest crust. We are not in favour of the something-for-nothing society—we think that that is a bad idea—and we believe in the historic liberties of the British subject. We believe in the freedom to have all sorts of things, not only trial by jury but that great historic freedom, which has built up over 100 years, to sell one’s car outside one’s front door by putting a little notice on it.
The marvellous technology that we have and the incredible electronics at our fingertips allow us to use little things in our pockets to sell our motor cars outside our front door, whether we live at No. 22 Acacia avenue or, for that matter, at No. 23, No. 24 or No. 25 Acacia avenue. Wherever we live in Acacia avenue or in other similarly named streets—Laburnum drive comes to find, as one of these very good addresses—if we want to sell our car via the internet we clearly ought to be allowed to do so. It seems to me to be tremendously important that amendment 22 should be carried by this House to remove a pernicious little clause.
Mr Edward Leigh (Gainsborough) (Con)
My hon. Friend does not have the air of a car salesman.
Jacob Rees-Mogg
I am grateful for that intervention. I would be happy to be a car salesman, because that is an honourable and worthy profession. My reason for saying that is because trading cars is the way to starting in business. People can start off in a small way by putting the little Morris Minor that they bought 20 years ago outside their front door with a sticker on it saying, “This car is for sale for £500, with MOT. It has not been clocked or had done to it any of those terrible things that rogues do.” Somebody might then come along and give them £500, so they go out to buy a second-hand Mini Cooper, which they sell for £800. They then buy a second-hand Ford Cortina and sell it for £2,000. Eventually, they are buying Aston Martin DB5s and putting them outside their front door with a price of £150,000—cheap at twice the price, some might say. That is before they have even got on to thinking about Bentleys, great cars that they are, too—although some might say that they are not quite as good as Aston Martins in their style and sleek lines.
We need to get an entrepreneurial spirit and get people starting in business. How are we going to revive this economy if we do not encourage the small business man, and the tall business man, too? I always feel that this “heightism” on business men and business ladies, who should not be excluded, is a bit unfair. We want to help enterprise. We know that job creation comes from small enterprises, not from big business. Historically—very good figures from the United States are available on this—big business has reduced its labour force, year in, year out, and companies that are starting up develop into bigger businesses employing more and more people. A fascinating statistic in this week’s edition of The Sunday Times suggested that an American business, in its first two years of operation, increases the number of its employees by 160%, whereas an Italian company does so by 20%. That is because America, the land of free enterprise, encourages people to set up their own businesses and to do things in a little way without this overburdening, this overwhelming and this overweening regulation that makes it so difficult for them to earn an honest crust.
Clause 9 is where my objections are centred at the moment, but I can assure you, Mr Deputy Speaker, that I have many more objections to certain aspects of this Bill to come. The clause states that “fees and charges” can be levied on people selling their car, but offering it on the internet is illegal and keeping it on the street for the period that it is on the internet is illegal. That is very unfair, because someone can put something up on the internet one week and it can then be cached—it can be caught—and it remains there ad infinitum. Someone could have traded their car and completed the transaction—they could be the new buyer—but the car could still appear on the internet under an historical cache. They may then find that a council busybody—not one wearing a bowler hat, because the councils did not seem enthused by that idea when I gave them it at an earlier stage in the debate—or some odd-bod could come along and say, “This car is now getting you a fine.” That is why I object—
Mr Nuttall
My hon. Friend refers to council officials today as “odd-bods”. When we considered the first group of amendments on 7 December 2011, he referred to parking attendants and council officials as “desperately scruffy tatterdemalions”. Has he subsequently received any adverse representations from any local authority officials?
Jacob Rees-Mogg
I am grateful to my hon. Friend for that intervention. I ought to clarify things. A lot of council officials are splendid fellows. They are good, honest, hard-working people who do a difficult job that I would not particularly like to do myself. I am very grateful that I can find a parking space when I want one, as a resident. Some traffic wardens really are noble fellows. However, notwithstanding that, there are some carrying out these particularly pernicious activities whom I think we should discourage. We should try to persuade them that their career opportunities lie elsewhere. To answer my hon. Friend’s specific questions about tatterdemalions, I have had very little response from councils. I thought that I might be bombarded with letters from councils. Perhaps these might have come from people from the City of London saying, “This is not how we dress in our borough.” Such letters might have come from that other great city of London, Westminster, but no—there was no correspondence from them. None came from Barking and Dagenham; there was not a jot from Barnet; nor from Bexley, Brent or Bromley.
Camden was silent and Croydon had nothing to say on the issue of whether council officers should be smart and tidy. Ealing, Enfield, Greenwich—they were all lie-abeds, not a word, not a peep, not an utterance came from them. Hackney, Hammersmith—and Fulham, we must not forget poor old Fulham—Haringey, Harrow, Havering, Hillingdon and Hounslow; all of them were horribly quiet on this important issue. Islington—one would have thought that somebody from Islington might have a word or two—
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
Will my hon. Friend give way?
Robert Neill
I do not want to prolong matters, but may I respectfully say to my hon. Friend that as a freeman of the London borough of Havering, I feel it is always important to pronounce the name of that borough correctly?
Jacob Rees-Mogg
I am very grateful for the correction. I did think of saying in my best Eliza Doolittle tones, “’ackney, ’ammersmith, ’aringey, ’arrow, ’avering, ’illingdon and ’ounslow,” but I thought that I had better not phrase myself in that way because, realistically, I am probably more Professor Higgins than Eliza Doolittle in my normal pronunciation.
We have missed out Kensington and Chelsea. They had nothing to say—not a word, not an utterance—about how smart or otherwise their officers should be. Kingston upon Thames, Lambeth, Lewisham—Lewisham, for heaven’s sake. Would one not have thought that the burghers of Lewisham would be up in arms defending the honour of their council officials? Merton was mysteriously silent. From Newham, nothing. Redbridge? No, not an utterance. Richmond, Southwark, Sutton and Tower Hamlets: Tower Hamlets, a grand and noble borough on the edge of the City, with the great Tower of London nobly looking down upon it, had nothing to say. It has the Beefeaters to look at, so one would have thought it would be proud of having fine people who are well dressed. Then there is Waltham Forest—I am not particularly clear where Waltham Forest is, but it is clearly a London borough of the utmost importance. I apologise to anybody here from that distinguished borough. In Wandsworth, they are a very good lot. They are very Tory, so I expect that they are all splendidly and finely attired in gold braid and so on, so when you see them coming you know that they are from Wandsworth and that they are proper gentlemen and ladies of the borough rather than, as my hon. Friend the Member for Bury North (Mr Nuttall) so rightly reminds me, tatterdemalions.
On clause 9, which will make life so unpleasant for people, we made the basic, simple and clean proposition—that which is easiest and cleanest to absorb—that we scrap the whole thing altogether. Bingo—gone. “Goodnight Charlie,” as cricket commentators say. I am not a cricket commentator, so “Goodnight Charlie” is not usually one of my phrases, but I thought it was apposite on this occasion.
We tabled some other amendments in case the promoters of the Bill decided, through some eccentricity of their own, not to remove the clause. The aim is to ensure that what the clause does is watered down, that it is limited in its scope and that there is a proper burden of proof on the authorities so that they must show that it really is business trading activity and not just an individual. It might be an old lady, for example, who needs to supplement her pension and suddenly finds that she is not allowed to sell her car and is penalised for doing so. Some of the amendments—23, 24, 61 and so on—try to clarify and to ameliorate the harshness of clause 9 and to allow a little free enterprise to be encouraged through the boroughs and cities of London. I am glad to say, Mr Deputy Speaker, that you now know the names of all the boroughs and cities of the noble Greater London area, so I do not think I need to repeat them, although I might do so later if I feel moved and if it is relevant to the issue under discussion.
I want to look at some of the other amendments. It is very disappointing that the city of Westminster, which has been for decades one of the best run cities not just in London but in the world—if they had cities on the moon, it would be one of the best run in our part of the solar system, but as far as I know they do not yet have cities on the moon, so I shall stick to the world—and is a fine, noble city run by great Conservative leaders who provided low council tax, low poll tax before that and low rates before that—
Jacob Rees-Mogg
My hon. Friend says community charge from a sedentary position, and I admire his pedantry. I am delighted that there are people in this House who are more pedantic than I am. It is an admirable trait and one that I fear is not encouraged often enough.
Conor Burns
I was merely trying to correct my hon. Friend’s description of that wonderful piece of legislation. He might well not have heard that our right hon. and noble Friend Baroness Thatcher said she still referred to it as a community charge because she was a great fan of the Polish people and would never have tried to tax them.
Jacob Rees-Mogg
That is, of course, extremely wise, as is anything the great lady says. In ancient Rome, the Senate had a practice of deifying great leaders and if this were ancient Rome, I would propose that that great lady be deified, but as it is not I feel that I had better not, particularly as I am talking about clause 10 of the London Local Authorities Bill, the City of Westminster Act 1999 and amendments thereto on street trading in the city of Westminster.
Those who have been paying close attention to what I have been saying will know that I am now up to amendment 26, which is, in line eight on page six, to put after the first reference to vehicle
“in the course of business”.
That goes back to the crux of what I was saying about clause 9, that particularly pernicious and ghastly clause that none of us like that will take effect in all the boroughs across London, including the two cities. It is even less clear in clause 10, about the city of Westminster, whether it affects only business or residents, too.
Mike Freer (Finchley and Golders Green) (Con)
I want to clarify and to pick up the point where we left off some weeks ago. The amendment is accepted, and, to clarify, it is not meant to apply to Mr and Mrs Smith at 26 Acacia avenue but to those who seek to trade through the internet in the course of business, which narrows down the definition considerably.
Jacob Rees-Mogg
I am extremely grateful for that intervention. Do I understand correctly: is amendment 26 accepted?
Jacob Rees-Mogg
Some people might wonder why some of us speak for hours in these debates, but I must say that is exactly why. By banging on a little, we get steady improvement and amelioration of the penalties on the British people.
As I tried to explain in my opening remarks on this group of amendments, this is all about protecting the liberty of individuals from the constant encroachment of the state, bit by bit, day by day, not to meet some urgent or desperate cause, not because we are at war or because we face terrorists, but because it is more administratively convenient. One of the most important things that this Parliament can do is, by the proper scrutinising of legislation, ensure that the penalties on individuals are always minimised and that the greatest number of freedoms that can be preserved are preserved. I am extremely grateful to my hon. Friend the Member for Finchley and Golders Green for notifying us of that fact, which is a considerable improvement in the Bill and helps us to get to where we want to go.
Mr Christopher Chope (Christchurch) (Con)
My hon. Friend is introducing this group of amendments with such expertise. In fairness to our hon. Friend the Member for Finchley and Golders Green (Mike Freer), he indicated some time ago that the promoter was prepared to accept the amendment. I was surprised, however, by the implication in his intervention just now that it was basically a drafting error that resulted in
“in the course of business”
being left out of clause 10 whereas it was included in clause 9. If it was just a drafting error, it is surprising that the Bill has gone through the other place and through detailed consideration in Committee in this House before that error emerged.
Jacob Rees-Mogg
I am grateful to my hon. Friend for that point. It is, of course, human to err and divine to forgive, so we will be very forgiving of that error in this instance.
I do not like the clause at all. I have tabled my own amendment, which would get rid of it altogether, for much the same arguments as those I made about clause 9. In reality, we do not want high penalties for people who do things that cause modest inconvenience. A few people having a few cars on the road is not the end of the world.
Rebecca Harris (Castle Point) (Con)
I think my hon. Friend is misunderstanding the scale of the problem, which is often not a modest inconvenience. I have residents in my borough of Castle Point, which will not be covered by this legislation, who have been extremely inconvenienced by large numbers of cars parked on residential streets. That means that young mums with lots of children and paraphernalia have to walk a considerable distance to their homes and the elderly lady of whom my hon. Friend spoke, who might wish to sell her car, is also an elderly lady who cannot get close to her home for other cars and who is frightened by having to walk several streets in the dark at night because she cannot park near her home. I do not think that that is a modest inconvenience.
Jacob Rees-Mogg
I am grateful to my hon. Friend for an extremely helpful and important intervention, which suggests that the Bill should be a public one covering the whole country. If there is a widespread problem in Castle Point, in North East Somerset and possibly in Scotland, Yorkshire and other parts—even in Wales, where my hon. Friend the Member for Montgomeryshire (Glyn Davies) represents his constituency so nobly and so well—there should be a Bill that covers the whole of the United Kingdom. It may be a devolved power, so we may not be able to legislate for Scotland, Wales and Northern Ireland, although their Assemblies may like to ask us to do so. However, if the problem is not so widespread and if it is not a matter for public law, is it really right that in certain areas a private Bill should institute the legal penalties with the full force of law behind them that we get in Westminster and some London boroughs but not in Castle Point? Thus residents in the constituency of my hon. Friend the Member for Castle Point (Rebecca Harris) will not have the benefit of the Bill, but if they happened to move to London and then decided to sell a car, they would risk being caught out because they were not aware of the law.
We are creating bad law from the start. One of the great principles of law is that it should be clear and simple to understand. It should not be arbitrary; it should apply uniformly to each equally. Bringing in the type of law that is in the Bill is to make arbitrary law with the full force of penalties behind it, including the possible confiscation of vehicles, if the person does not pay the fees and charges levied. Is that a reasonable way to proceed? If the matter is so urgent and essential—to return to my earlier point—it ought to be a public Bill and the Government ought to be driving it through. The problem should be dealt with in the country at large; simply dealing with it in some London boroughs, in particular the City of Westminster, is not satisfactory.
Mr Chope
If the Bill goes through in its current state, the problem described by our hon. Friend the Member for Castle Point (Rebecca Harris) could become worse. Residents involved in the motor trade in London will move their vehicles from the streets of London to the streets of Castle Point and other areas outside London. I hope that in due course she will vote with us to remove the clauses from the Bill.
Jacob Rees-Mogg
I am grateful to my hon. Friend for that wise intervention. It is like squeezing a balloon. I doubt, Mr Deputy Speaker, that you have ever squeezed a balloon, which is rather a childish habit, but if people do, they find that it goes in at the middle and a bit goes up and down and out of the way—[Interruption.] My hon. Friend the Member for Montgomeryshire says it is like a water bed; I have never had the disadvantage—or advantage or pleasure—of sleeping on a water bed, so I really cannot comment.
To develop the point made by my hon. Friend the Member for Christchurch (Mr Chope), if people shift from the centre towards the suburbs and then further out, it would not be too bad because at least business would be carried on. We rail against the European Union for introducing more and more regulation against business. In speech after speech, particularly from the Government Benches, we say we want more business and we want to deregulate so that business can get on with what it is trying to do. But then what do we do? We have this musty, hangover Bill that has been mouldering around in Parliament for several years, and because nobody is willing to stand up and say that it ought to be a dead duck, it keeps on going. I am sorry for the mixed metaphors; the dead ducks would have had to be stuffed to be in that musty and mouldering condition.
The Bill is an improper and bad way of legislating, and it is fundamentally against Conservative principles. I am glad that there are Lib Dems in the Chamber, because I do not think the Bill upholds Lib Dem principles either. One of the great virtues of the historic Liberal party, and one of the things that I have always thought made it so attractive and why I quite like the coalition, is that Liberals are genuinely liberal in parts; they believe that people should be relatively free and regulated only when it is essential, rather than for the convenience of the bureaucrat. In the order of priority, the bureaucrat comes pretty low down. The measure may be convenient for a few people who are strolling along, but we have to weigh up the inconvenience caused when parking spaces are taken, with the weight of the law coming down on people and the risk of putting them out of business and conceivably out of work.
Rebecca Harris
Is my hon. Friend aware of the difficulties imposed on legitimate car traders, who have planning permission and pay business rates and rent for their parking lot? They are being undercut by people who park large numbers of cars on residential streets, without planning permission, and who sometimes evade paying tax or registering the sale. Does he think that is a legitimate or fair way to proceed?
Jacob Rees-Mogg
I welcome my hon. Friend’s conversion to deregulation and low taxes. If the problem is that we are encouraging the black market, we should free up the white market and reduce taxes and decrease regulation. If something unfair is happening, the answer of the bureaucrat is always to regulate to make it fair, not to deregulate to make it fair. Actually, we should tell legitimate traders, “Okay, you’re in competition with somebody who isn’t paying rates so let’s have lower rates because otherwise you’ll go out of business.” We should look at whether planning permission is a proper way to regulate business, or whether there are already too many burdens and costs on business. As so often, I am at one with my hon. Friend in feeling that the situation offers a good argument for deregulation, cutting taxes and getting at things from a positive angle, rather than always looking at the negative and stopping people doing things. How do we make the economy grow? We free people from the shackles of the state, removing the dead hand of regulation; not by putting more regulation on them.
One of my bugbears about a number of clauses is the level of proof required and the seniority of the person who can enforce penalties, so I have tabled a number of amendments, in particular 42 and 43, to raise the standard of proof and of the person who will issue a certificate. In subsection (7), amendment 42 would replace the words “reasonable cause” with “proof that”. That would mean that we could be certain.
Right back to Magna Carta, we have had a high standard of legal protection for people and their goods. People cannot have their goods taken from them without a court order. It is a good historic principle of British law and it is in the Magna Carta; no free man shall be taken or his goods taken without the judgment of a court against him. As we know, the principle developed with jury trial—although juries predate the Magna Carta —but in recent years we have been moving to an administrative system that allows not the courts to decide whether something should happen, but people at a much lower level who require lower levels of proof; hence, reasonable cause. Is it really satisfactory that somebody who is not even a police officer and does not need proof that a person is breaking the law can impose penalties? That seems fundamentally unjust.
The Bill provides that if a person sells their car in the street in Westminster, it can be seized by an “authorised officer” who has “reasonable cause” to suspect that that is what they are doing. My amendment would require there to be proof of the activity and that the order should be issued by a magistrate. The magistrates court is the lowest court in the land, but at least the person would have the judgment of a court against them. One of our most ancient liberties is protected if the judgment comes from a magistrate and is not given simply by an authorised officer or a constable.
It is easy to pass private Bills that include penalties and forfeitures that are not to the standard that would be required in a public Bill, because the standard of scrutiny is considerably lower. I realise we have many hours to discuss the Bill—we are on our third set of three hours—but we do so with a relatively thinly attended Chamber and without great enthusiasm for looking at the nitty-gritty and the detail of the Bill.
Glyn Davies (Montgomeryshire) (Con)
I find my hon. Friend’s argument persuasive, but does he agree that when we give authority to people, it changes the nature of the people to whom authority has been given? Suddenly, perfectly ordinary, rational people become hugely important and full of the power that they have been given. They make the situation far worse by becoming dominant and forceful.
Jacob Rees-Mogg
I have the greatest sympathy with my hon. Friend’s view. It can often be a mistake to give an excessive amount of power in one particular area to relatively junior people. The authorised officer who is entitled to seize a vehicle is likely to be a relatively low-paid official who suddenly has the power to go round and confiscate a car. It might be quite a nice car—possibly that Aston Martin DB5 that I was talking about a few moments ago, which somebody was trying to sell on the internet for a good price. Then some teenaged council officer comes round and says, “I rather like that.” Bang. He says, “I’ve seen that on the internet. I’m going to issue a seizure notice and seize it.”
That does not build in the proper protections that we ought to have as British subjects. I know this is a long-winded speech and that many aspects of it are not entirely serious, but this is serious. The protection of our individual liberties ought to be the daily concern—the hourly concern—of Members of Parliament, because we are the people who can do something about that. It is in the nature of Government to erode people’s liberties because liberties are inconvenient. Liberties make people object to things that Governments are doing. They stop the great steamroller of Government coming down the tarmac. We as Members of Parliament are here to constrain that great urge of Government—to bind them down so that their infringements of liberty can occur only when they are essential.
I find it hard to believe that it is essential for the good of this great nation that my teenage authorised officer should be able to seize a motor car because somebody wanted to sell it on the internet, just because he has reasonable suspicion and not with any proof or any order of a court. I said that I disliked the whole clause altogether, but if we are to have this rotten clause, let us make it a little less rotten so that we can at least have protections for the individual.
Mr Chope
My hon. Friend is making a powerful point. Does he agree that the concern of many is that that could lead to disputes between neighbours? Someone could maliciously advertise on the internet a car belonging not to him, but to the neighbour with whom he has fallen out? The low-grade officer to whom my hon. Friend refers could then use the powers under the Bill to seize that vehicle, thereby causing great embarrassment and injustice.
Jacob Rees-Mogg
My hon. Friend’s imagination is so wonderful and glorious that it allows us to consider the possibility that a malevolent neighbour—you could not possibly have a malevolent neighbour, Mr Deputy Speaker, being so good-natured yourself, but others may—could take a little photograph of the car. Do you know, Mr Deputy Speaker, that you can take photographs with your telephone nowadays? This is one of the great delights of modern technology.
People take photographs even of MPs going about their daily business and put them on websites. They have not yet said that any MP is for sale, but they could take a photograph with their mobile telephone of a motor car, put it on the internet, say it is for sale, and then ring up the council and say, “Look what my neighbour is doing,” and how outrageous that is. Around comes the authorised officer and practically drives off in a brand-new Bentley. That would be very tiresome for the person who had bought a brand-new Bentley, if anybody could afford such things in these days of austerity.
I agree entirely with my hon. Friend. He identifies a concern that we should all have. We in the House are all in favour of brotherly love—I look at my right hon. Friend the Member for Mid Sussex (Nicholas Soames) as I say that, and I know how much he values brotherly love among all peoples and all nations—but I am sorry to say that that is not how people live sometimes in the real world. They sometimes have disputes. They sometimes go to law courts over a hedge that is 2 or 3 inches above where it should be. They sometimes go to law courts over a perch of land, if that is still a unit that is allowed in these European days, and they argue through the courts for years and years, decades and decades, and cost themselves hundreds of thousands of pounds for a piece of land that was worth £20 or £1,000 to start with.
We could in this way, as my hon. Friend the Member for Christchurch said, have neighbourly disputes made worse. The injunction that we get from the Bible, “Love thy neighbour as thyself,” would fall on sandy ground, as we found that all those cars were being purloined, in effect, by those authorised officers.
Mr Nuttall
My hon. Friend will have seen amendment 67, which was tabled by our hon. Friend the Member for Shipley (Philip Davies), proposing that the power be given to the Mayor of London. Would my hon. Friend like to give the House the benefit of his views about the merits of that proposal?
Jacob Rees-Mogg
I am very interested to think about that proposal. The current Mayor of London is one of the greatest men who has ever lived. That is without question. He is a genius par excellence. He is an exciting, charismatic figure who bestrides the nation as a colossus of political affairs. There is a “but” coming, as my hon. Friends probably realised, though it does not relate to the former hon. Member for Henley, Mr Boris Johnson. It relates to who may come after him.
I go back to what I was saying about Lady Thatcher. If it were possible to deify people, Mr Boris Johnson would be next on the list, after the great lady, but he will not live for ever. He will not be Mayor for ever. Indeed, some people think—some people are heard to gossip and to speculate—that the Mayor of London has higher ambitions and is looking to come back into alternative places to carry out his duties. Therefore “the Mayor of London” refers, sadly, not to the individual who currently holds the office, but to the office itself, so I am not entirely supportive of amendment 67 tabled by my hon. Friend the Member for Shipley (Philip Davies). I feel that we would be taking a risk, a gamble.
We would, to use that term that is rarely heard, be playing with fire. We would be risking the happiness of our prospective fellow countrymen, or of our constituents if we represent London constituencies, by putting in somebody who might be a left-wing firebrand—some dangerous socialist figure who wanted only to penalise motor car owners—as the Mayor of London. We might—heaven help us—end up with a Green Mayor of London. The mind boggles at the thought of what a Green Mayor might do—a red one would be bad enough. Therefore, I think that it is safer to leave the power with the Secretary of State, as my amendment proposes.
Mr Deputy Speaker, you might expect me to prefer my own amendment to another Member’s, however wise and good they are, but I fear that we might not always have the Mayor of London that we would want, particularly through a long parliamentary Session. Sometimes the electors become bored with the party in power, and they might elect someone else to the mayoralty midway through the Session just to show the governing party that they can do so. Of course, we are not worried about that happening this time. The great Boris Johnson is so far ahead, by every measure that humanity can discover, that it is extremely unlikely that we will find some red, green or—I will whisper this very quietly—yellow candidate getting close to the mayoralty. If they did, however, we might find that the protection that I am trying to put in the Bill was not there.
Some very fine people have been, and are, Secretaries of State. I am thinking in particular of the Department that is relevant to this debate, which has one of the finest Secretaries of State in Her Majesty’s Government, a man who is hugely respected by everyone, and not only in the Conservative party, but in all parties up and down the country, and probably further afield, but as they do not have votes in British general elections we are not too worried about them for the purposes of this debate.
Amendment 45, which stands in my name and those of my hon. Friends, seeks to ameliorate the pains and penalties of the Bill by giving people a chance to get things right and not to be penalised too quickly. It proposes that they should have 28 days, rather than 14, to abide by the notice that has been issued under the order of the Secretary of State, rather than the council, if my amendment 44 is accepted, or under the order of the Mayor of London if the amendment tabled by my hon. Friend the Member for Shipley is accepted.
It looks as though the cost of a Royal Mail second-class stamp is about to go up to 55p. Councils are rather mean when sending such notices out and are unlikely to use the recorded delivery service. E-mail is no good if the council does not have the individual’s e-mail address, and the Driver and Vehicle Licensing Agency asks only for a postal address, not an e-mail address, when people register with it, so these things have to go through the post. It seems to me that, considering the standard of the postal service sometimes, particularly around Christmas, 14 days is far too short. People might find that they have been penalised extremely unfairly.
I reiterate that everything I am trying to do with this batch of amendments, as with others, is alleviate the penalties, pains, powers and restrictions of freedom set out in the Bill. It might not be the will of the House that I get rid of the entire clause, but at least the House will understand why it is important to ensure that people have justice. The great call of this House over many centuries has been to provide people with the justice they need to protect them from an over-mighty state that wishes to interfere in their liberties.
The next set of amendments relate to clause 14. I do not wish to sound like a broken record or for people to say, “Turn to the flip-side”, or whatever it is they say when they want the tone to change, but I believe that clause 14 ought to go in its entirety, and that is what amendment 46, which I and a number of hon. Friends have tabled, would do. Once again, we are dealing with the power to take people’s goods without the judgment of a court, and that cannot conceivably be right, just or in line with our understanding of the historic liberties of the individual, which should be protected.
Clause 14 applies to the city of Westminster; it is not a general clause. It states:
“An authorised officer of the Council or a constable may in the Borough seize any receptacle or equipment (other than a motor vehicle) which… is in a street”.
We could have someone wandering along the street who can seize a receptacle without so much as a “by your leave”, an order of a court or, at this stage, any proof that something is going on. The clause continues that the authorised officer may do this if he has “reasonable cause to suspect” that the receptacle is intended to be used in connection with unlicensed street trading. Who knows what could happen? Someone could be pushing a pram along the street and taking goods home in it while their baby was at nursery school, and the pram and goods could be seized because it might look as though they could be used for trading. Indeed, people might start trading their goods in prams because that might be a way of getting around the rules. The provision is so broad that all that it requires is for the officer to have “reasonable cause to suspect” that the receptacle is intended to be used in connection with unlicensed street trading. What if someone had been shopping and perhaps bought a few saucepans and a barbecue set and was wheeling it home? Would a council officer suddenly pounce on them and say, “I’d rather like that for my own home. I think I’ll take it, thank you so much, because you look like you’re about to do a little unlicensed street trading.”
It comes back to this desperate opposition to free trade, free markets and enterprise and a belief that regulating everything will create a perfect world. I am sorry to disappoint you, Mr Deputy Speaker, but however much we regulate, we will not create a perfect world. It simply will not happen, even in the great, noble and wondrous city of Westminster.
What are my various proposals? My first proposal is to get rid of the whole beastly clause. I understand that people do not like the smell of onions outside their front door when people are trading, and I know that one of the front doors in question is that of Buckingham palace, a front door that I think should be particularly protected from the smell of onions when people are doing a bit of street trading. Perhaps even this place should be protected in that way, although I do not think that it would do MPs any harm to walk past the smell of onions on their way to work in the mornings. I appreciate that that is unpleasant. I also understand that criminal gangs might be involved but, if they are, they should be got for serious criminal crime—that is a bit of a tautology, even when speaking so briefly—rather than for an invented crime of just looking as though one might want to sell something in the street.
What about Big Issue sellers? Will their copies of the Big Issue be confiscated because they might be doing a bit of unlicensed street trading? Some of them of course have licences. I hope that all the people who give out the Evening Standard have licences—they can hardly sell it, now that they give it out for free. This is just another attack on trade, and we need trade. We need people to be in employment and to work and we need the economy to boom. We will never get the boom back into Britain without some street trading or if we have some terrible and draconian regulations. I do not think that Draco would ever have thought up such regulations—I am not sure that there was a lot of street trading in Athens when he was around, but there might have been for all I know. They are draconian regulations that seek to discourage trade and penalise the entrepreneur and those who are trying to do their bit for society, rather than those who want something for nothing.
As with clause 10, I have looked at clause 14 in detail and thought that, although it is a nasty and pernicious clause—one might say that it is so nasty that it smells of rancid onions—if we are not to get rid of it in its entirely, let us at least try to ameliorate some of its faults and see what we can do to make it more reasonable and in line with our great traditions. Therefore, I have made certain suggestions. Amendment 47 would leave out “an authorised officer” and replace it with “a magistrate”. The magistracy really is the foundation of our courts system. It has a wonderful history and tradition. The lay magistracy has been particularly important in protecting our freedoms and bringing people from the community with a degree of wisdom and understanding of their local area to enforce the law there. The stipendiary magistracy, now called district judges, has formalised that, and in an urban setting it would more usually be a stipendiary magistrate who would have that responsibility, but Magna Carta still ought to count.
In these few words that is the third time I have mentioned Magna Carta—that was the fourth—but it is very important, because that document is what set us on the path to freedom, rights of property and the rule of law, which has led to the prosperity not just of this nation but of the United States and of Commonwealth nations that have had the benefit of that great history and tradition.
For some reason, and I think it is to do with the European Communities Act and the administrative approach taken across the Channel, in recent years we have removed the protection of the court from our subjects, and that is wrong. If we can put it back, we ought to put it back.
Glyn Davies
This is perhaps one area—the uniform—where I feel rather suspicious of what we are talking about. In my experience we should be careful, because whenever we put a uniform on somebody we immediately enhance their own self-importance. My previous intervention was about junior officers becoming hugely important when given authority, and that importance would be multiplied if we gave them a uniform.
Jacob Rees-Mogg
My hon. Friend makes a good point, as always, and it is one of those occasions when one needs balance: one needs the Lib-Dem approach to it—neither one thing nor the other, but something in between. One needs to have sufficient respectability of the person so that people know that it is an officer with some authority, but equally one needs to be in a position where the officer does not let that authority go to their head by being so overburdened with gold braid and pride that they feel they are enormously powerful and must intervene. I should not give them one of those spiked helmets that one sees in old first world war films with the Prussian officers marching out; that might give the wrong impression. I suggested earlier that a bowler hat might be suitable, and that may be the right way.
Tom Brake (Carshalton and Wallington) (LD)
Does the hon. Gentleman agree that there is no link between the level of self-importance that someone feels and whether they have a uniform or not?
Jacob Rees-Mogg
Some people may have been thinking from my speech that, despite not being in a uniform, I have an undue level of self-importance, so my hon. Friend’s point is probably one that Members, as much as others, should bear in mind.
If we develop the uniform theme and decide that it gives such officials too much power, we might decide that they should just have the badge of Westminster on their ordinary clothes, so that at least one would knew who they were. I thought that you, Mr Deputy Speaker, would be dying to know what the badge is:
“A Portcullis chained and ensigned of a Mural Crown between on the dexter side a united Rose and on the sinister side a Lily”—
once again stalked, but—
“both stalked and leaved all Or,”
which is exactly the ticket for issuing tickets, so to speak.
Jacob Rees-Mogg
That is an idea of the most sumptuous gloriousness. It would be a fine way of raising money and reducing the council tax for residents if we could get Westminster city council into a bit of unlicensed street trading on the side, and of course its officers would not penalise it because it would be effectively above the law.
Bob Blackman (Harrow East) (Con)
I am listening to my hon. Friend’s speech with great interest, but would not the advent of selling such badges—badges of honour, perhaps—mean that unscrupulous individuals might get hold of replicas and do to other members of the community precisely what he has been describing?
Jacob Rees-Mogg
It was Winston Churchill who said that he had often had to eat his words and had found it a very good diet. I am very much in the same position now: I am dutifully eating my words in relation to the earlier answer I gave, because that is exactly the problem that we might have. People might get those badges, which I described earlier, and of which I am sure the House would like to be reminded:
“A Portcullis chained and ensigned of a Mural Crown between on the dexter side a united Rose and on the sinister side a Lily both stalked and leaved all Or.”
But perhaps instead of having them “all Or” we should have them “all Argent”. Then we would know that they were not the real thing, and it would allow us to sell them and raise a bit of money without allowing anybody to go around impersonating one of those officers. My hon. Friend’s point is of serious importance: one would have to have a uniform that could not be easily replicated, but if one could make a little money on the side by selling something similar that would be beneficial.
One thinks of cricket teams that do so. Somerset county cricket club sells its shirts, which are extraordinarily popular. I do not wear them myself, but with younger people they are very popular and a good way of raising money and keeping ticket prices down, so perhaps one would get some benefit from that, as tourists came along and decided to buy imitations rather than the real thing.
One can buy imitation policeman’s helmets, which have plastic insignia on them and little plastic silver things on top, and that does not confuse too many people. My four-year-old enjoys wearing one, and he has never been arrested for impersonating an officer, although he is actually under the age of criminal responsibility so he cannot be arrested anyway. He cannot even be got by one of these council officers, because he has not worked out how to sell a car on the internet, although if he sold mine I would not be unduly delighted.
I have proposed adding “in uniform”, and if we look at some of the other parts of clauses 14 and 15, we find that for consistency I have proposed making sure that we have “magistrates” as well. I do not wish to repeat myself unduly, but the point is one worth making, and I have always thought, “If it is a good point, make it again and again and perhaps one day somebody will listen,” because we need orders from magistrates to ensure that the measure is proper, valid, just, right and observes—respects—the historic rights that we have had for so many centuries.
I want to move on at quite some speed, because there are any number of people who are looking forward to speaking on this great subject and have tabled amendments—many more than I have. Indeed, the Bill’s sponsor has proposed some of his own amendments, which people will want to debate at considerable length, so I turn to amendments 56 and 57 to clause 16. Earlier in the clause I suggest that an object’s disposal be subject to an order by “A magistrate”, but these proposed changes would just tie down the councils on costs, amending clause 16(3) so that it stated that the council may recover its “reasonable” costs, rather than any costs.
When councils take enforcement action, they should not do so as a profit centre. Although, strictly speaking, they would not be allowed to do so, it is amazing how people wangle their way around the rules. We know that from parking tickets, which started as a means of stopping congestion. Suddenly, we discover that councils are using them to build up their bank reserves because they are not getting the money that they want from other sources in this age of austerity, such as from central Government. A little bit extra from parking fines is very helpful. That is particularly iniquitous. Let us therefore put in the word “reasonable” and tie the councils down. I cannot really see why they would object, if they have no sinister motive. I am sure that they have no sinister motive because otherwise we would have spotted it earlier and thrown out the Bill on Second Reading. Clause 16 should therefore read “reasonable costs”.
When a seizure takes place and what is seized is sold, under amendment 57 any excess money would go back to the person and the fine would not exceed the value of what has been confiscated. Again, it is unfair to penalise people twice for the same thing: once for a minor offence is more than enough, and twice—to go on and on and repeat it again and again—seems to me to be fundamentally unfair. We should therefore put in some limits.
The whole thread of my amendments is to protect the legitimate individual, and perhaps even the slightly spivvy individual who wanders between the right and the wrong side of the law. When he is on the right side of the law, he has rights too. Just because somebody has been a bit spivvy once does not mean that all his rights should be suspended, destroyed, eroded or removed. Even that fellow Mr Qatada was let out of prison when there was no reasonable prospect of deporting him. Even the nastiest people have some rights. People who have been selling a few things on an illegal stall must surely be protected, if they are having their livelihood taken away, from having their utensils taken away and an unreasonable fine served upon them as well. It is important to maintain the great, historic liberties.
That brings me to clause 18. I really will be coming to an end quite soon. This is not my proposal, but it is in this group and I think that it is particularly sensible. Amendment 35 suggests getting rid of clause 18 altogether. One might say that we should get rid of the whole Bill, but that may come a little later, on Third Reading. Clause 18 will apply a fine at level 3 for people who obstruct one of the council officers. The reason that I have taken objection to that, do take objection to it and will continue to take objection to it is that one does not know who the officer is. One cannot be certain that somebody genuinely is an officer of the council. One may be fooled. As a general principle, the law must be clear.
If some foolish person steals a policeman’s helmet on boat race night, as we all know Bertie Wooster did, he knows that when he is brought up before the beak, he is being charged fairly and justly. If instead of pinching a policeman’s helmet, Bertie Wooster had met one of these authorised officers, who said that he thought his Widgeon Seven was for sale on the internet, Mr Wooster might have said, “Who are you? How I do know that you have any authority to tell me not to sell my Widgeon Seven on the internet?” For the sake of clarity, the internet was not invented when Mr Bertie Wooster was driving the Widgeon Seven, which was some decades ago. However, I do not think that that invalidates the argument. It is an example of what could happen. It might not be Mr Wooster with a Widgeon Seven; it might be any one of our constituents who happens to be in London with a Ford or Renault, if people buy French cars. They simply might not know whether the person who tries to give them a ticket is an authorised officer.
Any true-born English person, and probably any Welsh person or Scots person, would be very affronted if some busybody came up to them saying, “I’m giving you a fine,” unless they could be certain who that person really was and that they had a legitimate authority. This proposal is even more pernicious because people coming to London will not know that rules in London are different to those where they come from. My constituents who come to London will find these peculiar officers bouncing out at them from around corners saying, “We’re giving you a fine.” My constituents will definitely take no notice of that. They will say, “I don’t give a fig for your fine.” They will then be done under clause 18 and receive a fine not exceeding level 3 for saying that they do not give a fig for a fine. I think that a man from Somerset should be allowed to say that to somebody unless he knows clearly that that person is who he pretends to be and has a uniform to prove it.
Mr Chope
I first congratulate my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) on another brilliant contribution to this debate. I particularly enjoyed his peroration, which was a paean of praise for liberty. It is appropriate that the people who support liberty are well represented in the Chamber tonight, whereas those who have always been in favour of restricting liberty are not well represented.
As you know, Mr Deputy Speaker, this group of amendments was first debated on the occasion of our Prime Minister’s visit to the Parliamentary Assembly of the Council of Europe. It was the first time that a Prime Minister had visited the Parliamentary Assembly for some 30 years. As a member of the Parliamentary Assembly, I was in Strasbourg rather than here. That is why I was unable to introduce the group of amendments and to move amendment 22. My hon. Friend the Member for North East Somerset has done so with tremendous expertise. He has kept his remarks succinct and to the point, and has given us an example of how we should deal with such matters in this Chamber.
Amendment 22 goes to the root of the Bill and is likely to be the one in this group upon which we will have a Division, but I am delighted that my hon. Friend the Member for Finchley and Golders Green (Mike Freer) has accepted amendment 26, and I hope that in due course I will have the chance to move it formally and that the House will support it.
Amendment 22 suggests leaving out clause 9, entitled “Street trading: vehicles and the internet”. The way in which the promoters of the Bill have described the purpose of the clause is slightly disingenuous, because they state that it
“would amend the street trading provisions of the London Local Authorities Act 1990 so as to clarify that vehicles which are for sale in the course of a business on the internet and which are parked on the street fall within the licensing regime.”
That implies that they believe such vehicles may already be covered by that Act. Why do they not have the courage of their convictions and say that the purpose of the clause is to extend the current provisions to bring the sale of vehicles on the internet in the course of business within the ambit of that Act? They say that it
“would not apply to residents or other individuals selling their own vehicle on an occasional basis.”
We must be grateful for small mercies such as that and the fact that amendment 26 is to be incorporated into clause 10, so that it will carry a similar caveat.
I have always believed that we need to examine carefully the text of Bills such as this, to ensure that they have apparent clarity. We are discussing the creation of new offences, and if people are to be charged with those offences, or find themselves losing their trade and livelihood or being otherwise punished, it is vital that they should know exactly where they stand. The exchange between my hon. Friend the Member for North East Somerset and my hon. Friend the Member for Castle Point (Rebecca Harris) illustrated vividly the misunderstandings that can arise when there is ambiguous wording. Clause 9 does not state where the street in question has to be. It states that the motor vehicle has to be
“kept on a street during the period when it is so exposed or offered for sale”.
There is ambiguity about the location at which an offence will be committed. Will it be where the vehicle is kept or where the owner resides? That is a significant question, because if there is a problem in Castle Point—I accept what my hon. Friend said about that—it will inevitably be made worse if we interpret clause 9 as prohibiting people who are resident in London from keeping their cars on a street in London when they are exposed or offered for sale on the internet.
For how long must a vehicle be kept on a street? The clause states that it must be
“during the period when it is so exposed or offered for sale.”
As my hon. Friend the Member for North East Somerset said, it is possible to put something on the internet and leave it there for some time. Sometimes, one looks at a property on the internet and says, “Gosh, that’s a really well priced property”, but when one looks at it in more detail, one finds that it was actually being offered at that price about five years ago and has long since been either sold or withdrawn from the market. Things can be advertised for sale on the internet without anybody being sure whether that exposure or offer for sale is current and up to date.
The expression
“exposed or offered for sale”
is used in the Bill. What is the difference between being exposed for sale and offered for sale on the internet? I hope that when my hon. Friend the Member for Finchley and Golders Green responds to the debate he will be able to explain why it was thought necessary to include both those expressions.
A lot of people buy and sell vehicles, and it is hard to know when they cross the dividing line between a purely private sale and a sale in the course of a business. How will that be defined and policed? If a person sells one vehicle on the internet, will that mean he is doing so in the course of a business, or will there need to be evidence that he has sold other vehicles on the internet, or that the internet site or advertisement used contains more than one vehicle registered in his name?
Nor do we know whether the person exposing a motor vehicle for sale on the internet will have to be its owner. Many people have agents acting on their behalf who sell things without ownership having passed to them. If a sale is made, a commission payment may be due to them. We do not know whether it is intended that the clause will apply to anybody whose vehicle is advertised whether or not they are selling it in the course of a business. For example, if I were to use an intermediary to advertise my vehicle on the internet on my behalf, although I would be exposing it for sale as a private individual, the intermediary would be doing so as a business proposition. Would that mean that my private sale would contradict the provisions of clause 9? It is disingenuous in the extreme for the promoters to say that it is a clause of clarification, because it significantly extends the restrictions upon street trading by widening enormously the definition of street trading in London.
A point that has already been made in the debate, but is worth making again, is that we are talking about London local authorities. If there is a real problem such as my hon. Friend the Member for Castle Point described, it should surely be dealt with in a public Bill rather than in piecemeal, incremental legislation such as the Bill. Clause 9 relates specifically to the whole of London; clauses 10, 11 and 12 relate specifically to the City of Westminster; and clauses 13, 14, 15 and 16 relate to Camden. That follows a pattern that we have seen with a number of private Bills whereby the City of Westminster goes ahead first, and then the legislation that they get through is applied for by the London local authorities collectively, or perhaps by the London borough of Camden or another London authority—the idea being, I think, that nobody will take much notice if just one borough is doing it. Then the precedent is set and other boroughs follow suit, and before we know it we have a whole series of pieces of private legislation that come together and act significantly to restrict the liberties of the individual.
Sir Peter Bottomley (Worthing West) (Con)
When I have had responsibility, I have always found that if one tries something out and it works, other people want to copy it. Local authorities will need to promote their own legislation in order to have the same powers as those in places where it has worked elsewhere. Surely the critical thing is whether the powers have had a beneficial effect on the public.
Mr Chope
That is a very potent intervention, because it covers several different issues. My hon. Friend is basically saying that it should be open to an individual local authority to be able to carry out an experiment. I do not think that anybody disputes the advantages that certain experiments can have, but there is no reason why an experiment cannot be contained in a public Bill or have a sunset clause. I am not sure that he has dealt with the concerns that we have been expressing.
As for whether the Bill is in the public interest, it is obviously important that any legislation that goes on to the statute book is in the public interest, but what do we mean by “public”? A private Bill operates differently as between one part of the country and another. My hon. Friend the Member for Finchley and Golders Green may say that the Bill is arguably in the interests of the public in London, but is it also in the interests of the public in boroughs adjacent to London that will not be covered by it and where there may well be a spill-over effect that is adverse to their interests?
Sir Peter Bottomley
At the risk of stating the blindingly obvious, is my hon. Friend arguing that we should not allow local authorities to apply for powers to try something out, or that because it might be suitable for one local authority, every local authority should have the same powers at the same time? One has to decide whether one is a conservative or a socialist, and I think that my hon. Friend is trespassing slightly from our side of the House.
Mr Chope
If my hon. Friend’s intention is to provoke me by describing me as a socialist, he has certainly succeeded. I have always been a great believer in enabling legislation. There is nothing to prevent the Government from introducing a public Bill that enables local authorities to carry out an experiment if they want to, and then, if they do not like what they are doing, to amend the laws locally. A public Bill with enabling powers is a much better way of meeting my hon. Friend’s concerns.
Mr Chope
I note from my hon. Friend’s gestures that he accepts that that would be a better way forward. I hope that the Minister will also be able to endorse that line of argument when he expresses his views about why local authorities should not be encouraged to bring forward these private Bills, which seem to be taking up an inordinate amount of debating time in the House.
Sir Peter Bottomley
I think that it would be an objective remark to say that the amount of time taken up is determined by those who speak, not by the amount of legislation.
Mr Chope
Again, I differ with my hon. Friend. It is a function of the quality of the legislation. A good Bill that is well drafted and commands popular support will go through very quickly, as we saw earlier in this Session with the private Member’s Bill promoted by my hon. Friend the Member for Woking (Jonathan Lord). He hardly had a chance to get a word in edgeways on his own Bill—his maiden Bill—because it sped through all its stages, and that is because it was well drafted, pertinent and met a need.
Chris Williamson (Derby North) (Lab)
The hon. Gentleman talks about popular support. Is it not significant that not one single Member of Parliament from London who will be affected by this Bill has spoken in opposition to it? Does not that suggest that there is popular support for it?
Mr Chope
I see that the hon. Gentleman and the hon. Member for Clwyd South (Susan Elan Jones) are the only two representatives on the Opposition Benches. I interpret the lack of attendance from London Members differently. Is it not extraordinary that a Bill which, we are told, is so essential to the well-being of the people of London has received no support from large numbers of London Members? I would expect them to be here in droves, intervening and saying how antisocial I am.
Jacob Rees-Mogg
Could one put an alternative gloss on the lack of attendance of London Members—that they are embarrassed by this nasty little Bill, and have therefore stayed away, preferring to keep quiet?
Mr Chope
That is the more proper interpretation of the fact that there are no London Members in the Chamber with the exception of my hon. Friends the Members for Finchley and Golders Green and for Harrow East (Bob Blackman). I congratulate the latter on his assiduous attendance in such debates and on receiving the accolade of sponsoring subsequent private Bills on behalf of London local authorities. I understand he will take over from my hon. Friend the Member for Finchley and Golders Green the onerous responsibility of sponsoring London local authority private Bills because the latter has decided that one is enough. With the exception of my two enthusiastic hon. Friends there is a conspicuous absence of London Members in the debate.
Clause 9 is seriously flawed and ill-conceived. In the end, it will result in people who are innocently trying to sell their motor vehicles to get the maximum benefit will find themselves on the wrong side of some officious council officer. They will then find that their vehicle is seized or suffer another penalty. If clause 9 is passed and gets on to the statute book, the real villains of whom we have heard—those who park large numbers of cars on the highway, perhaps with labels in them saying that they are for sale on the internet—will escape scot-free. The innocent bystanders, so to speak, will find themselves suffering penalties as a result.
In practice, if the local authority wants to restrict parking on the highway, it can introduce parking controls—it has the power to do so. Why should not licensed vehicles, as they must be, be parked in a lawful place on the high street or the public highway? Does the fact that they have a label inside saying that they are for sale cause any offence? I suspect it does not—
Mr Chope
The hon. Gentleman says from a sedentary position that it does cause offence. If he thinks so, why does he not get something done about it in his local authority area? Why does he not campaign for a public Bill to deal with that? I find the Opposition spokesman’s support for this partisan legislation quite bizarre. He seems to think that his local authority suffers similar problems to London local authorities, yet he is doing nothing about it at the same time as imposing upon the people of London new burdens and responsibilities. I hope in due course we will hear more from the hon. Gentleman and that he will expand on his views.
Bob Blackman
My hon. Friend will appreciate that the streets of London are relatively congested with parking. One frequent complaint from residents is that the places where they can legitimately park are taken up by people who are running a business by putting their cars for sale on the street, taking up the very parking places that residents could occupy. Does he not accept that that is one of the purposes of the Bill?
Sir Peter Bottomley
I think that my hon. Friend has taken our hon. Friend’s words too precisely. If these are places where residents park, rather than places restricted to residents parking, and if, in effect, it becomes a street market for cars, why should there not be the same regulations as for street markets of stalls? Will he address his mind to that issue? A local authority does not tolerate street markets without local byelaws. The same thing applies to the sale of cars in places where residents park.
Mr Chope
I understand the distinction between the points made by my two hon. Friends. Surely the solution to the problem raised by my hon. Friend the Member for Worthing West (Sir Peter Bottomley) is for the local authority to create a residents’ parking regime on the road that is being used, to the annoyance of local residents, by a lot of vehicles not based in that area.
Even in my constituency, which is semi-rural, people are taking literally the idea that the Government are encouraging them to park and ride. They think that they can park on any piece of highway, even if it causes lots of problems. I have an issue involving a residential school for disabled children where the staff can no longer park on the highway by the school because people commuting to London are parking there earlier in the morning—about 7 o’clock—and teaming up for lifts to places such as Southampton Parkway station. That is creating a problem.
The solution is not, however, for East Dorset district council to promote a private Bill; the solution is for it to use the powers it already has to regulate parking in that area. From my experience as a London borough councillor, I would suggest that where a lot of people are parking in residential streets close to rail termini or underground stations, the solution is for the local authority to introduce a parking restriction between, say, 8 am and 10 am, making it impossible for a commuter to park in that space over the period and leaving it available for longer-term residents or people who wish to use the space for legitimate residential purposes.
If there is a mischief here, it applies not just to parts of London but right across the country, and it can be resolved by local authorities exercising their powers sensibly under the principle of localism without having to introduce heavy-handed private legislation.
Bob Blackman
Is my hon. Friend now advancing the view that in the light of the Localism Act 2011, which the House wisely passed and which gives local authorities a general power of competence, none of the Bill is applicable and every council in London can do all this without reference to the law because it has a general power of competence? Is that his stance?
Mr Chope
My hon. Friend raises an interesting point. Obviously, the Bill started off four or five years ago, long before anybody dreamt that a general power of competence would be given to local authorities under a major Act of Parliament. In the days when I was a local government Minister, central Government was absolutely dead against giving local authorities a general power of competence. Local authorities have won that argument, and now it is open to them, using their imagination, to see to what ends they can use that general power. In my view, though, it is much better to use it to introduce arrangements suited to a particular locality where the people introducing the arrangements will be accountable, at the ballot box, to the electorate, than to introduce proposals in the way that the Bill’s promoters are seeking to do.
Mr Nuttall
On residents’ parking, is it not the case that, whether or not a car is being offered for sale, it will still be taking up space on a road? Whether or not it has a little sign in the back window, all that would happen is that it would be displaced somewhere else; therefore, the problem that our hon. Friends are describing is really one of lack of space in total.
Mr Chope
Either that or there are too many cars—that might be another interpretation. Or, there are too many people—I should perhaps plead guilty to this myself—who aspire to sort out the car that is firing on only two cylinders, but in the meantime they get another car and keep the car that is not working very well, thinking that at some stage it will be useful to them, so they end up with more cars than they really need. The Government are dealing with that problem by increasing car tax well beyond the rate of inflation.
However, I return to the point that if there is a scarcity of on-road parking space, that is for the local authority to deal with. If somebody has a lot of cars on a space, they can remain there provided they are licensed. However, if the local authority introduces a rule saying that a resident can have only one parking permit, for example—I am sure that is the situation in quite a lot of London boroughs, and certainly Lambeth, which I know for these purposes—that means that each resident in a household can have only one car with a residents’ parking permit. Therefore, introducing a residential control zone will sort out the problem of vehicles being sold on the internet for street trading purposes.
Sir Peter Bottomley
In the last 30 minutes I have failed to distinguish whether my hon. Friend, in his clever way, is saying that he is against local authorities having the powers in question or whether he thinks that they should not have them under this Bill. Could he please clear up the confusion?
Mr Chope
I am sorry that there is any confusion, but I am happy to try to clear it up. I am speaking to the proposals in this Bill that local authorities should have the powers, because I am against cluttering up the statute book with unnecessary legislation, particularly that which purports to be necessary to address a particular mischief, when that mischief can be addressed in another way, without using public or private legislation. In answer to my hon. Friend’s point, my objection is to this particular Bill and the way it is being used to try to deal with a mischief that, if there be that mischief, could be dealt with another way, without the use of these draconian powers.
Jacob Rees-Mogg
I think my hon. Friend’s point is one of absolute clarity, justness and truth. It seems to me that clause 10, which applies to Westminster city council, stops people doing something that they cannot do anyway, because as far as I am aware, there is not a yard of parking space in Westminster city council area that is not regulated by the council, either through residents’ parking, a meter, or a single or even double yellow line. Therefore, this is just a ridiculous piece of legislation to introduce a nasty set of penalties, quite unnecessarily, when councils can ensure that there is no problem through their existing powers.
Mr Chope
That is probably one of the most compelling points made in this evening’s debate. My hon. Friend, with his knowledge of the city of Westminster, says that people are not able to do the mischief that clause 10 seeks to address, so what is the point of it? I hope that our hon. Friend the Member for Finchley and Golders Green will be able to get some advice as to why it is necessary at all. Perhaps the problem arises because some residents are a bit snooty and worry that, when visitors come for dinner, they might see a car parked in the street with a sign in it saying that it is for sale and that more information is available on the internet. Perhaps they think that that would lower the tone of the neighbourhood. Even in circumstances in which residents were limited to one parking permit, they could still display such a label inside their vehicle, which could, in the eyes of some people, lower the tone of the neighbourhood. I do not know whether that is the justification for the proposal. We could debate whether it was a sensible reason for introducing this kind of legislation, and for introducing clause 10 in particular, but I do not think that it is sufficient justification.
Amendments have been made to the Bill, and some clauses have been completely cut out of it. That shows that, in its original conception, it was put forward without proper forethought by a lot of rather ambitious officials. No doubt the ratepayers of those local authorities have paid dearly for the services of the parliamentary agents and other advisers involved. As with so many private Bills, however, it would have been better if those people had spent more time thinking about what they really wanted to put into it and about whether it was really necessary, before launching it for our consideration in the House.
Bob Blackman
Some vehicles that are being sold on the street have signs in their window saying that they are for sale at a given price, and that is quite clear. One of the problems associated with selling motor vehicles on the street, however, is that some unscrupulous individuals do not put such signs into the windows of the cars; they merely advertise them for sale on the internet. So the priggish neighbour who worries about what their visitors will think when they come round for dinner could be faced with a whole street filled with cars that are being sold on the internet by a business, rather than being labelled as for sale for everyone to see.
Mr Chope
I understand the scenario that my hon. Friend is describing, but could not that problem be resolved by introducing a residents’ parking regime, such as the one that already exists in Westminster, under which no resident may have more than one parking permit? That mischief would not exist under such a regime.
Sir Peter Bottomley
I hesitate to suggest a practical answer to the problem, but there are plenty of people living in Westminster who like to park on the single yellow lines after 6.30 and at weekends, and it is also possible for their friends and family members to do so. If they were to discover that some business was taking up all that parking space, and not paying rates as most conventional sellers of cars do, they would want that problem to be solved. When my hon. Friend the Member for Christchurch (Mr Chope) was a distinguished local councillor in London, he and his council occasionally used the kind of legislation that is being proposed here to the great advantage of his local residents, and I suspect that those who are promoting this Bill would like it to allow them to do the same.
Mr Chope
I am grateful to my hon. Friend for the latter part of his intervention. I like to think that, when I was the leader of Wandsworth council, we did not waste a lot of money on promoting private Bills to try to oppress our residents. Our policy was very much the reverse of that. If Westminster can deal with this problem, I do not see why other councils cannot do so. My hon. Friend talks about there being a problem after hours, but what would happen to the cars during the day? Would they suddenly appear after hours?
Jacob Rees-Mogg
My hon. Friend the Member for Worthing West (Sir Peter Bottomley) has conjured up a marvellous picture of some incredibly efficient businesses that race along and park their cars on the single yellow lines at 6.30 every evening and race them off again at 8.30 every morning. Whither they would go, heaven only knows. That would hardly be practical, and it would not represent a real risk to residents.
Mr Chope
That is absolutely right.
It is sometimes difficult to give personal examples, but I shall give the House an example involving my daughter. Last autumn, she was in the market for her first car, and she saw one advertised on the internet, on Auto Trader. I went with her—apparently, my cheque book was needed—to view this vehicle and we went to what appeared to be a private house, although I suspect it was being used for a business.
The vehicle was parked on the street outside. It was a car advertised on the internet, parked on a residential road and, as far as I could make out, it was not causing any problems. If this had taken place inside the London area, the person trying to sell that car would have been found guilty of street trading under the terms of the provisions. For the life of me, I cannot see what was wrong with advertising that car on the Auto Trader site or with a potential purchaser looking at it, doing a test drive and visiting the residential premises where the person selling it was based. I simply do not see the problem, and by going on that sort of website, one can arguably get much better value for money. I shall not spoil my own story—or perhaps I will—by saying that we did not purchase this particular car because I found out that it had been clocked by 100,000 miles—but that is a separate story, and this Bill does not go into dealing with that. Perhaps it is a cautionary tale for people who try to buy cars in such circumstances.
I think I have exhausted my concerns about clause 9. It is an over-the-top reaction, and clause 10 has the same problems in relation to the city of Westminster. I know that other hon. Friends want to contribute to the debate, so I shall not repeat further points made by my hon. Friend the Member for North East Somerset. However, his arguments for removing clauses 18 and 19, which are of general application and are wholly inimical to the principles of liberty, are very strong, so I heartily endorse them.
If it is not already clear, let me say that I have grave concerns about most of the clauses we are debating this evening, and particularly about clause 9. I hope that in due course we will have the opportunity to test the will of the House on that clause.
Mike Freer
I shall deal with a couple of points before talking about the amendments. Let me try to lay to rest this issue about the variance of laws across the UK and how people visiting London are suddenly going to be terribly confused—as if people living outside London lack the competence to understand that laws change.
I am disappointed that my hon. Friend the Member for Shipley (Philip Davies) is not in his place this evening, as I took the opportunity to look at some of the vagaries of local laws in his local authority of Bradford. If I were minded to take a petrol-fuelled model plane into a local park there, I would be prohibited from doing so, and I am sure that the people of London who also wished to do so would be confused if they took their plane up the M1. If I chose to fly my kite dangerously, although it is not made clear what is dangerous and what is safe kite flying, that would also be prohibited. If I were innocently to strum a guitar in a public park, I would be intercepted by what my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) would no doubt call a peak-capped local government official who would immediately throw me out of the park.
Jacob Rees-Mogg
If people are strumming a guitar, they ought to be arrested.
Mike Freer
As ever, I am grateful for my hon. Friend’s perspicacity. There has always been a variance in local authority legislation in the United Kingdom, and, in fact, that represents localism at its best.
I may be wrong, and I hope that the House will forgive me if I am, but my understanding of the “power of competence” is that councils would be allowed to do only what an individual can do. Given that individuals do not have the power to regulate street trading, and, however attractive the prospect of ridding ourselves of a tortuous experience may seem, that sadly would not work in this instance. I also take the point that bad legislation is being promoted because constant amendments are being proposed, but even Government legislation is subject to amendment and redrafting. We accept that as part of the process.
Bob Blackman
My hon. Friend is beginning to expose one of the problems that the Bill seeks to resolve. When CPZs are put into residential streets in London, up to 80% of parking bays are often removed because of legislation that specifies the space in which parking is permitted, and residents are charged a premium to park in their own streets. The Bill’s opponents would like that to be imposed on the whole of London, rather than favouring sensible regulation to control on-street trading.
Mike Freer
My hon. Friend has made a good point. Those of us who have had to implement widespread CPZs in our boroughs know that wherever there is a crossover edging must be allowed on either side, and wherever there is a junction there must be regulation on yellow lines and on signage. CPZs are not only increasing street clutter but, as my hon. Friend has pointed out, reducing the amount of parking, which is already at a premium in London.
Like my hon. Friend the Member for North East Somerset, I take the libertarian view that regulation of, and taxes on, legitimate businesses are excessive, and I should like to do everything possible to ensure that that burden is reduced. But until the Government bring forward a true bonfire of regulation and a true reduction in business taxes, and until we can achieve the utopia for which we strive, we have to live in the real world and deal with a pressing problem that is affecting London residents.
Mr Chope
Does my hon. Friend accept that the vehicles to which he refers have to be taxed if they are parked on the public highway? They cannot just have trade plates, as those of an ordinary motor dealer can. Untaxed vehicles have to be kept off the highway and therefore, by definition, all the cars on the highway are entitled to be there as taxed vehicles.
Mike Freer
My hon. Friend is right, in that it is a legitimate use of the highway if a car is taxed and insured. However, it is not legitimate for an unscrupulous trader to exploit the loophole of the internet to take up acres of our public highway. If Mrs Smith is trying to sell her own car outside her own house, that is legitimate. But it is stretching the point to say that because vehicles are taxed and insured, someone should be able to park 12 or 20 cars—as I have seen in my borough—without any regulation.
I turn now to the vexed issue of hot dog trolleys. When I was elected, I was looking forward to dealing with great matters of state, and hot dog trolleys are certainly high up on my list. Amendments P1, P2 and P40 relate to this issue. If any Member who opposes this Bill would like to join me on an evening out in Westminster to see the activities of these hot dog sellers, I would be more than happy to arrange such an evening perambulation with colleagues from Westminster council. It would not be around the high spots of the west end, sniffing the fabulous aroma of onions: it would be witnessing the trucks rolling up and offloading these flimsy wooden trolleys, with a bit of metal, a hotplate and a gas bottle, on to the public highway and pavements. These are not some ancient tradition of Britain—people being able to sell food on the pavement—but a dangerous practice. Let alone the public safety issues, behind those who are unloading these trolleys is organised crime.
To my knowledge, no one has requested that a single seized trolley be returned, but Westminster council is forced to store them for a period of time and then dispose of them. That is an unfair cost on the good council tax payers of Westminster. No one has gone to the magistrates court and said, “I’d like my trolley back.” Even under these provisions, the owner of a seized hot dog trolley, if so minded, could seek to have it returned, but I doubt that it will ever happen.
Mr Chope
My hon. Friend suggests that this trade is related to organised crime. If so, the police commissioner in London should be getting to grips with the issue, instead of relying on piecemeal private legislation such as we are discussing. Why do not the Mayor of London and the police commissioner get to grips with this aspect of organised crime in London?
Mike Freer
I have no doubt that the police commissioner is trying to deal with the gangs behind this activity. Members will know that in organised crime as soon as one captain is removed another steps forward. It is an ongoing battle. The battle takes many forms, not least through the police dealing with the crimes, but also through dealing with the symptoms on the streets of London. That is why I do not seek to trivialise the issue and make it just about the aroma of onions, although I am sure that that may weigh heavily for some of the good residents of Westminster. This is about public health and public safety, about the cost to the taxpayer and about dealing with a criminal activity that needs to be dealt with at all ends. I therefore hope that the House will support my amendments.
Mr Nuttall
I start by thanking my hon. Friend the Member for Finchley and Golders Green (Mike Freer) for his great patience and unfailing courtesy in facilitating the progress of this Bill, albeit progress at a speed that must appear to many people to be that of a particularly sluggish glacier.
Mr Peter Bone (Wellingborough) (Con)
Is this not what Parliament should be doing, including with Government business, too? Should we not be properly scrutinising things?
Mr Nuttall
I entirely agree. The quality of the legislation that passes through this House would be enormously improved if it was subjected to the sort of Report stage that this Bill is enjoying, when we have the time to examine each clause and, to be fair, the promoters listen to the argument and, where necessary, make amendments, accepting amendments that they find agreeable in this place rather than in the other place. Such amendments improve the quality of the legislation, so I am grateful to my hon. Friend the Member for Finchley and Golders Green for his patience in this matter.
I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on his comprehensive and detailed analysis of the merits of the various amendments in this third debate. He built on and developed the excellent critique offered by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who continued where he left off on 25 January, with his customary erudite evaluation and critical assessment of street trading. It is a matter of regret that on this occasion we are not able to hear from my hon. Friend the Member for Shipley (Philip Davies), who always speaks with such common sense on these matters. We hope that even in his absence our deliberations will not leave any stone unturned.
I agreed with all the points made by my hon. Friends the Members for Christchurch and for North East Somerset, but one or two further areas of concern and perhaps unease need additional examination this evening. As you will have seen, Madam Deputy Speaker, this group is very large, comprising no fewer than 53 amendments, and my hon. Friend the Member for North East Somerset managed to deal with each one in slightly more than a minute, and my hon. Friend the Member for Christchurch dealt with each of them in less than one minute. I shall try to be as quick.
The lead amendment relates to clause 9. My concern is not primarily on my own account. My principal concern is that the provisions may have an effect on my constituents living in Bury, Ramsbottom and Tottington. When many people hear the word “London”, particularly those living outside the capital, they concentrate their minds on the centre of London, where the principal tourist attractions are located. Of course it is much more than that; it is home to millions of people.
Jacob Rees-Mogg
I am extraordinarily grateful to my hon. Friend for giving way; he is most generous. I am concerned about who would decide whether it was a trade. Would it simply be a council flunkey or would there be any form of appeal to protect an individual who was not really trading but might be accused of trading?
Mr Nuttall
My hon. Friend makes a very interesting point. As we shall see in some of the later provisions—if time permits—the Bill seems to be trying to establish local authorities as judge and jury in their own case.
Mr Bone
I am grateful to my hon. Friend for giving way. I realise that he is going through his speech rapidly so that we have a chance to get to Third Reading this evening, but I wish he would slow down a little and think about the point in a bit more detail. Surely, there is only one institution that decides whether a person is trading—Her Majesty’s Revenue and Customs.
Mr Nuttall
Her Majesty’s Revenue and Customs may well have reached a conclusion about the activities of an individual who is engaged in what might in another sphere be called hobby trading, in the way that many people engage in what is known as hobby farming by keeping a few hens, a couple of sheep or some cattle. But someone who sells two or three vehicles a year, having repaired them as a hobby, would probably not be regarded and ought not to be regarded as being engaged in a business.
Jacob Rees-Mogg
The position from HMRC’s point of view is interesting and important. Motor cars are exempt from capital gains tax. Therefore, if somebody was selling just one, it would not be subject to a profits tax and would be exempt from capital gains tax, so it is quite a good thing to do from a tax point of view.
Mr Nuttall
My hon. Friend makes a good point. If the Revenue decided to investigate such matters and concluded that the profits were taxable, there would be the difficulty of ascertaining what was taxable profit, because much of the cost would be for materials expended on the vehicle. In any event, unless it was the type of vehicle that my hon. Friend mentioned in his speech—an Aston Martin or a Ferrari—I suspect that the “profit” would be less than the annual personal allowance for capital gains tax purposes, which would probably mean that although it ought to be properly disclosed to the Revenue, no tax was payable.
Mr Bone
My hon. Friend is talking about a new subject which has not been discussed tonight. I am glad we are exploring something new, but is it not the case that whether or not the person in the example pays tax, he will be regarded as trading? It is the Revenue that will make that decision.
Mr Nuttall
Even if that were the case and Her Majesty’s Revenue and Customs decided that trading had taken place, it might well be too late. HMRC may not consider the matter until some time after the event. It could be as much as 10 months after the end of the tax year before that taxpayer was required to file an income tax return. The local authority official would be trying to make up their own mind on a fairly random basis, which might differ from borough to borough, whether trading had taken place.
I shall touch briefly on another way in which the Bill would impinge on traders at the other end of the scale who take the plunge and open their own large or medium-sized lot, selling cars as a genuine business. They are quite open about it and have established their business with a trade name, they advertise in the newspaper and they have all their cars together on a car lot. It is often the case with such businesses that from time to time their stock overflows the land that they have, and they must temporarily resort to placing vehicles outside their premises—on the street, perhaps. They would be caught by the provision, even though for the rest of the time they were good, law-abiding citizens. It is very much a case of the law of unintended consequences when we pass such legislation, because the regulations might catch people who were perhaps not at the forefront of our minds when we considered these clauses.
Mr Chope
My hon. Friend makes a good point. Clause 9 states that the provisions should include any vehicle that is
“kept on a street during the period when it is so exposed or offered for sale”.
He is basically saying that that should be changed to being throughout the period when it is so exposed or offered to sale, because a short period could still make the owner vulnerable to being charged with an offence.
Mr Nuttall
My hon. Friend makes a good point. It again comes down to the precise wording of clause 9, and I think that that change would be beneficial and would clarify the danger I have identified. Amendment 24, which I will move on to later, might well deal with the matter.
Jacob Rees-Mogg
It occurs to me that a trader could be caught out by accident simply if someone took a car for a test drive and stopped by the side of the road. Suddenly, hey presto, the car would appear to be on the side of the road at the same time as being offered for sale on the internet and so could then be confiscated. That would be absolutely terrible.
Mr Nuttall
I am grateful to my hon. Friend for that intervention. There is a risk that an over-zealous tatterdemalion—I have finally used the word—who was keen to impress his local authority superiors might be driving down that road and could photograph the vehicle and take action under this provision, should it pass into law.
The other, more fundamental, point about the clause is that it might prevent young entrepreneurs from setting out to make a living. I see car salesmen not as street traders but as entrepreneurs. One of the reasons I came into politics was that I wanted to encourage people to become entrepreneurs, to believe in the free market and to sell their goods and be buyers and sellers. We do not want a situation in which local government sticks its nose into every aspect of people’s lives.
Mr Bone
We now get to the nub of the matter. What we are seeing tonight is regulation being brought in for apparently good reasons, but that is what happens all the time. Parliament continually brings in regulation, but then we say that there is too much of it. We should be looking at entrepreneurs and saying that what they are doing is right, not adding regulation. That is what is wrong.
Mr Nuttall
My hon. Friend is absolutely right. One of the dangers of these provisions, and one of the ills that the amendments seek to address, is that they send out a very negative message about entrepreneurship. It sends out the message that if someone tries to use their initiative and start off in the motor trade we will jump on them, try to put an end to it and stop them starting out in life.
Sir Peter Bottomley
Regrettably, I suspect that our hon. Friend the Member for Wellingborough (Mr Bone) has misled our hon. Friend the Member for Bury North (Mr Nuttall).
Sir Peter Bottomley
Unintentionally. If the entrepreneur were selling soap from a stall with four wheels on the public highway, with or without the use of the internet, that would normally be caught by local government regulations. The fact is that selling a car with four wheels on the highway, using the internet, is not the same as selling soap. One can either ignore the fact that the internet has been developed since previous local authority powers over selling cars on the highway were introduced, or say that the internet needs to be taken into account. If a local authority is saying, “We would like to have the same power to deal with trading on the public highway using the internet for advertising as we have for trading using the local newspaper,” I am not absolutely certain that a single sentence of the speech of my hon. Friend the Member for Bury North is directed at what the power in clause 9, or clause 10, are aiming to do.
Mr Nuttall
I see where my hon. Friend is coming from, but clause 9 does send out a message, because I do not see such people as street traders. They may well have just one vehicle to sell, and they have to put it somewhere, but, as we have seen from the case to which I referred earlier, there is a danger that it would be caught by the clause.
I also draw the attention of the House to another problem that I have identified with the clause. The clause is headed, “Street trading: vehicles and the internet” and deals specifically and only with
“exposed or offered for sale on the internet”,
in subsection (2). It does not deal with the many other ways in which a vehicle might be offered for sale in the modern world without actually being said to be “on the internet”. Perhaps the biggest example is when a company has an intranet. An intranet is by all definitions, as far I have been able to check in my research, not regarded—
Mike Freer
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Mr Chope
Everybody seems to be rather reluctant to engage in this Third Reading debate—admittedly, we probably have only two minutes for it. By the time we are able to debate Third Reading properly, I hope that the promoters will have ensured that the Bill is reprinted, because a large number of amendments have been made to the Bill in this House.
Mr Chope
I think that may well be so. Indeed, I am grateful to my hon. Friend for that intervention, because in the course of this Bill’s progress the promoters have accepted a lot of the ideas and criticism put forward by me and my parliamentary colleagues. That vindicates the whole process of giving such Bills detailed scrutiny.
Sir Peter Bottomley
There is a distinction between vindication and the reason for something happening, is there not?
Sir Peter Bottomley
At the risk of repeating myself, there is a distinction between vindication and the result of certain people’s activities.
Mr Chope
I do not understand that, because what happened was that the wisdom of a lot of the amendments that we tabled immediately commended itself to the promoters of the Bill. That is why we have just agreed to a group of amendments that will make the Bill much better than it would have been. Fortunately, some of the most pernicious parts of the Bill were taken out in Committee. Therefore, the Bill that we will be considering when we resume our Third Reading debate will be very different from the Bill that was presented to this House after it had gone through the other place.
Sir Peter Bottomley
On a point of order, Madam Deputy Speaker. There are times in Committee when an amendment has been discussed at length and then the Chair can decide that there has been sufficient debate on the issues and the question is put. Would it be acceptable to move that the question now be put that the Bill be read a third time, on the grounds that during the discussions on the various amendments we have had sufficient discussion of the purpose of the Bill, and if so, may I move that the question now be put?
Madam Deputy Speaker (Dawn Primarolo)
No. It would not be proper, and no, the Question cannot be put, as a second point of order.
Mr Chope
That was an unnecessarily impertinent and provocative intervention by my hon. Friend.
As we were deprived of a speech from the Minister on the last group of amendments on Report and because the Government abstained from the vote on clause 9, everybody is gagging to hear from the Minister what the Government’s approach is to the full contents of the Bill, now that it has been amended. When we reflect on what has happened this evening, we will inevitably regret that we did not hear from the Minister, who has been sitting in his place for the best part of three hours and who, from my recollection, has not uttered a word.
Mr Bone
One of the advantages in the House is that after Report, Members such as me who did not have a chance to speak have a chance to speak on Third Reading. There are so many more Members who are now interested in the Bill that I am sure they will turn up when we next debate the Bill on Third Reading.
Mr Chope
Again, my hon. Friend makes a good point. I hope that he will be able to make a significant contribution to the Third Reading of this Bill.
I give notice that although the Bill is significantly amended compared with what it was at the outset, in my view it still contains a lot that is pernicious and detrimental to the freedom of the citizens of this country. Visitors to London will be taken by surprise when they find themselves on the wrong side of the law. One of the Bill’s biggest problems is that it legislates partially for a particular area of the country. If there is a mischief, that mischief applies across the whole of the country and should be dealt with in a public Bill, if necessary on the basis of enabling legislation so that local authorities could opt in—
Business without Debate
(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hon. Members
Object.
Business of the House (Private Members’ Bills)
Motion made,
That Private Members’ Bills shall have precedence over Government business on 6 and 13 July, 7 and 14 September, 19 and 26 October and 2, 9 and 30 November 2012 and 18 and 25 January, 1 February and 1 March 2013.—(Greg Hands.)
Pension Industry
(12 years, 9 months ago)
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David Mowat (Warrington South) (Con)
I am delighted to have this opportunity to raise a number of emerging cost structure issues within the UK pension market. This is an area in which I continue to receive a high number of representations from constituents, and the recent debate over public sector pensions has highlighted yet again the vast disparity that continues to exist between public and private sector provision. My view is that we should now stop talking about public sector pensions and ensure that the vast majority of the work force who make up the private sector get a better deal. The prognosis is not good, however, because of the endemic mistrust within the industry. Indeed, a recent National Association of Pension Funds survey found that 48% of the population did not believe that pension provision was a suitable form of investment.
The timing of this debate is important for two reasons. The first is the imminent introduction of auto-enrolment which, for the first time, will introduce many millions of new and relatively unsophisticated consumers into the market. The second is the emerging evidence of a serious market failure in both the investment and annuity provision segments of the industry. That market failure is robbing ordinary families of tens of thousands of pounds and of their chance of a decent retirement.
Before we investigate the causes of the problems, I should like to indentify the three distinct segments of the market. The first involves those in the public sector, about whom we have talked many times in this place. They are well catered for in comparison to others. An illustration of that is the fact that a £10,000 pension taken at the age of 65, would, in the free market, require a pension pot of about £250,000 a year. That is what the private sector is competing with.
The second segment of the industry involves those in the private sector who have made some attempt to provide for themselves, either because they are in a final salary scheme or—more likely, given that nearly all final salary schemes are now closed—a money purchase scheme.
Graham Evans (Weaver Vale) (Con)
I congratulate my hon. Friend on securing this important debate. The strivers in this country who work hard and do the right thing in providing for their own pension in retirement are finding that their private sector final salary pensions disappeared 10 or 15 years ago, and that their endowment policies—remember those, from the 1980s?—are delivering half of what was promised. In the light of that, and of the Equitable Life scandal, does my hon. Friend agree that it is a 21st century scandal that the fund managers in the City are still getting paid and receiving bonuses?
David Mowat
I thank my colleague for that intervention. I was just about to say that the average pension pot for the people in the sector I mentioned is of the order of £35,000 a year. That is enough for a pension of about £1,500 a year.
The third segment of potential pensioners are those for whom no provision whatever has yet been made. The Government are correctly trying to reach them through auto-enrolment. This segment contains the most unsophisticated consumers who need the most protection.
It is right, as the industry says, for people to save more, but when their funds are eroded by unnecessary costs and when annuities provide such poor value, many people in these groups say, “why bother?”. Up to a point, they are right, but this is the tragedy: we must save more, yet the Government have not put in place the environment that is necessary for effective saving. What that means in policy terms is that the Government are inheriting under-pensioned retirees, with all that that means for social security, despite the fact that the Government spend £33 billion a year in pension tax relief. This tax relief that should be subsidising retirement prosperity is, frankly, being siphoned off to fund managers through investment and annuity overcharging. I shall talk first about the fund management industry and then about annuities.
The Financial Services Authority has recently published statistics estimating that 31% of pension pots go in charges or fees. Clearly, the decision on which pension to purchase is, along with buying a house and buying a car, one of biggest decisions in people’s lives, yet they do it from a position of ignorance. The reason why the market does not work is that there is a massive asymmetry of information between providers and buyers and therefore of buyer confidence.
The area is complex, but the whole problem is compounded by an opaque fee structure, which is indicated by the types of charges relating to pensions—entrance charges, platform charges, annual charges, exit charges and, indeed, churn charges. Some of these appear in published overall cost figures and some do not. For example, the churn charge is not included by pension fund managers in the cost structure of what they call the TCR—transitional corresponding relief—ratio of a fund. This can be responsible, according to Money Management, for changing a 31% figure into a staggering 53%. That means that 53% of the money going into pension funds goes in charges. If we examine the average degree of churn in a pension fund, we find a rate of 128%, meaning that every equity in it is churned every seven months. Warren Buffett takes the view that equity should be held for a lot longer than that. Frankly, holding it for something like seven months is simply not right.
John Stevenson (Carlisle) (Con)
Does my hon. Friend agree that this is one reason why the pension industry never really embraced stakeholder pensions, as they would effectively put a cap on the amount the industry could make out of pensions?
David Mowat
I am coming on to stakeholders and to caps. I want to ask the Minister some questions about those issues.
The industry defends itself by saying that active funds are worth paying for, claiming that higher charges are fair enough if better returns are secured, but the reality is that no correlation has ever been published to show a relationship between charges and returns. The consultants Lane Clark and Peacock recently issued a report to demonstrate that. Even if there were such a correlation, the fact that the charging regime is so opaque means that the punters could not get to grips with it in the first place. One of the many consequences is that this industry has failed to consolidate. I looked at a platform provider this morning and found that I could have bought 5,000 funds. There is no reason for that other than the fact that this industry has not been exposed to market forces.
Ian Paisley (North Antrim) (DUP)
Does the hon. Gentleman accept that one problem in the private pension sector is the lack of transparency when someone in public sector employment on a low salary decides to take out a little private pension to help them along? When it comes to the day of reckoning—when people want to cash the pension in—they realise that it prevents them from enjoying the benefits system because it just puts them over the threshold that would have allowed them to receive the benefits to which perhaps other family members or their colleagues are entitled. There should be transparency about what people get from their pension and how it affects them in the welfare system.
David Mowat
I agree. The key word that the hon. Gentleman used in that intervention was “transparency”. If the market is to work, there must be transparency and comparability, but it seems to me that there are people in the industry who do not want the market to work. The market might work better if independent advice were freely available, but in the past the industry has effectively controlled advisers by treating them as paid intermediaries with a commission structure that compromised their independence, and between 2002 and 2007 its payments to such intermediaries for their advice rose by 50%. Hopefully the RDR—the retail distribution review will deal with the problem, and I give the Government credit for that.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on raising this matter tonight. My hon. Friend the Member for North Antrim (Ian Paisley) mentioned people who have taken out small pensions and who also fall into a tax bracket. Does the hon. Gentleman agree that their position should also be reviewed by the Government?
David Mowat
I shall be making a number of suggestions to the Minister later, and I certainly agree with what the hon. Gentleman has said.
I also give the Government—in fact, the last Government —credit for setting up the National Employment Savings Trust, without which auto-enrolment would be entirely untenable. Given its low charges and what appears to be a sensible investment policy, the organisation has an important contribution to make. However, as I shall make clear later, I think that the Government could be more radical about what NEST can achieve.
Let me summarise the position by saying that the fund management part of the industry has evolved into a mess. The market has failed owing to asymmetry of information and lack of transparency, and we are about to impose auto-enrolment on top of that mess. The £35 billion of tax subsidy that is currently provided will increase, and will be supplemented by employer and employee contributions which will also run into the billions. Those cash flows ought to be finding their way into better pensions rather than into the Chelsea property market.
I ask the Minister to assure us that before any of this happens, he will take the following steps. First, there should be a template for charge structures that will facilitate transparency, comparability and reporting. An analogous debate is taking place in the Department of Energy and Climate Change about energy suppliers, who are being required to introduce tariffs that allow comparison. Exactly the same should happen in this industry: indeed, it is more important for it to happen in this industry than in energy.
Secondly, there should be a charges cap on any supplier who becomes involved in auto-enrolment. I was staggered to read in a written answer that the Minister did not consider that necessary. A 1% cap was applied to stakeholder pensions, and the same should apply in this case.
Thirdly, some of the restrictions on NEST should be removed. The philosophical basis of the contribution limit of £4,400 and the restrictions on transfers in and out was that the purpose of NEST was not to compete with the market, but to operate in the parts of the market in which organisations do not wish to operate. That is an inadequate approach, and I think that the Government should be more proactive. Finally, the Government must ensure that there is no further slippage in the introduction of the RDR. Unbiased investment advice is sorely needed, and needed soon.
I fear that unless those measures are adopted, auto-enrolment will compound a failure that could easily become our next mis-selling scandal.
Let me now say something about annuities. It is possible for people to take their pension pots and then purchase annuities that will support them for the rest of their lives. However, the background is already tough—quantitative easing and life expectancy have driven down annuity rates—and the solvency II requirements may make the position even worse. It is clearly critical that the public obtain the best value possible. This means shopping around, but that is exactly what the big players in the industry do not want to happen. They want to stop it because it is their belief that they “own” that customer relationship, and they want to turn that ownership into more profit using two techniques. The first is the attempt to make the transition from savings into annuity seamless. That means putting an application form in with the final pension statements along with their own quotes. This, combined with a relationship sometimes developed over decades, is often enough to trap retirees into unsuitable and inadequate products. The second technique is using the asymmetry of information that we have seen in other areas to ensure that the retiree would need a maths qualification and a lot of intellectual self-confidence to sort out a better deal.
I have mentioned complexity, and I found the following sorts of annuities on the web—enhanced, fixed, guaranteed, immediate needs, impaired, income, index-linked, joint life, lifetime, lump sum, protected rights, purchase life, single life, variable life, with profits and smokers. For the average punter to work out intelligently what is best for him and his family using that lot is very tough indeed. The fundamental business objective is simple, but that is not how the market has evolved. The consequence has been mis-selling on an epic scale. A recent report from the CASS business school mentioned an existing provider offering £3,600 for an annuity pot and then a subsequent provider offering £26,000. That may be an outlier, but the facts are that 90% of retirees buy pensions from their existing fund manager and a very high number of those get below what the open market would offer. This matters to the Government—or it should do—because those massive profits siphoned off by the industry are resulting in hardship and an increased reliance on state benefits.
What should we do? I have five suggestions for the Minister. First, the Government should consider setting up an equivalent of NEST, specialising in the low cost provision of annuities. The IT and business process challenges around annuity provision are easier, as the cash does not need to be collected. At a stroke, the Government could provide an organisation that was a hallmark for fairness and best practice. Lord Myners has suggested that the Government allow people to purchase Treasury bonds direct, which would fit in with my proposal.
Secondly, the Government should consider making it illegal for the organisation that administers the saving regime to also provide an annuity. The advantage of this is that it keeps the Government out altogether while helping to make the market work. At a stroke, we would get new entrants to the market who are likely to be smaller, hungrier and more efficient. There are many precedents for this in the private sector. I used to work in the IT industry and it was not uncommon for those who designed an application to be forbidden to bid for implementation, because the procurement people wanted to ensure that the relationship advantage that had developed did not affect the pricing for the final step.
Thirdly, if the Government continue the existing system, in which providers attempt this seamless transition, there should be a rule that an annuity provided should be signed off by an independent financial adviser. That is a simple step and would ensure that the lethal combination of asymmetry of information and “relationship abuse” do not combine to rip off the retiree.
The fourth measure is a similar regime for annuities as I have suggested for charges for investment funds. We should insist on a few, relatively simple categories, and that would force transparency and comparability, also forcing the market to work properly. I believe in the market, but in this industry it has not worked. The industry will say that standardisation will limit choice, but they would say that, wouldn’t they? This is a simple transaction that needs to be made easier.
Finally, the Government should implement a system in which retirees approaching the annuity purchase point are much better informed about their options. They should be able to go to the open market and it should be forbidden for application forms to be put in with the actual pension round-up statement. The National Association of Pension Funds has a number of sensible measures in this regard, but I am of the view that that fifth one, on its own, is not enough.
In summary, it is vital that our people in our country save more than they are saving at the moment, but we do not wish to continue saving if the tax relief on that is channelled off for the property market in Chelsea and does not go to the savers themselves. Ordinary families continue to be penalised by an industry that has made supranormal profits by creating and exploiting a market failure, and the Government need to address that. If the Minister allows auto-enrolment to go ahead without reform, we are setting the scene for the next mis-selling scandal. I understand that it is tough for him to resist the lobbyists, who will be all over him on this, but self-regulation is not enough and the time to act is now.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I congratulate my hon. Friend the Member for Warrington South (David Mowat) on securing this important debate. He made some thoughtful comments about an issue that affects a large number of not only his constituents, but those of all hon. Members. He has raised issues that are central in tackling the challenges of increasing longevity and an ageing society, and are crucial to the success of our strategy to increase pensions savings. He has raised many issues and we have taken careful note of what he has said tonight. I will try to address as many of them as I can in the time available to me, but we will also be very open to an ongoing dialogue with him about his concerns.
My hon. Friend rightly says that automatic enrolment in workplace pensions begins this year, and it represents a once-in-a-generation opportunity to transform our savings culture. Millions of new savers will enter the pensions market, and that market will have to evolve to accommodate them with a new generation of pensions products that will come into being. There are already signs that competition in the industry is strong, is driving higher standards and, importantly, is keeping downward pressure on charges. That is welcome but, as he rightly says, it is essential that the Government ensure that all schemes, particularly those that target unengaged and financially unsophisticated savers, are fit for purpose. As he rightly set out, that is especially important when it comes to charges, costs and annuities.
On the costs and charges, individuals who perceive their charges to be excessively high or unfair will be less inclined to save. For those who do save, as my hon. Friend has highlighted, even relatively small differences in charge levels can have a dramatic effect on retirement income. So excessive charges cannot be allowed to become an obstacle to achieving the levels of pension saving that individuals, and we collectively as a nation, need in order to ensure security and dignity in retirement for future generations of pensioners. We as a nation invest about £33 billion a year in the pensions industry, but we really do need individuals to be putting aside money for their retirement as well.
We should acknowledge the positive impact of NEST. Evidence presented last month to the Select Committee on Work and Pensions recognised that NEST is helping to lead best practice in promoting high standards of governance, responsible investment and effective communications. My hon. Friend is right to say that low charges are important. They matter most for the many people newly enrolled into pension savings. Encouragingly, departmental research suggests that charges for default funds are already unlikely to be excessive, with the average annual management charge in default funds between 0.4% and 0.6%. That is a really important element in what is happening, but he is right to express concern about charging and its impact.
The truth is that pensions charges have been decreasing for several years. The introduction of stakeholder pensions, with their 1% charge cap, continued a trend away from the high initial costs of personal pensions in the 1980s and 1990s. Today, a 1% charge is perceived as more of a maximum than a benchmark for basic schemes, and the pensions market is responding rapidly to the challenges of automatic enrolment and the presence of NEST. New schemes, such as NOW: Pensions, with its £18 administration charge and 0.3% annual management charge, and B&CE’s proposed scheme with a basic 0.5% AMC, show that automatic enrolment and NEST are helping to continue downward pressure on charges and maintaining price competition.
We understand that automatic enrolment means that many more individuals who are not engaged with saving or who might be daunted by pensions information will be enrolled, so we need to ensure that providers are properly disciplined by the market and consumers can hold them to account.
The Pensions Act 2011 extended the Government’s powers to set a cap on pensions charges and there are certainly arguments to say that charge capping is the right approach, but it is easier said than done. Should we decide to introduce a cap, we must identify an appropriate level and consider different charging structures in a way that compares them and ensures that there is no room for non-compliance. Those are all issues of some complexity; it is not a straightforward exercise in which we simply say that there will be a one-size-fits-all cap. I can assure hon. Members, however, that the Government will not hesitate to deploy a charge cap if it proves necessary to ensure that individuals’ pensions saving are not at risk from excessive charging.
To help build public confidence in saving, we must also help people to understand how much they are paying for their pensions, by which I mean both the employer who is choosing a workplace scheme for his or her employees and the scheme members themselves. There is still a long way to go in opening up real transparency about how much a member pays and for what and about how their pension is managed. Transparency, as my hon. Friend rightly says, is of fundamental importance.
My hon. Friend raises the question of whether the contribution and transfer restrictions put in place to focus NEST on its target market should remain. That question is being looked into by the Select Committee’s current inquiry. There are arguments both ways, but I assure my hon. Friend that the Government will be considering the Select Committee’s evidence and recommendations very carefully when it reports next month.
In the time I have left, I shall touch on the question of annuities because, as my hon. Friend rightly says, they are at the heart of the debate about how we will make good provision through private schemes. For the majority of people, annuitisation is still the most effective way to provide an income in retirement, but as he points out annuity rates have been falling for several reasons. Increased longevity and people spending longer in retirement are significant issues, and there are wider policy areas, such as the state pension age and extending working lives, that mean that we cannot simply see annuitisation in isolation.
I want to focus on two critical points that my hon. Friend has raised: the importance of consumers understanding their options and their shopping around to compare offers when they come to make decisions about annuitisation. On those two points, he has the full support of both the Financial Secretary to the Treasury and the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), who is the Minister responsible for pensions.
That is why the DWP and the Treasury have been working with consumer groups, industry representatives and other Government bodies to bolster the current right to the open market option by developing a default option. The intention is to ensure that consumers are not pushed through the transition from saver to annuitant in such a way that they end up with unsuitable products and to make certain that the consumer does not simply sign an application form without fully exploring their options.
The Association of British Insurers has recently consulted on a new draft code of conduct that sets out new requirements on all its members. As we announced in September, we believe the code is an important step in changing the dynamics in the annuitisation process. The draft proposals are a condition of ABI membership and state that consumers must be directed to the open market option and that packs issued by providers must not include an application form. They also propose a clear three-step customer journey to help consumers with the decision-making process and is a key step in addressing the asymmetry of information. My hon. Friend the Financial Secretary will make an announcement on the work of the open market option review group in the near future, so I hope that my hon. Friend the Member for Warrington South will understand it if I do not go into more detail at this time and that he will be present in the Chamber for that statement when it comes.
These initiatives represent a wholesale improvement across the pensions landscape, but that landscape is ever fluid; we need to make sure that we take advantage of the potential opportunities presented by auto-enrolment. We should therefore consider the role Government can play in determining scale, and ask ourselves whether the high fragmentation of the UK pensions market offers good value, or whether a smaller number of larger schemes could offer lower charges and better governance, to the advantage of members.
My hon. Friend has made a series of points that I regard as a valuable contribution to the debate. We shall read his remarks carefully and think about the implications of his suggestions. I feel confident that the impact of NEST, the downward trend of charge levels across the market and the steps we and the industry are taking to increase transparency all serve to advance member engagement and improve the annuitisation process. They all point to a world where consumers can feel more informed and more secure about how much they are paying and what they receive in return.
I assure all hon. Members who have contributed to the debate that the Government will be watching closely as the pensions landscape, under automatic enrolment, continues to evolve.
Question put and agreed to.
Petitions
Potential Closure of Peacocks Stores
Swindon Town Centre
Bradford-on-Avon Station Ticket Office
Bus Services in Sedgefield
Westminster Hall
(12 years, 9 months ago)
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Rural Bank Closures
(12 years, 9 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
Roger Williams (Brecon and Radnorshire) (LD)
It is a great pleasure to bring this important matter to the attention of the Chamber, and to serve under your chairmanship, Mr Brady. About a year ago, I secured a Westminster Hall debate on a similar matter. Another Treasury Minister responded to that debate, but it is a great pleasure that this Minister is present today to respond to my remarks.
I have secured the debate to reiterate my concerns about the closure of bank branches in rural areas. Although 20% of the population live in rural areas, it has never been more difficult for them to access money and financial services. As hon. Members may recall, I raised this issue nearly a year ago following the closure of Barclays bank in Rhayader in my constituency. That town of nearly 2,000 people was left with a single branch of HSBC bank that ran a reduced service just three days a week. Such a situation made it increasingly difficult for local people and businesses to access their money, and meant that they had either to change their account to HSBC, or travel 14 miles to Builth Wells and the nearest Barclays bank.
Sadly, Brecon and Radnorshire now has a new case study. On 9 March this year—unless the bank has a Damascene conversion as a result of this debate—the branch of HSBC in Presteigne will close. That will leave a community of nearly 2,500 people with just one branch of Lloyds TSB that is open only on Wednesday and Friday and between the limited hours of 9.30 am to 3 pm—a mere 11 hours per week. Furthermore, the branch has no cash machine, and I will return to that point. News of the branch closure met with a huge response from the people of Presteigne, who managed to collect more than 500 signatures in a petition against it. They see the closure as a desperate shame; one resident told me that she has seldom seen the bank empty, and that there is usually a queue.
Let me describe Presteigne in a few words. The editor of Country Life magazine, Clive Aslet, considers it to be one of Britain’s top 10 towns in which to live. It is an active, transition town that engages with environmental issues to an extent rarely seen in other places. It is heading towards a strategy of zero waste; a large allotment area has just opened and proved popular. The voluntary East Radnor day centre brings in elderly people from the countryside to share friendship and a meal together, as well as providing other services. Presteigne’s music festival is internationally renowned and premiers many musical compositions.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
The hon. Gentleman is describing Presteigne, which sounds almost as beautiful and wonderful as north Harrow in my constituency. That area has also lost its last bank branch, which is impacting on businesses. Does he think that it is incumbent on the Government, perhaps through the Minister, to convene a summit of the big banks and demand that where a bank branch is the last in a community, banks must respect the need of that community for it to remain open? To help the Government achieve that objective, does the hon. Gentleman think that it is worth considering a British version of the Community Reinvestment Act, which forces banks to disclose where they lend and to demonstrate that they are performing well in order to maintain their banking licences?
Roger Williams
I believe that the Government have a role to play, and such a summit may be the way forward. We could also support trials of community banks in which a number of different banks come together to provide banking facilities, thereby cutting costs for individual banks but maintaining a facility for the community.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Should we not be a little careful about taking this issue out on the banks that are still in rural areas? We should be going after those banks that were first or second to leave an area, not those that have stuck it for as long as they have.
Roger Williams
My hon. Friend makes a good point, but the responsibility lies with all the banks. They have got to come together a find a way of addressing the problem.
Chris Ruane (Vale of Clwyd) (Lab)
Should the Government be looking at closures over the past 10 years, and at which banks have closed branches and which have not? They could then force banks to get together and create a common policy for bank closure programmes in rural areas. Each bank would take part of the burden so that it would not be left to just one bank.
Roger Williams
There is a theme running through the interventions that I have taken so far. The problem is a responsibility for all the major banks, rather than for a specific bank in a particular town or community, or even in Harrow. Banks should come together and solve the problem.
Presteigne is not only a sleepy country town; it contains a number of innovative businesses such as Mangar International, which manufactures, designs and supplies rehabilitation and assisted living equipment of a sort not found anywhere else in the world. Teledyne Labtech manufactures microwave circuits, and there are a number of other businesses. We were lucky to have attracted those businesses through the Development Board for Rural Wales, and a number of manufacturing facilities sprang up in Presteigne of which we are proud and wish to hold on to. I cannot, however, see us being able to attract that type of development if there is no bank in Presteigne—it is unlikely that businesses will be attracted to areas where banking is not available.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Gentleman on securing this debate; he has made some pertinent points. Last month I had a letter from my bank, HSBC in Y Tymbl. It is closing, so perhaps I should declare an interest. This issue affects valley communities, as well as rural areas. What thought has the hon. Gentleman given to alternative banking models such as credit unions? In Ireland and the USA, for example, those are mainstream institutions, rather than being banking for the poor as they are in Wales at the moment. They also perform an important economic function by lending to small businesses. Could that be part of the solution?
Roger Williams
The hon. Gentleman anticipates a theme that I intended to expand later in my remarks. I value the work done by credit unions, but in the area of Wales with which I am familiar, they do not seem to enlarge and extend their capacity to provide facilities for businesses, or even mortgages, but work only at microfinancial level. The hon. Gentleman makes a good point, and in these extreme circumstances it may be that the mutual model will once again establish itself and become more important in our communities, which I would welcome.
The Presteigne chamber of commerce has a very active chair, Rosamund Black. She fears that the closure of HSBC will cause extreme inconvenience and hardship and seriously damage the structure of the town. She said to me that people use the bank for more than simple financial transactions; the staff provide a vital service in offering advice and helping to solve the banking queries of many residents, particularly the elderly, whom they help with bill payments and other financial transactions.
However, despite the efforts of the community—I pay particular tribute to the mayor of Presteigne, John Kendall, to the Assembly Member for Brecon and Radnorshire, Kirsty Williams, and to the chair of the chamber of commerce—they appear to have been unsuccessful in persuading HSBC to maintain the bank. Indeed, that closure will follow other closures.
Nic Dakin (Scunthorpe) (Lab)
I congratulate the hon. Gentleman on securing this timely debate. The HSBC branch in Kirton in Lindsey, in my constituency, announced recently that it was closing. The situation mirrors exactly what the hon. Gentleman is describing in terms of the role of the bank in the community. It is one of the key pillars of the community. Taking the bank away unsettles the whole community infrastructure in the way he describes, and that is not driven by customer preference. It is driven by the mission of the bank. In the case of the Kirton in Lindsey bank, it means that constituents will have to travel 9 miles to the nearest banking facility, so this is clearly an issue that needs addressing. I congratulate the hon. Gentleman on airing it today.
Roger Williams
The hon. Gentleman makes a very good point, because public transport in rural areas is difficult at the best of times. Requiring people to travel distances of 9 miles or, in an example from my constituency, 14 miles makes it very difficult for people to obtain the advice and support that they need in making financial decisions. There have also been a number of closures by HSBC in Wales. The closures in Llandysul, in Ceredigion, and in Llanrhaeadr-ym-Mochnant in Powys, in the constituency of my hon. Friend the Member for Montgomeryshire (Glyn Davies), have been among six closures in Wales since September. I think that there has been a total of 17 closures across Wales by HSBC since 2009, although I should add that not all of those have been in rural areas.
However, this debate has not been called to highlight cases in my constituency or to single out HSBC. A recent report from the Campaign for Community Banking Services produced a breakdown by region and country of the number of communities dependent on one or two banks, together with a report on the situation for individual banks. The latter revealed the halving of HSBC’s share of one-bank communities in England and Wales to 10% as it continues significantly to reduce its network coverage. Perhaps the case of Presteigne and other closures explain why there is no mention of HSBC’s popular slogan, “The world’s local bank”, in its January 2012 television advertising campaign.
Figures from last year show that since 1990, 44% of all banks, including converted building societies, have been closed. That equates to 7,555 fewer retail banking branches nationwide. That has left the UK with only 190 bank and building society branches per million inhabitants, which is very poor in comparison with the 940 branches per million inhabitants in Spain, 560 per million in Italy and 470 per million in Germany. There is a better geographical spread throughout those countries and they have retained far more locally owned branches. Granted, they generally make modest charges for operating personal as well as business accounts, but at least they have the face-to-face services that so many people still want.
The report of the Independent Commission on Banking, the recommendations of which the Government have pledged to implement in full, stresses the need for a challenger bank and increased competition in high street banking. The German model, for example, provides for excellent competition and a much more community-focused approach. Lowering the barriers to entry and facilitating greater competition could allow for banks specialising in lending to small and medium-sized enterprises, as the Federation of Small Businesses has suggested, for banks that have a more local or community focus or perhaps even for banks that specialise in providing facilities for groups that are normally hard to reach, such as rural communities.
2011 showed no sign of a slowdown in the number of closures. A Campaign for Community Banking Services report that came out earlier this month showed that the number of rural communities with only two banks remaining is 446.
Toby Perkins (Chesterfield) (Lab)
I congratulate the hon. Gentleman on securing the debate. He has been a consistent campaigner on this issue. He is setting out how, since he brought the issue to this Chamber in March 2011, the level of bank closures has continued apace. Is he aware of any improvements on the ground as a result of Government intervention—Government policies—since March 2011, or is the lack of any such improvements the reason for his bringing the issue to the Chamber again?
Roger Williams
I thank the hon. Gentleman for that intervention, but I think that I have made it clear that although I believe that the Government can take a degree of initiative in this field, it is really the responsibility of individual banks or banks as a whole to ensure that they are able to service these vulnerable communities, because they owe a debt of loyalty to them.
Chris Ruane
I thank the hon. Gentleman for giving way to me again. I do not have the exact phrase with me, but does he recall the banker who said, 18 months into the recession, that the time for remorse is over? That banker misjudged the mood of the nation then and, indeed, now. Relying purely on the good will of bankers when that is the feeling from them—the time for remorse is over—is not likely to bring about the change that most of us in this Chamber want.
Roger Williams
In the long run, it is in the banks’ interest to ensure that they provide a comprehensive level of service to the communities that they wish to serve and services that are more accessible and more convenient. I think that it is probably the role of the Government to sit down with the bankers, as was suggested by the hon. Member for Harrow West (Mr Thomas), and set out what should be required of banks. Not all the banks were bailed out with public money as a result of the banking collapse, but all banks have benefited from Government action—quantitative easing, for instance—and just about all banks are dependent or have depended on measures that the Government have brought forward. It is time to sit down and see what can be achieved to help these communities.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this matter to Westminster Hall today. My constituency of Strangford has had two bank closures: the Ulster bank in Portaferry and the Northern bank in Balloo have closed. Two campaigns were fought, but not won. We did, however, win the campaign to save the Northern bank in Kircubbin, with community support. Does the hon. Gentleman agree that the impact of closures on elderly people is horrendous? If there are not banks close at hand, they may carry cash around with them, and many of us will be aware of a large number of people who have been robbed as a result. Banks therefore have a responsibility to elderly people and to rural communities. Perhaps the Government could work together with the banks on that. Perhaps, somewhere along the way, banks need to carry a loss leader, covering their losses in such areas through profits in other areas.
Roger Williams
I thank the hon. Gentleman for that intervention. Yes, I believe that there may be a role there. There is the American model of a shared bank, whereby one facility houses different banks. They share the costs and maintain a presence in the community. That may be a way forward; the Government could help with, or initiate, a pilot scheme of that type. I had intended to suggest that later.
Mr Thomas
I am grateful to the hon. Gentleman for supporting the idea of holding a summit with the banks to discuss branch closures. Does he not think that having such a summit is all the more important given that the Government’s attitude to bank branch closures has arguably become more depressing since his previous debate last March? I ask that because the Financial Secretary to the Treasury, who has direct responsibility for this issue, has said:
“The Government do not intervene in…decisions as to whether, and where, banks maintain branches.”—[Official Report, 26 January 2012; Vol. 539, c. 329W.]
In a recent debate, he also suggested that if the Government intervened to stop bank branch closures, banks would continue to face high costs. Clearly, a more sophisticated Minister is answering this debate, and one hopes that she will have the courage to take a slightly different view. The answers to our questions surely underline the need for a summit so that banks do not think that the Government condone further bank branch closures.
Roger Williams
I thank the hon. Gentleman for that intervention. One reason why I called for the debate is that I am not prepared to allow the closures to go unnoticed. By bringing the issue to the attention of the Government and right hon. and hon. Members, I intend to bring it to the attention of the big four banks, and a number of other banks. These large organisations have a social duty to which they should attend, but it would be useful if the Government could kick things off with an initiative and call for a summit, as the hon. Gentleman said.
When a bank has the last branch in town, it often makes a pledge of some sort to keep it open, but those pledges are often difficult to define; that creates a lot of uncertainty, which can be fuelled by such comments as those made last year by the British Bankers Association. It said:
“Branches will remain open if they are being used. But if the number of customers…coming into the branch falls, then the bank—like any other retail outlet—will need to look carefully at whether it is…viable to keep it open.”
Well, the bank in Presteigne was being used, but a different target was imposed on it, relating to the selling of financial products such as mortgages, pensions and loans. The population of Presteigne is rather stable; it may have made use of those products in the past, but it still expected services from the bank. However, the bank has decided to withdraw from the community.
Nic Dakin
Is it not true that banks are encouraging—indeed, almost forcing—customers to go down the route of internet and telephone banking, often against customers’ wishes? That is having an impact on the footfall in branches such as those that the hon. Gentleman describes. These changes are being driven by the determinations of producers, rather than customers, which is a great shame.
Roger Williams
I thank the hon. Gentleman, who raises an important point. Information provided to me indicates that two thirds of customers between the ages of 25 and 45 will use internet banking facilities, while only a third of people over 65 have the aptitude to take advantage of such opportunities.
Simon Hart
That is one issue, but does my hon. Friend agree that another is whether people have the broadband access in the first place to enable to make use of these things?
Roger Williams
That is another point, and my hon. Friend makes it very powerfully. Perhaps the Minister would like to address that problem, too.
I appreciate the coalition Government’s commitment to keeping open post offices, which provide important outlets for financial products, but banks are still the preferred option for many people, particularly when they need advice and support in difficult times.
I have gone on a bit longer than I anticipated, and I am grateful for hon. Members’ interventions. The Government have a role to play. In the American model of a shared banking outlet, many major banks come together to ensure that their facilities can be provided at one point. The Government could have a role in ensuring that pilots exploiting that approach are set up with their backing. The town of Presteigne would certainly be willing and anxious to take part in such a pilot.
Paul Murphy (Torfaen) (Lab)
I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on bringing this issue to the attention of the House. He has served his constituency with great sincerity for many years. When I was Welsh Secretary, he and I visited many parts of it, and I know he has raised this issue because he feels deeply about it, particularly as far as Presteigne is concerned.
I want to talk about another bank closure. Again, it involves HSBC, but this time it is in my constituency—in Blaenavon, in my valley. Blaenavon, a Welsh mining valley, has the characteristics of a rural area, in the sense that it is geographically isolated, its population is about 5,000 or 6,000, and it is part of the Brecon Beacons national park. It now has only one bank, HSBC, because the others have closed.
The decision to close the bank has caused enormous difficulty and distress among the people of Blaenavon. The town council and I have met the Assembly Member—Lynne Neagle—and bank officials. Hundreds of people attended a public meeting; it is very unusual these days for people to turn up to a public meeting to support banks, but these people did. There has also been a large petition. It therefore means a great deal to the people of Blaenavon that the bank is about to close.
The hon. Gentleman referred to HSBC as the world’s local bank; I was recently attracted by a newspaper headline, “HSBC banks on going deeper into rural areas”, until I discovered that the newspaper concerned was the Shanghai Daily. The article, which was from 2009, said:
“HSBC said…it has opened two more rural banks in China as it seeks to penetrate deeper into the rural financing industry in the country.”
It also said the bank
“is committed to bringing our global rural finance expertise into China’s countryside to help develop a sustainable model of finance and to contribute to the local economy”.
So HSBC is opening banks in China and closing them in Wales and the rest of the United Kingdom.
I understand the point made by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who said that it is perhaps hard to castigate the last bank remaining in a town. Nevertheless, when it has gone, the effect on local communities can be quite devastating because those communities often have lots of older people. In addition, local industry and small and medium-sized businesses rely on the banks. There is also the fact that communities are isolated and that many older people do not have their own transport. In Blaenavon’s case, there is the added issue that the town is a world heritage site, with lots of tourists from across the world coming to visit, but there is no longer a bank. The issue is therefore of great concern.
Today’s debate must concentrate not only on saying that the banks must be much more responsible in looking after rural areas, but on what can be done. The hon. Member for Brecon and Radnorshire made some suggestions, as have my hon. Friends. I want to make one or two points, which I hope the Minister and my hon. Friend the Member for Chesterfield (Toby Perkins), who speaks for the Opposition, will refer to when they wind up.
Clearly, the most important point is that if the bank goes, a cash point should remain, because it is hugely difficult to obtain money in a small town if the cash point disappears. If possible, there should also be some form of deposit facility so that people can deposit their money in a machine.
The issue of internet and telephone banking is also important. As the hon. Member for Brecon and Radnorshire said, however, the number of people over 65 who attempt to use such facilities is small. Clearly, there is a job of work to be done by the banks in trying, when they close, to train or teach their customers to use the telephone and internet banking facilities that many other people use. I pressed HSBC to hold seminars in Blaenavon to show people that.
Simon Hart
I am sorry to intervene so often. Does the right hon. Gentleman agree that we might want cash points that do not charge people to take their own money out—in other words, not LINK cash points, which cost about £2.50 every time someone sticks their card in?
Paul Murphy
Indeed. That is very important; particularly for older people, being charged to take out money is an extra burden.
The Post Office basic bank accounts are useful. People may be able to carry out their transactions through the post office. Credit unions, which were raised earlier, are also important. However, the sharing of facilities between banks needs to be explored. Another intriguing issue is mobile banking. In Ogmore Vale in south Wales, for example, HSBC and, I think, the Royal Bank of Scotland together initiated a mobile banking scheme for the area. It is like a mobile library, and it goes around villages and towns, providing facilities and the opportunity to use the banks.
It strikes me that the Government—both the United Kingdom Government and the Welsh Government—need to be able to come up with imaginative ideas. When it is known that the last bank in a town in a rural area is going to disappear, there should be some sort of action plan. Either the local authority or the Welsh or United Kingdom Government should be able to consider the alternatives for the town, and the possibilities that I have outlined. Often people’s fear is the worst thing. They need reassurance that some sort of facility can be provided in the community, through the exercise of more imagination.
My hon. Friend the Member for Harrow West (Mr Thomas) referred to a summit. That is an important suggestion; the representatives of banks and Government could sit round a table and perhaps come up with ideas for action plans for towns and large villages that are losing their banking facilities.
I congratulate the hon. Member for Brecon and Radnorshire once more on raising the issue, which is hugely important and affects all our constituents, crossing the party political boundaries of the House of Commons. I hope that the Minister will come up with ideas to alleviate the problems of our communities.
Glyn Davies (Montgomeryshire) (Con)
I have been a Member of the House for almost two years now, Mr Brady, and you have chaired a huge proportion of the proceedings in which I have taken part. It has always been a pleasure.
I, too, congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing today’s debate. He represents a neighbouring constituency to mine, and they are two of the most rural in Britain. One reason I did not prepare a speech for today was that I knew that I would only be repetitive. I could have filched the hon. Gentleman’s speech, and said pretty much the same, because our experiences are so similar. However, I want briefly to associate myself with the issue that he has raised, and with his remarks. All that I need to change is his references to Presteigne—although I represented it for eight years as a regional member in the National Assembly for Wales, so I know the town well. The point is that very few changes would need to be made in the speech to make it apply to my constituency and, I am sure, rural constituencies across Britain.
The hon. Member for Brecon and Radnorshire and I have worked together for many years on the issues in question, on the Development Board for Rural Wales, and in other contexts. Nearly all that work would come under the general heading of the defence and promotion of rural services. The way in which society has moved in the past half century has put enormous pressure on rural services, and that is a huge threat. Protecting and retaining those services has been incredibly difficult, and we shall not be able to retain and protect them all. However, that work has been a big part of my life, and of the hon. Gentleman’s life.
One of the reasons I have become so engaged with the issue in question is that I decided as a young man that I enjoyed living in the middle of Montgomeryshire and would never live anywhere else. I deeply love the place. All my fellow students from Llanfair Caereinion high school left the area to find work—we did not have any—and even at a young age I became very engaged in seeking to retain and develop our economy, as the key to providing employment that would encourage people to stay. There has been huge pressure across rural services, and the banks issue must be considered within that whole bracket. Rural schools close, because as families have fewer children there is pressure on them, and many village schools are closing. That is still happening and will continue; but what we do will affect the rate of closure. The same is happening with hospital services. Increased specialisation in skills and treatments means it is not possible to retain all rural hospitals. Some of them are closing, and, even more importantly, some of the services available in them are moving away. Transport is another serious issue, because of the acquisition of cars. There is not the same level of rural public transport that there used to be. I do not mean any criticism of the Welsh Government, but the grant for rural transport has been substantially reduced this year. The retention of transport links is strongly connected to the retention of banks; significant reductions are being made, with the result that services will be reduced.
Financial services are a key part of life today, whether those are provided by banks, building societies or post offices. People in rural areas, and perhaps in particular the elderly and the most vulnerable, who are not familiar with the internet or sometimes do not have access to it—because clearly broadband is not as effective in rural areas as it is in the areas now becoming used to it—do not have access to financial services. Yet the bank is crucial. When the last bank closes that is a death knell in the village. We must do all we can to retain those services where it is possible.
Julian Sturdy (York Outer) (Con)
My hon. Friend is making a powerful argument about local rural services. Shops are also suffering, because if cash points in villages are lost and people cannot get access to the cash, they do not spend it locally. That has an impact on local shops and on tourism in rural areas.
Glyn Davies
That is right. As we reduce spending power, every service goes. Each one affects the others.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I just want to highlight what has happened in Aldeburgh, where HSBC pulled out—its only communication with the wider community was a poster in the window. Retailers responded by offering cashback. Does my hon. Friend agree that the subject in question is a very suitable one for the Office of Fair Trading to look into? After its study of oil supplies it is examining other issues affecting rural communities; access to financial services could be its next topic.
Glyn Davies
I thank my hon. Friend for that sensible suggestion. There have, indeed, been other suggestions from hon. Members, including one about a summit, which also seems sensible to me. I am sure that more will be made, and I look forward to the Ministers’s response to the debate, to find out where the Government are going with the issue. There is a responsibility on the Government to serve everyone in this country. They have, rightly, worked closely with business and banks to ensure that money is available to business, for the creation of employment. That is currently a huge Government policy issue.
Access to services for our rural areas is also a huge issue. It is not a new issue; it has been there all of my life. The coalition Government have taken a serious and responsible approach to post offices. We need the same discussion and pressure on our banks. If a summit is the answer, that is the way we should go.
The responsibility rests with the banks. The current view of banks is very much influenced by the debate about bonuses and very high salaries. There is a view among the poorest in our society that there is a lot of money available in banks—I know that that is not necessarily the case—so that when they see their banks being closed or their banking hours being reduced for a relatively small saving, as is happening in Llanidloes and Montgomery, they cannot understand it. The banks are disengaged from a major section of the community. The Government must ensure that the banks understand that they have a responsibility not just to the bottom line but to deliver services.
Chris Ruane (Vale of Clwyd) (Lab)
I want to carry on where the hon. Member for Montgomeryshire (Glyn Davies) left off and talk about the public reputation of banks in the UK—in fact in the whole world. Banks today are not in a good place. Earlier, I mentioned the quote, “The time for remorse is now over”. The banker who said that totally misjudged the mood of the nation. Having been through the expenses scandal, we as MPs recognise this situation. We know that we have to build bridges with the public, and the banks and the media must do the same. Of all three sectors, the banks are showing the least remorse and seem less anxious to make good their reputation with the public. They must look again at the balance between profit and social responsibility. Banks are about profit, but as they make that profit from people and from communities, they bear certain responsibilities, which we have not witnessed their fulfilling since the banking crisis. They have the opportunity to learn their lesson and to make amends with local communities, especially in rural areas. It sticks in people’s guts when they hear about billions of pounds being set aside for bonuses while branches are being closed. Such action does not sit well with the British public. Banks should perhaps take some of those bonuses and reinvest them in rural and poor communities across the UK.
The local presence of a bank in a high street or a village is very important. It is about making a commitment to a community. In the past—I will not go too far back—local bank managers were trusted pillars of the community. They were down at the golf club, picking up the local knowledge. They knew who was a sound investment and who was not, so when they were sat across from someone who wanted money, they were able to give the appropriate advice. That cannot be done by proxy from a city 20 or 30 miles away, or from a town 10 or 15 miles away. Understanding the vibes of an area and keeping a finger on its pulse needs to be done in the community; local knowledge and local presence are very important and lead to sound lending. Banks were also involved in the wider community; they were in the business groups and the town centre forums, using their expertise and knowledge to help local people.
There has been a lot of bank kicking today; I have done it a bit myself, but let me mention some examples of good social responsibility that I have come across over the years. About 10 years ago, I wrote to all the banks in my constituency and said, “What is your corporate responsibility agenda? What do you give back to the community?” I had an excellent response from Barclays’ Wendy O’Raheilly, who was based in Cardiff. She said that she would drive 200 miles there and 200 miles back to tell me about it. She told me that at that time, Barclays was the second biggest corporate donor in the country, donating some £52 million. Sue Jones, Barclays’ local person based in Rhyl, attends every Rhyl in Bloom meeting. She brings 70 Barclays personnel from all over the UK to help out in community initiatives. There are clearly some good banks. HSBC has received a kicking here today, but its local person, James Smith, attends all our town centre forum meetings. I wrote to the HSBC chief executive for the whole of Europe, Brian Robertson, to tell him what a great employee he had. He then got on the phone to James Smith, saying how pleased he was to receive such a letter. Some banks take their social responsibility seriously; other banks need to do more. The Britannia building society is now getting active in my local community in Rhyl.
In the interests of transparency, the banks need to advertise what they are doing. They need to tell us the criteria for closing down rural banks. We need to know what is best practice and how we can push the worst practice upwards towards best practice. Some banks inform MPs of their branch closures. Do they inform the town council, the county council or the community council? How far in advance do they do that? Do they produce the criteria for closures so that communities can argue against them, or is it all done and dusted before the dialogue is started?
My hon. Friend the Member for Harrow West (Mr Thomas) made the excellent suggestion of holding a summit with the banks. I hope that the Minister and the shadow Minister, my hon. Friend the Member for Chesterfield (Toby Perkins), will hold such a summit and invite rural MPs from across the House. Actually, why keep it to rural MPs? Perhaps all MPs who are experienced in bank closures should be invited.
We need historical perspective: how many branches have been closed by each bank; what percentage are they of the total number and were those branches in rural, urban or poor communities? That will give us a picture and allow us to say to a bank, “Yes, we can hold you up as best example and you, as worst example.” We need a ranking of banks. Which are the banks that have social responsibility and which are the ones that do not? I am not sure whether there is an all-party parliamentary group on banking. If there is, I have been inspired to join it after today’s debate. Perhaps it would have a role to play. Perhaps we should be tabling parliamentary questions on the matter. Are such closures being recorded by Government? Part of this Government want a hands-off approach towards the private sector because they want to let it get on with its business, but these are big issues affecting our communities. Access to finance can help decide whether communities in rural or poor areas flourish or die. I fully back that idea of a summit, and hope that it is taken up by the Minister, the shadow Minister, the all-party parliamentary group and MPs.
What can be done with these closures? We can look at what the Labour Government did with the post offices; we had to close them in some rural communities and it was a painful process. Can the private sector learn from the public sector? In our closure programme, we looked at where a post office was and where the next one was. We studied the radius around the post office under threat. Everything was done mathematically and systematically. Should the banking sector get together and co-operate? They could cut their costs if they said, “We won’t close a bank here if you don’t close a bank there.” Is there synergy to be had among the banks in the banking sector? Is there enough co-operation? I understand that it is difficult because they are all after the same pot; they are all after profit. If they have social responsibility, they should consider more co-operation.
Mobile banks have been mentioned today. We discussed and implemented such a strategy when we closed the post offices. We had post office mobile vans going around the country. Could there be any co-operation between the post office mobile vans and mobile banks? Such a scheme will cost money, but it might be a sound investment for the banks, not only economically but socially, because their reputation would improve.
Is there room and opportunity for the banks to co-operate with the credit unions, which have already been mentioned in this debate? If banks are pulling out of an area, could they co-operate with credit unions—again, giving them a bit of a subsidy—to move into the areas that they are moving out of? Is more co-operation possible with static post offices, rather than just with mobile post offices? Money is being collected and deposited in those post offices. Are there any synergies between the banks and the post office network?
There have been a lot of good suggestions today from Members of all parties; I think that the debate has been consensual and further progress can be made; and I thank the hon. Member for Brecon and Radnorshire (Roger Williams) for securing this debate, which has been well attended. Indeed, the hon. Gentleman took lots of interventions; he was very generous in doing so, especially with me. And some good has come of the debate.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Like my hon. Friend the Member for Montgomeryshire (Glyn Davies), I had not intended to contribute to this debate, but it has thrown up many useful points and I want to expand on just one of them: the notion of a summit on banking closures. I hope that the Minister might be able to respond favourably in that regard.
A number of hon. Members have mentioned the social impact of bank closures in their areas. However, as part of any banking summit, should we not go down the road that my hon. Friend has hinted at and contextualise the issue and consider the impact on rural communities of the closures of pubs, petrol stations—an issue that no one has mentioned so far, but that has a profound effect—post offices, as we have just heard, and schools, alongside the closure of banks and other services? I say that because in the past there was such a thing as the rural advocate. The Minister will be familiar with the rural advocate, whose job was to rural-proof Government decisions so that, where there might be a disproportionate impact on rural areas, that factor would be taken into account. I fully understand that there was a need to reorganise things, if I can put it that way, within the Department for Environment, Food and Rural Affairs, which I think was the Department that the rural advocate was responsible to, although they might even have been responsible to No. 10. However, that does not mean that the role that the rural advocate undertook is not as important today as it was in the past.
Chris Ruane
I thank the hon. Gentleman for giving way, especially as I had babbled on for 10 minutes before him. Regarding the loss of those facilities—the pubs, schools, post offices, banks and petrol stations—within rural communities, does he think that there is an onus on those communities to accept more housing and not to lump all future housing developments in urban areas? I represent an urban area and a rural area, and as we look at housing development over the next 10 years, the feeling is that all the houses should go to the urban areas to preserve our rural areas. But each community should expect to have a 10% increase in housing, with social housing, so that there is mixed tenureship, and family housing, so that communities can keep the schools, pubs and post offices open, because people are living in them.
Simon Hart
The hon. Gentleman tempts me to engage in a debate about affordable housing and rural areas, and I am not sure that the Chairman would forgive us if we were to do so this late in the day. Perhaps we can have that conversation over a cup of tea after the debate, if he does not mind my putting it that way.
In an earlier intervention, I mentioned the irritation that I experience at being charged exorbitant sums to take my own money out of certain cash machines, but there is another element to the availability of cash that I did not refer to: cash-in as opposed to cash-out. The right hon. Member for Torfaen (Paul Murphy) may have mentioned this point already, but rural areas survive—survive a lot, in the case of my constituency of Carmarthen West and South Pembrokeshire—on tourism-related events and tourism-related industries, which often involve people who carry substantial amounts of cash. When there is a fundraising event in a local area, or indeed a busy weekend in general, the need to get any cash that is made into somewhere that is reasonably safe reasonably quickly goes to the heart of the social responsibility that the hon. Member for Vale of Clwyd (Chris Ruane) referred to. We must bear in mind that there is a proper need—not just a desire to be treated differently—to get that money into places where it is safe, as soon as it is possible to do so.
On the topic of a summit, as yet no one has mentioned the requirement for banks in the rural areas that we are talking about to address—again and again—lending. We all know, and indeed we have heard today, that there are very responsible staff and managers of local banks, but they have their hands, feet and everything else bound by central office lending guidelines. To me, it is one thing to debate the availability of banks on the high street for our rural communities, but let us also get those banks lending. I suspect that the guidelines for such lending no longer lie with the bank manager in Narberth, Whitland, St Clears or wherever it might be. I have here an e-mail from NatWest that is about the closure of the NatWest branch at Whitland in my area, but it comes kindly from the Royal Bank of Scotland at 280 Bishopsgate, which I suspect is where most of the decisions are made with regard to rural banking. Therefore, I say to the Minister that if we are to have a banking summit, let us also deal with lending to some of the small and medium-sized enterprises in rural areas.
I also want to talk about high street prosperity. We had a debate in the main Chamber the other day about the Portas report, the Government’s warm recognition of its recommendations and how we can regenerate one or two of our ailing high streets as a consequence of the advice that the Government has received from Mary Portas. Of course, within all that discussion, there is a need for a vibrant high street banking facility. Such a facility is one of the vital pieces of the economic jigsaw in our rural market towns, and no jigsaw works if a vital piece is missing. So we cannot accept the Portas report and then say, “But not banking.” We have to accept high street banking as part of that package, and as I have already said, I hope that—as part of the proposed banking summit or even perhaps as part of the Minister’s summing-up of this debate—reference can be made to that issue.
Sharing facilities was mentioned earlier by hon. Members from all parties, and it is an extremely helpful development. Mobile facilities have worked in one or two rural areas, as far as post offices are concerned. Having referred to the e-mail that I received from NatWest, I must say that NatWest has been helpful in our area by
“working closely with the Post Office to make changes to its IT systems to enable customers to use the Post Office branch network”,
as its e-mail sets out. That is a positive development in terms of shared working, which I commend NatWest bank for making.
Finally, my hon. Friend the Member for Suffolk Coastal (Dr Coffey) made the point about a possible investigation into rural bank closures by the Office of Fair Trading. It would be helpful if the Minister leaned in the direction of working with the Welsh Assembly Government—or the Welsh Government, as they now like to be called—with regard to making a proper team effort to address the impositions put upon rural communities as a consequence not only of bank closures but other closures of facilities. Rural communities do not want special treatment, but they want to be able to function on equal terms with the rest of the UK.
Toby Perkins (Chesterfield) (Lab)
Thank you very much, Mr Brady, for allowing me to speak. Unlike the hon. Member for Montgomeryshire (Glyn Davies), I believe that this is the first time that I have had the pleasure of attending a debate that you are chairing, but my excitement is none the less for that. I have obviously not been in the right place before.
This has been a good and important debate, and there have been some really important contributions. I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on securing another Westminster Hall debate on rural bank closures. The issue is just as relevant and urgent—if not more so—as it was when he secured a debate on it back in March 2011.
The importance of this issue is shown in part by the number of different organisations that contacted me in advance of it to express their views on the problems that rural bank closures are causing their membership and their areas of interest. Those organisations include the Forum of Private Business, the Campaign for Community Banking Services, the Post Bank Coalition, the Federation of Small Businesses and the Countryside Alliance. As I say, they all contacted me to express the difficulties that this issue was causing their members. The Countryside Alliance briefing nicely laid out the fact that access to money and finance in rural areas has never been more acutely limited. It said:
“20 per cent of the population live and work in rural areas and yet only 12 per cent of bank branches and 10 per cent of cash machines are located there.”
What we are seeing is a population shift towards rural communities but at the same time a hollowing-out of services within rural areas. The briefing continues:
“Around 200,000 people living in rural England do not have access to a bank account of any kind. Even before any further bank closures, more than 930,000 households in rural areas live below the Government’s official poverty line and as many as 300,000 people living in the countryside do not have bank accounts.”
There is a broad issue about services in rural communities generally and a specific issue about the role of banking in our society. There is a challenge for the Government in terms of how they can stand up for Britain’s small and medium-sized enterprises. Although those issues are not new, they are becoming more serious, as has been stated in several contributions to the debate. A variety of cogent points were made by Members, to which I will refer.
The hon. Member for Brecon and Radnorshire laid out the importance of exploring the idea of community banks. I look forward to the Government’s response. The Government must take responsibility for co-ordinating and pressing the banks to deliver their public service responsibilities. He also laid out the potential value that there might be in the role of shared banks, which we want to see explored in a lot more detail. My right hon. Friend the Member for Torfaen (Paul Murphy) expressed in graphic detail the devastating impact of the closure of the HSBC bank in Blaenavon, which affects small businesses, the elderly and the community. A cash point is needed there, even if the bank disappears. That point was also made by other hon. Members.
The hon. Member for Montgomeryshire expressed the importance of supporting local businesses and how their presence retains young talent within our rural communities. A difficulty occurs when young people go away to university and do not come back to their own communities, resulting in a hollowing-out of talent in local rural areas. He described how it is often a death knell for village and community life when a bank closes. That is an important point.
My hon. Friend the Member for Harrow West (Mr Thomas) captured the mood of the debate with his call for a summit of the major banks and for the Government to get a summit together. We have seen the NHS summit this week. Perhaps the next summit will include invitations to the people who do not agree with the Government. Notwithstanding that, his idea was seized upon by other hon. Members as having merit. He spoke about the impact of the last bank closing in north Harrow in his constituency. He said that the summit should call for a commitment by the major banks to stick to the principles of the last bank agreement, so that when we are down to the final bank in a constituency, they stick to the commitment to retain it as a public service.
My hon. Friend the Member for Vale of Clwyd (Chris Ruane) supported the call for a summit. He asked for an analysis of the number of bank closures to ensure that we have important information. It is vital for banks to raise their reputation and standing. They can have an impact on our broader community and economy. We need to sense that we are all in it together and that banks realise and recognise their responsibilities.
The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) also supported the call for a summit. He said that it needs to be expanded and should not just be about rural banking closures. He wants it to hold banks to account for their failure to lend to small businesses, and I would entirely support that. He also made the point that this is not just about the banks that go last, because they are the ones that stayed longest. We should also be looking at the banks that go before. We should recognise that banks have business decisions to make every day, but when they become the last bank in the community, there is also the public service issue. When members of the community can access shared banking services and tolerate only one bank in their village—in the town in the case of Blaenavon—it has a dramatic effect when that last one goes.
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) talked about the impact on small businesses. My hon. Friend the Member for Scunthorpe (Nic Dakin) mentioned the fact that the bank is often a key pillar of the community. That leads me to the broader issue of rural services. Local banks and post offices are the lifeblood of a community in rural areas. They impact on everything, from people’s sense of place and community to the capacity of small businesses to be run there, offering local employment prospects. They impact on tourism in some rural areas. We are seeing an increase in the number of people living in rural communities, yet a retraction in the services actually provided. That then has an impact on the ability of elderly and disabled people to engage in society in the way that we would expect—something that people who have easier access to transport or who live in urban communities take for granted.
The coalition agreement promised a post office bank. I am sorry that the Government have decided to renege on that promise. It was an idea floated by the previous Government. It was in the Labour party manifesto. We thought that it had been taken up by the new Administration when it was mentioned in the coalition agreement. The idea for a post office bank, in which post office facilities were used for some basic financial services, especially in rural areas, has, to the disappointment of many organisations, apparently been ditched.
Alongside the importance of rural services is the issue of what we expect from banks. Banks are both businesses and public services. When the banking crisis struck, the taxpayer provided support in a way that we have not done with numerous other industries. Many other industries, businesses and large firms have been allowed to go to the wall, but the banks were saved by the taxpayer, because we recognised the importance of the banking sector to our communities and, of course, to the business community. We recognised the possible impact on our communities. That role is acknowledged by the banks. It is one of the reasons why the last bank in town commitment is so important.
Evidence from the coalition of community banking services has shown the gradual reduction in rural banking services and the extent to which the number of dual bank communities has reduced, often because banks do not want to be the last bank in town and then come under more pressure than they would if another bank closed. So the suggestion made by the Minister in March 2011 that increased competition in the mainstream banking sector would be a solution is entirely disingenuous. It is an important issue to do with some of the other inadequacies in our banking environment, but once we get to the last bank in town, the decision about keeping it open is often one in which commercial considerations overtake the public service considerations, so the idea that an increase in competition will lead to an increase in the number of banks staying open in such areas is an unlikely one.
Banks are closing because banks have over many years been engaged in a long-term process of centralisation and cost reduction, and small local branches simply do not sell enough financial services products to keep them open. Communities that have invested in a bank, borrowed from a bank and been customers in that bank for many years often find that their loyalty is not returned when the branch is no longer commercially successful. So this is an issue of equality for people on low incomes, and it is an issue about how we support our elderly and disabled people, as well as how we support our small businesses. There is a greater role than ever before for debt advice. The advice sector is hollowing out and centralising in the face of cuts to the voluntary and local government sectors. That could push impoverished people towards payday loans and illegal loan sharks, as well as reducing the access to quality financial advice for elderly and disabled people who are not able to travel 10 or 15 miles to the nearest bank.
There must be a greater role within our banking sector for credit unions and mutuals, and I am interested to know what more the Government can do to promote them. Alongside the failure on rural commitments, as the hon. Member for Carmarthen East and Dinefwr said, is a failure on access to finance for small and medium-sized enterprises. That is recognised right across our business community. One of the biggest single drags on our economic recovery is the failure to make finance accessible to small businesses, owing to the banking sector’s retrenchment and the failure of the Project Merlin agreement, particularly for small businesses. The Government need to do a great deal more on that.
We all recognise that if we are to have a private sector-led recovery, SMEs will play a significant role in delivering growth within our economy. Members will have been as shocked as I was to learn the extent of the current Government’s failure in a YouGov poll yesterday, showing that a quarter of small business owners expect to close within the next two years.
At a time like this, when small businesses are under the cosh more than ever, we must recognise the banking sector’s role in supporting those businesses. Often, such businesses deal in cash and need daily access to bank services. There are clearly security implications for small businesses that cannot cash in their takings daily, as well as efficiency implications. A small business owner who must close early to drive 10 or 15 miles to take their money to the nearest bank will make less profit. At a time when small businesses need all the help that they can get, the Government and the banking sector should be doing a whole lot more. Hon. Members mentioned the importance of the local business relationship between banks and their business customers as well as their individual customers.
I should like to hear the Minister’s comments on the proposal made today for a summit. I should also like to hear what more can be done to take forward the inter-bank agency agreement model, which has been important in enabling businesses to share bank branch services. What does she think of today’s proposal by the Forum of Private Business that banks should share premises?
This debate involves the broad issue of services in rural communities, the specific role of banking in our society and a challenge to the Government to stand up for Britain’s small businesses. We recognise that rural communities exist in a variety of ways, but if they are to be sustainable communities and not just places where people live, services are crucial. That is why this debate is so important. I welcome the contributions made by all Members and look forward to learning more about what the Government will do to address this serious issue.
The Economic Secretary to the Treasury (Miss Chloe Smith)
I hope you will excuse my slightly unorthodox speaking style, Mr Brady, due to a broken foot. I thank the hon. Member for Brecon and Radnorshire (Roger Williams) and his colleagues, who are now giggling in the back row. I also thank the other Members who have contributed to this important debate. It follows the interesting and useful debate secured last year by the hon. Member for Brecon and Radnorshire, to which my hon. Friend the Financial Secretary responded. He is in Committee today, considering the Financial Services Bill. I am sure that he will read today’s Hansard with deep interest and mull over the calls for a summit and the suggestions about with whom he should work if he is minded to hold one. I recognise the concerns expressed capably by all hon. Members about the impact of past and planned branch closures by high street banks in their constituencies and about the availability of banking services in rural areas more generally.
Chris Ruane
On the issue of a banking summit, will the Minister consider calling it herself, in co-operation with the shadow Minister, or is it something that she will leave to Back Benchers?
Miss Smith
The hon. Gentleman will appreciate that I shall have to leave that to the consideration of my colleague at the Treasury, whose portfolio it more properly is. However, as I said, I am sure that during a slow moment in Committee upstairs, he will read today’s Hansard and take the hon. Gentleman’s views deeply into account.
The Government recognise that people in rural areas experience much the same financial challenges as people living in towns and cities, even Harrow. However, living in a rural area can bring additional challenges apart from the obvious examples of bank closures. Exclusion from financial services can be less visible in rural areas than in urban areas. My hon. Friend the Member for Montgomeryshire (Glyn Davies) and others have highlighted a range of rural challenges. I have some understanding of them myself, having grown up in the fens in rural Norfolk. My first bank account was in a branch in a market town.
With regard to access to bank accounts, the Government are committed to improving access to financial services, as I shall explain, and in particular to bank accounts. It has been amply demonstrated that having a bank account is an essential aspect of modern life and that being able to access counter services at a branch while interacting face to face with staff is a service valued not only by individuals but by businesses. I have also heard the points made today about its tourism value. However, I must point out that decisions whether and where to maintain specific branches are commercial decisions and, as such, for the financial institutions in question. The Government do not intervene in such decisions, as a matter of principle.
All banking service providers must balance customer interests, market competition and other commercial factors when considering their strategy. I note the call by the hon. Member for Vale of Clwyd (Chris Ruane) for banks to balance social responsibility with those factors, but I will say at the outset that the Government have been clear about the need for a change in bonus culture and for banks to contribute to the real economy, support small and medium-sized enterprises throughout the UK and lend to families. The bottom line of today’s debate is that banks have customers, and it is clear that they must treat them fairly in taking decisions about them.
With that in mind, I will set out briefly the regulations that apply. Banks’ and building societies’ treatment of their customers is currently governed by the Financial Services Authority in its “Banking Conduct of Business Sourcebook”, which includes a general requirement for firms to provide a prompt, efficient and fair service to all their customers. The guidance agreed by the industry and the FSA sets out expectations of how banks should live up to that code of conduct and specific guidelines for how banks should behave when considering closing a branch.
The guidance states that if a firm plans to close or move a branch, customers should be notified at least 12 weeks beforehand and told how the firm will continue to provide retail banking services. That includes providing micro-enterprise customers with information on any existing inter-bank agency agreements. A notice should be placed in the branch, and consideration should be given to other local advertising and notification of local councils and community groups. The bank should provide information on alternative facilities offered by the firm in the locality, including its nearest alternative branch and nearest free ATM, as well as other channels through which banking services are provided.
My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) mentioned free ATMs. I believe that the LINK network, of which, I note, he is perhaps no great fan, runs a phone line that customers can use to propose sites for new free-of-charge cash machines. Perhaps he might encourage his constituents to take that up.
The guidance also requires that customers be notified at least 12 weeks in advance of significant alterations to counter services or opening hours. On the back of those points, first, such arrangements clearly help customers make alternative arrangements to meet their banking needs. Secondly, they enable options to be considered, such as the action plans for which the right hon. Member for Torfaen (Paul Murphy) called. Thirdly, to use an example that we heard today, I am pleased that people in Suffolk, Coastal could respond in that way. When people see a notice in branch buildings, some are clearly able to respond. Fourthly, however, that does not change the end fact that a branch may still be withdrawn.
Let us move on and note what banks offer in addition to their face-to-face services. Several Members have made the point today that banks offer services by telephone and by internet. My hon. Friend the Member for Carmarthen West and South Pembrokeshire raised the significant issue of broadband, which I am sure is on everyone’s minds. The Government have laid out significant plans to improve and complete broadband for rural areas. I could go into that more, but I suspect that that is a different debate and that you, Mr Brady, will not allow me to speak on it. I reassure Members that the Government understand that point and are acting on it.
It is fair to say that the channels I have talked about are not always appropriate for every customer and every service. As hon. Members have noted, having access to a branch with face-to-face services is particularly important for older people and for small businesses that may require cash facilities to trade. However, the fact is that phone and online channels are increasingly popular, and the provision of such services is expanding and diversifying rapidly, giving customers a range of choices as to how they manage their affairs.
It is important to note that many bank account providers have an arrangement for customers to access their accounts via post office counters, which I am glad that hon. Members have noted throughout today’s debate. I know that Members will welcome the Government’s stance on post offices, notably making clear commitments regarding the future of the network—that there will be no further closure programmes and that we will maintain a network of at least 11,500 branches and ensure that specific access provisions for rural areas are included. I understand that 80% of customers now have the possibility of withdrawing or depositing funds or checking their balance at a post office branch.
Hon. Members raised shared branching, which is where several banking providers pool their services in some way. That is an interesting idea that clearly requires a high degree of commercial collaboration. I return to my point that the best people to judge that are the banks themselves, and I would certainly encourage them to consider that idea and also mobile banking, which was also raised in today’s debate.
Roger Williams
I can understand why the Minister points out that the Government should not micro-manage banks, but surely, the piloting of an innovative proposal such as shared banking is something that the Government could actively introduce?
Miss Smith
I am afraid that that would not be something that the Government could introduce, as the Government do not run banks. Regarding the banks in which the Government are the majority shareholder, they are run at arm’s length, as all hon. Members know, but I hope that my words will serve as a small measure of encouragement. It is a positive idea that could and should be looked at by banks themselves.
Regarding what the Government are doing to promote access to financial services, we are taking a number of important actions to help consumers access the services that they need. We are strongly committed to promoting a diverse financial services sector that serves the needs of the wider economy, which is the one of themes of today’s debate.
To start with, we need to encourage access to savings products. The Financial Secretary to the Treasury announced last week that the Government have launched a steering group to design a range of simple financial products, which will help new participants enter financial markets to provide straightforward and easy-to-understand products. I am sure that all hon. Members present today will welcome that.
I reiterate that we want the industry to take a lead in designing simple products, because we want the products to be viable commercial propositions for customers that will stand the test of time. There is an opportunity for industry to innovate properly, which may include mobile or shared services, and to develop a range of simple products that—again we return to the key point—meet their customers’ needs.
Miss Smith
I am about to respond to the hon. Gentleman’s points, so if he will allow me to continue with my comments, I will do so later.
I think we have all acknowledged in today’s debate that the needs for access to finance go far wider than banks and building societies. The Government strongly believe that credit unions can act as alternatives to banks and building societies in providing affordable financial services to people who may not otherwise be able to access them. The Government are providing additional support to such institutions through the Department for Work and Pensions, which I know hon. Members will welcome. The results of some of its feasibility studies will be published in due course. That forms just one part of the Government’s efforts to promote a diverse and competitive financial services sector, on which I am sure the hon. Member for Chesterfield (Toby Perkins) will have something to say.
Toby Perkins
I am delighted to hear that there is an interest in credit unions, and the Minister is absolutely right to say that they can play an important part.
Regarding the substantive issues that have been raised today, Members will be forgiven for thinking that they are walking away from the debate with little sense that the Government are doing much about the issue. What we are hearing is that such decisions are for the banking sector. Regarding the main thrust of the debate, which is about customer service and public service responsibilities of the bank, I think Members will leave with the sense that there is little pressure from the Government to get banks to face up to their responsibility and recognise the broader economic impact if we do not sort the issue out. I think we need to see a far greater sense of urgency and action from the Government on the issue.
Miss Smith
The hon. Gentleman will in that case be pleased to hear me move straight on to the next section of my speech, which deals exactly with what the Government are doing this very day in Committee: acting on the part of the financial system for which they have responsibility, which is to talk about financial conduct and competition in financial services. The key to the hon. Gentleman’s question is in his own words. There are two things at stake: customer service and public service. Banks and commercial institutions must be responsible for customer service, and I will now turn to some aspects for which the Government can reasonably be said to be responsible.
It is essential that consumers are able to apply competitive pressure and to understand where they can hold their bank to account and how the broader market operates. Customers should be able to vote with their feet and to switch their custom to banks that provide the best products for them, including access to a branch. The Government are therefore committed to fostering diversity and promoting competition in the banking sector. To that end, the Government have accepted in principle the competition recommendations of the Independent Commission on Banking, which was mentioned earlier in the debate. The Government will now consider the proposals in more detail.
In line with those recommendations, I am pleased to note that the banking industry has already made some commitments, such as introducing a faster and safer switching service to ensure that customers can switch within seven days. Along with the more enhanced transparency measures that are already being implemented in the personal current account market, including making charges clearer and providing annual statements of charges to each customer, the new service will make it easier for customers to exercise what they have to do, which is vote with their feet if they feel that their bank is not meeting their needs.
To ensure that consumers are adequately protected in accessing financial services, the Government are also reforming the regulation of financial services. I remind the House that as part of the Financial Services Bill that is being discussed in Committee as we speak, the Government are creating a new and dedicated conduct of business regulator, the financial conduct authority. Also, the Office of Fair Trading has already committed to reviewing the personal current account market in 2012, about which I hope my hon. Friend the Member for Suffolk Coastal (Dr Coffey) will read later.
It is clear that customer service is at stake here, and there is public interest in how rural communities can best be supported. However, it is also clear that the issue spans a substantial regulatory and non-regulatory agenda, and the Government are pursuing that. The landscape is changing rapidly, just as customers’ needs are changing, and the financial services sector will need to change to take account of that. It is vital that the sector continues to meet the needs of ordinary consumers, including those who prefer to access banking services via a branch.
Once again, I thank the hon. Member for Brecon and Radnorshire for his continued work on the issue. Clearly, we all share appreciation of that. I would also like to thank all the others who have contributed today. The Treasury will continue to take the issue into account as it pursues the wider financial inclusion agenda.
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Ian Murray (Edinburgh South) (Lab)
It is a great pleasure to have secured this Westminster Hall debate under your chairmanship, Mr Brady. I am delighted to have been given time by the House to hold this timely debate on a very important authority.
I start by paying tribute to a number of hon. Members who have done so much in this area. First, I pay great tribute to my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan), whose 2004 private Member’s Bill commenced the legislative process that created the Gangmasters Licensing Authority. I also pay tribute to my hon. Friend the Member for Wrexham (Ian Lucas), who was the Minister responsible for taking the Gangmasters (Licensing) Act 2004 through the House of Commons, and to my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who has been a champion of vulnerable workers, and the Gangmasters Licensing Authority in its various guises, for many years before becoming an MP.
It is also appropriate to pay tribute to the trade union movement, which has championed the cause of vulnerable workers for many decades and has been a stalwart defender of the Gangmasters Licensing Authority when it has been attacked by this Government. I should also pay tribute to everyone who works in the authority for doing the incredibly challenging and difficult job of making sure that workers are not exposed to exploitation.
I should remind hon. Members why the Gangmasters Licensing Authority was created in the first place. It was created as a result of tragedy: the drowning of 23 cockle pickers in Morecambe bay in 2004. The deaths of the Chinese cockle pickers put back into use a word that had almost been forgotten in British public life since the 1960s: “gangmaster.” A Chinese man who had organised the group was described as their gangmaster and was later found guilty of the manslaughter of 21 of those who had drowned. The incident led to a wider debate about those who organise casual workers and sometimes exploit them. It resulted in the creation of the Gangmasters Licensing Authority to regulate that form of labour.
The new legislation was groundbreaking, as it was widely assumed that working gangs and gangmasters had disappeared. In agriculture, European migrant labour has generally moved from areas with smaller farms to places where prices and wages are higher. That movement created the gang system, particularly in the eastern counties of England, where accommodation for permanent farm workers is scarce and there is high demand for seasonal labour. So the gangmaster was alive and well, had been exposed through tragedy, and was often linked with organised criminal activity.
New versions of the old exploitation developed over time, encouraged by the relentless pressure to cut food production costs. The new licensing authorities are attempting to prevent exploitation, but the poverty of some countries compared with Britain will sustain such a system in the future. Once it was Irish migrants; now they might be Latvians or, as we saw with the cockle pickers, Chinese. What continues is the movement of migrant agricultural labour and the abuse-prone gangs that have historically always been associated with such labour.
Once the Gangmasters Licensing Authority was established, it was supported by a coalition of national retailers, food industry representatives, labour providers and trade unions. Crucially, there was cross-party support in this place for the regulation of those who supply labour in the areas of agriculture, forestry, horticulture, shellfish gathering, food processing and packaging. However, we are not simply talking about a piece of employment legislation that the Government would have people believe is a burden on business. This is a life-saving body that safeguards the welfare of workers, while regulating the providers of such workers and protecting some of the most vulnerable workers from exploitation, abuse and modern-day slavery.
As stated in many independent reports—I shall mention just a few—the GLA has been a huge success. Independent evaluations conducted by Sheffield and Liverpool universities have confirmed the effectiveness of GLA enforcement. In a survey of licensed gangmasters in 2008, eight out of 10 respondents were in favour of licensing; seven out of 10 felt that the GLA was doing a good job; and only 18% described their contact with the GLA as burdensome. The Joseph Rowntree Foundation has had a major research programme on forced labour for several years, and much of its work has touched on the GLA and the role it plays. What it says sums up the GLA:
“To put our position simply, we are big supporters of the GLA. All of our research and contacts with businesses, employers, unions, campaigners—everyone—suggests they are doing a vital job. They are a hugely effective tool in preventing contemporary slavery. Indeed, there is a case for expanding their remit out with the sectors they currently regulate.”
The Equality and Human Rights Commission’s inquiry into human trafficking in Scotland commented that:
“Apart from the Gangmasters Licensing Authority (GLA), the Inquiry did not identify evidence of regulators linking anti-trafficking efforts with their work”.
Crucially, the Hampton report, which looked at reducing regulatory burdens on business, and which led to an inspection programme covering all regulators, strongly endorsed the GLA’s approach, concluding that:
“The GLA’s impact in improving working conditions for some vulnerable workers has been impressive, particularly in view of its relatively small size.”
That report was endorsed by the Institute for Human Rights and Business, the Ethical Trading Initiative, anti-slavery organisations, the Association of Labour Providers, the Ecumenical Council for Corporate Responsibility and, of course, Oxfam.
Since its inception, the GLA has protected workers by ensuring that they receive their pay and holiday rights, and that they work in a healthy and safe environment. Inspectors also check that vulnerable workers are not housed in substandard conditions while being charged excessive rents. The GLA has played a central role in reducing human trafficking in the UK. The authority also helps to recover unpaid tax and national insurance, thereby increasing revenues for the Exchequer.
According to the GLA’s annual report last year, 845 cases of worker exploitation were identified. The financial cost of that exploitation amounted to £2.5 million. Some 91% of the GLA’s intelligence-driven operations identified serious cases of non-compliance. Some 36 cases of unlicensed activity were uncovered, and 33 licences were revoked. There were also 12 successful criminal prosecutions.
Mr David Hamilton (Midlothian) (Lab)
I congratulate my hon. Friend on securing the debate. Does not the GLA’s success mean that the problem is being moved across to the construction industry? A major problem is that there is no regulation in the construction industry to match the regulation that the GLA provides for other industries. Therefore, there is a good argument to say that the GLA should be expanded to cover the construction industry. That would help to deal with the industry that has the highest rate of accidents in the UK.
Ian Murray
I am grateful to my hon. Friend for raising that point. He has a private Member’s Bill on extending the GLA’s remit to construction workers, but because it is low down on the Order Paper, it will never be passed. I hope that the Minister will say in his response whether the Department for Environment, Food and Rural Affairs will examine the possibility of extending the GLA to cover other areas. The forestry and agricultural industries are becoming more regulated, gangmasters are becoming licensed, and the GLA has been successful, but there has been a migration of exploited labour into other parts of industry. I may mention that later.
Andrew George (St Ives) (LD)
The hon. Gentleman is making a very good case. I was co-sponsor of the Gangmasters (Licensing) Bill 2004 with the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), who should be congratulated. Would he add to the many benefits he has listed as having resulted from the GLA’s introduction those relating to farmers? They feel much more reassured that they are dealing with gangmasters on a sound basis. Also, the many legitimate gangmaster operations in existence know that the GLA is driving the illegal trade out of business altogether.
Ian Murray
I am grateful for that intervention and I congratulate the hon. Gentleman on co-sponsoring the 2004 Bill. The point he makes is critical. This is not just about protecting vulnerable and exploited workers; it is about cleaning up supply chains. That feeds right into the argument about good business being rewarded for doing good things, and the need to support initiatives that get rid of businesses doing bad things. It is crucial to recognise that it is good for good businesses to be involved in initiatives such as the Gangmasters Licensing Authority. That emphasises the point made by my hon. Friend the Member for Midlothian (Mr Hamilton) about potentially extending the GLA to other areas, and clearing up the supply chains to which the hon. Member for St Ives (Andrew George) referred.
The GLA has discovered a number of cases where trafficking for financial benefit, linked directly or indirectly to labour exploitation, is to the fore. Some of the activity appears to have direct links to the targeting of vulnerable people in homeless refuges in the host country, and to persons of interest to the police in their host country. Workers are sometimes left in a no man’s land: they have no means of supporting themselves in the UK, but are unable or unwilling to go home. They are exploited; to work in a promised land, they pay up-front fees that they are never likely to be able to repay.
I have some examples that give the issues a human face. The GLA has discovered workers living in squalid accommodation; the rent is often high—above the market rate—and deducted at source. One person described 12 workers living in a caravan with no water, sanitation, lighting, heating or cooking facilities. Another talked about 30 workers who lived in a structurally dangerous two-bedroom house; they were subject to summary eviction by men wielding baseball bats if they complained.
Transport problems were an issue. Those problems included unreasonable wage deductions for transport, and unsafe vehicles. The GLA uncovered the case of a worker who lost a leg when an unroadworthy van was involved in an accident. The gangmaster’s licence was revoked, and he could no longer provide farm labourers, but two weeks later he was back in business, supplying builders’ labourers. That highlights the point made by my hon. Friend the Member for Midlothian.
An eastern European worker discovered on a farm in Cornwall was promised a job in Scotland, but was then sold to another gangmaster. Having worked all week for £5, they were told that they owed the gangmaster £6.17 in costs, which of course they did not have. They were obliged to keep working to pay the debt, which continued to accrue, resulting in bonded labour.
Those are just some of the human examples of what happens in an unregulated trade, but the GLA is identifying exploited workers in contemporary slavery and is able to do something about it. The question that people will ask is: are UK companies involved? The Joseph Rowntree Foundation found that some, possibly many, UK-based companies rely on supply chains that involve the use of slave labour, both in the UK and abroad. The complex chains of subcontracting through a variety of labour agency networks, both in the UK and abroad, mean that many companies are unaware of, or can deny knowledge of, the conditions under which their goods are produced.
The UK supply chain is inherently based on a low-cost, labour-intensive business model. The GLA identified that price pressures from competition have led to a culture where gangmasters and labour users will exploit the most vulnerable link in the chain—the worker—to protect their profits. They will often accept a charge rate that, realistically, does not allow the labour provider to meet legal requirements. Workers are being paid below the national minimum wage so that labour providers are able to make a meagre profit by charging an unrealistically low amount.
The GLA has sought to tackle this insidious problem by developing a protocol with supermarkets and suppliers—a point was made by the hon. Member for St Ives about clearing up supply chains—that allows for the exchange of information. It has garnered the support of the majority of key retailers in the food sector. By working in partnership with supermarkets—that is key—the GLA has been able to encourage them to deal with allegations of exploitation in their supply chain, and to establish an audit standard for labour supply; that allows them to clear up their supply chain. The protocol is supported by every major supermarket in the UK. It is welcomed by them as a way to allow them to monitor their supply chains.
What is the future of the GLA? I welcome Ministers’ announcement that they do not intend to abolish it. Nevertheless, the Government are considering limiting its role, and the role of licensing remains under review. The Minister needs to be crystal clear that there will be no watering down of the GLA and its powers. This is not about counting paper clips, but saving lives, preventing exploitation, promoting clean supply chains, exposing organised criminal activity and undermining human trafficking—there could be no greater cause. The GLA is especially important in difficult economic times when labour supply exceeds demand and the pressures on work increase.
Ian Lucas (Wrexham) (Lab)
Does my hon. Friend agree that there is a frightening aspect to the rhetoric we hear from the Government about health and safety, and health and safety legislation in particular? Will he ask the Minister to give an assurance that the Government believe that health and safety legislation is necessary to protect individuals at work? Some of the rhetoric on this issue, particularly from the Prime Minister, is deeply worrying.
Ian Murray
The Minister has heard that challenge on health and safety. The red tape challenge website, which I am sure every hon. Member has dipped into and had a look at, is wide-ranging. The first line of every category, including the Equality Act 2010 and health and safety legislation, poses the question: “Should this be scrapped?”. I appreciate that it is a consultation, and that the Government are looking for ideas and views on the current make-up of regulation, but there is no greater challenge than maintaining health and safety regulations to protect workers whose lives or safety may be at risk. I hope the Minister will tell us categorically that some of the questions in the red tape challenge are challenges to seek answers, rather than an overall strategy to diminish workers’ rights and health and safety regulation.
To date, the Government have been rhetorical about the dilution of workers’ rights, but a statutory instrument changing the unfair dismissal period has been laid before Parliament and will come into effect in the next few weeks. There have been leaked reports from No. 10 Downing street about making it easier to fire, rather than hire, people. There is anti-regulation sentiment and rhetoric coming out of the Department for Business, Innovation and Skills, with its “one in, one out” policy on regulation. There is real concern that some of the enforcement actions that are critical for protecting vulnerable workers and good businesses through such authorities as the GLA are being challenged.
The Macdonald report suggested an end to gangmaster licensing completely, and a move to a system of self-regulation combined with “earned recognition”. It also suggested that the GLA should change from being a heavy enforcement body to a light-touch advisory body. I am not sure that anyone would deny earned recognition to good businesses, supply chains and supermarkets who are working in partnership with the GLA, and to the good farmers who want supply chains cleaned up. The problem is that all earned recognition does is divert attention away from where gangmasters may infiltrate in the future.
There is significant confusion about the future, what with the red tape challenge and what has been termed the star chamber process. That was highlighted by the Under-Secretary of State, Department for Environment, Food and Rural Affairs, Lord Taylor of Holbeach, who said initially:
“I am pleased to say that the need for the GLA to enforce protections for vulnerable workers in its sectors”,
which is crucial,
“was endorsed by the red tape challenge ministerial star chamber, although it recognised that the GLA needed to better target non-compliant operators and reduce burdens on the compliant. The GLA will of course continue to be monitored under the Government’s ongoing reviews of public bodies and enforcement agencies.”
That is not particularly clear. In a later exchange on the same question, he says of the star chamber process and the red tape challenge:
“From my knowledge of star chambers…they are where conflicting views which may need to be resolved are discussed in an informal way. That is exactly how the star chamber has functioned in this way.”—[Official Report, House of Lords, 12 December 2011; Vol. 733, c. 993 and c. 995.]
I hope that the Minister will clear up some of the confusion this morning on the Government’s view of the GLA, and on the perceived and reported fight between the Department for Environment, Food and Rural Affairs and BIS on the where the GLA should sit. It is right that it sits with DEFRA in its current guise. It should not be transferred to a Department that is considering deregulation and stripping out the safeguards put in place by the GLA.
Andrew George
On that point, the hon. Gentleman appears to be contradicting himself. On the one hand, he is saying that the GLA should be extended to the construction trade and other trades. On the other hand, he is saying that it should remain in DEFRA. If it goes beyond the parameters of the operation of DEFRA, does he not agree that it would be appropriate to rest the body in another Government Department?
Ian Murray
I was about to come to that. I agree that that seems inherently contradictory, but the key fact about the Gangmasters Licensing Authority sitting in DEFRA is that it is there to do a particular job, which it is doing rather well. Moving the GLA from DEFRA to BIS would be putting it into a Department that is looking at deregulation and is running the red tape challenge. A previous Under-Secretary at BIS—now the Secretary of State for Energy and Climate Change—has made clear remarks about where the GLA should sit and what its function should be. Indeed, he initiated the Macdonald report, which recommended a light-touch regulatory approach. If the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon) commits the Department at least to examining the extension of the powers of the GLA, there might be an argument about which Department it would sit in, but my point is that in this particular confusion, DEFRA is the best place for the GLA to sit. Moving it to BIS would merely be an act of deregulation, rather than showing support for an organisation that is prone to be hugely successful.
Will the Minister at least examine the possibility of not diluting the GLA, but extending it to other areas? We have heard about similar problems of exploitation and unlawful practices in construction, the social care sector and hospitality. There is evidence that the limited GLA remit has led to the displacement of rogue operators from GLA sectors into other parts of the labour market—the point made by my hon. Friend the Member for Midlothian. The Trades Union Congress has identified a strong case for extending the GLA licensing scheme, a view shared by the Select Committee on Home Affairs in its report on “The Trade in Human Beings” back in 2009.
There is also support for an extension to the GLA’s remit in the business community; that is critical to where the GLA currently sits in the Government’s thinking. Nearly three quarters of the gangmasters who responded to the 2008 survey by Liverpool and Sheffield universities, which I mentioned, said that the GLA scheme should be extended to other sectors—either to all sectors, or especially to the construction and hospitality sectors. That is significant, because many gangmasters operate in other sectors that are not subject to GLA regulation, most notably non-food manufacturing, distribution, cleaning and construction. Good business wants a level playing field, which can be delivered only by dealing with this contemporary slavery.
Recently, controversy has surrounded areas that the GLA has looked at, such as dairy farming, but the courts have recognised that, again, it is clearing up the supply chains. There is also a strong view that forestry should be removed from the GLA remit, but does that not provide a reason to allow the GLA to follow the evidence of gangmasters into any industry? I pose that question to the Minister. That way, gangmasters, rather than the industry, become the issue. Let the evidence follow the crime, if the evidence is there to investigate.
Mr David Hamilton
May I draw attention to my hon. Friend’s point about the support of the Scottish Trades Union Congress and the TUC? There is other support, too; the Select Committee on Work and Pensions took evidence in Midlothian many years ago, and the construction industry was represented there. It felt aggrieved about what was happening. Good, honest employers are having to compete against some unruly organisations, and they feel that they are in a deficit position as a result. It is important that we recognise that good employers also want regulation.
Ian Murray
Absolutely. I could not agree more with my hon. Friend. His private Member’s Bill, which I have already mentioned, looked at similar aspects of the construction industry. The critical point is that good businesses want good regulation—this is not about the amount of regulation—to clean up the sector, so that those good businesses benefit, as they deserve to benefit. As my hon. Friend said, “unruly organisations” and employers can then be rooted out, protecting not only workers but the industry. That is key, and it is why supermarkets have been so keen to work in partnership with the GLA, to bring that together.
May I summarise for the Minister some of the questions to which I would appreciate an answer? I am grateful for his presence—the Minister with responsibility for the GLA is otherwise engaged. Will he at least guarantee that there will be no watering down of the GLA regulation and enforcement powers? Will he keep resources in place, because the GLA is needed more now, in tough times, than in better times? Will the ministerial team at least examine the evidence for the GLA going into other sectors and, perhaps, following the evidence, rather than dealing only with particular sectors? Will the Minister look at the potential for more flexibility for the GLA, perhaps making it self-financing or providing it with the powers to examine other industries in less stringent terms, so that it looks not just at criminality? For example, I mentioned the dairy farmers: a slap on the wrist might have been more appropriate than a proper criminal process in that case.
There is widespread evidence that the GLA and the licensing system have been effective in raising standards in the fresh food processing sector, and other sectors covered, and in protecting some of the most vulnerable workers in the United Kingdom. The confusion and uncertainty on the part of the Government are not helpful, and the red tape challenge has proven that confusion can reign in such matters. Finally, let me return to where I started: the Gangmasters Licensing Authority was set up on the back of a horrendous tragedy. Any reduction in the remit of the GLA would put vulnerable workers at risk of exploitation, modern slavery and perhaps even death. Let us not scrap something that works.
John Pugh (Southport) (LD)
I congratulate the hon. Member for Edinburgh South (Ian Murray) on securing this important debate.
I also congratulate the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), who is present and who was responsible for the original proposals, which went through the House of Commons and into legislation. I followed and supported his private Member’s Bill, turning up on a few Fridays to ensure that it ran the course. That might seem strange, because I represent a seaside constituency, but it is one that has a large agricultural hinterland. It was obvious to me, when he was promoting his Bill, that something needed to be done. I was acutely aware of a number of workers whom I saw around the town who were there illegally or were trafficked—they were certainly not treated at all well. In many cases, they were appallingly housed. In one celebrated case, a large number of Russians were found in a big house in Southport in conditions resembling the black hole of Calcutta. Those who were better housed might still be extraordinarily badly treated, with their rent often deducted from the pittance they were paid; every conceivable regulation for houses in multiple occupation was violated by gangmasters who often owned the property concerned.
It was also apparent to me at that time that there was some criminal involvement. Conversations that I had with the police and immigration authorities indicated that that was indeed the case. Clearly, from conversations that I had with valid employment agencies operating properly within the law, the situation was also a considerable restraint on their trade and was a problem in the labour market. As the hon. Member for Edinburgh South said, such people were breaching the law not only by using illegal labour but by not paying full taxation or proper national insurance. It was rather puzzling, when looking at the accounts of some large agricultural suppliers, as to how much they managed to get done with so few people seemingly employed on the books. That was before the Morecambe bay tragedy, which focused people’s minds on the seriousness of the issue and on how right the hon. Member for Paisley and Renfrewshire North was to bring it to our attention. Had people acted sooner, we certainly would not have had that tragedy.
I had a foretaste quite recently of what might still happen in the absence of a similar piece of legislation. Southport has a long history of shrimping, but we had a bonanza—almost a freak of nature—of cockles and other shellfish quite recently. It was a sudden surge, perhaps because of some tidal movement. However, it became well know that in the northern part of the constituency an awful lot of money was to be made from prestigious restaurants by going there quickly, taking appreciable risks and obtaining what was there. The local authority took the matter under control very effectively, but it was obvious in the circumstances that many strange people were suddenly showing up in town, and were prepared to take appreciable risks on behalf of themselves and those they employed in trying to obtain a quick financial return.
I wholly support the thrust of the legislation. As the hon. Member for Edinburgh South said, it prevents a number of wholly undesirable activities. It prevents people from being treated badly, and prevents abuse of health and safety legislation. It even saves lives. It is not an underestimate to say that lives would be put at risk in the absence of proper supervision of the gangmaster business. It certainly ensures that more taxes are paid than would otherwise be the case, and it goes a long way towards cleaning up the supply chain, which has been fairly murky in the past. I have no real evidence for this, but I am fairly confident that supermarkets were receiving vegetables that had been provided through gangmaster chains that required some inspection, to say the least.
At the moment, the Government are against red tape, as we all are. No one makes a case for red tape. The issue is what is meant by red tape. There is no clear definition. I am told by people in the Department for Transport that they were asked to look at traffic regulation orders as a sample of red tape, which shows how vague and blurred the definition is. If it means over-regulation and unnecessary regulation, we are against it in principle, but what we are discussing is not an example of that. There is clear evidence that an authority such as the GLA is needed, and I would be sorry to see it abolished.
The hon. Member for Edinburgh South has made a case for an extension of the GLA’s remit, and I am slightly wary of that. He drew a valid distinction between dealing with gangmasters as an industry-specific issue, and dealing with them in terms of the business model involved. My instinctive preference is to look at the industry-specific aspect.
Mr David Hamilton
I draw the hon. Gentleman’s attention to the construction industry. Many foreign companies come to the UK and bring their employees with them. The very problem of employment and accommodation to which he referred exists here now. Such companies give with one hand, and take away with the other. They pay wages to their employees, but then increase the rent for their accommodation. That happens now in the construction industry, and it goes against local British firms that are trying to get into the market and do a fair job with people they care about: their employees. The regulations should apply to foreign employers, and ensure that exploitation does not happen.
John Pugh
The hon. Gentleman has slightly anticipated me. There is a prima facie case in the construction industry, and there has long been a history of gangmaster behaviour, which used to be called the lump. Building firms sometimes employ people as a gang instead of employing them individually to avoid some of the penalties that might be incurred because work on a building site is intrinsically risky. A construction firm might incur liabilities, but sometimes, by arrangement, they fall on the gangmasters, who accept no ultimate liability whatever.
There is a decent case for including the construction and agriculture industries, but it becomes more difficult in the catering industry, which the hon. Member for Edinburgh South mentioned. We seem to be moving into territory where we may be imposing on an industry regulation that, strictly speaking, is unnecessary.
Ian Murray
Perhaps I could provide some clarification. I examined whether there should be an extension to other industries, but I particularly asked the Minister to examine whether it would be appropriate for the GLA to cover other industries, rather than saying that it should have a blanket involvement. I was asking for some proposals from the Government, and whether it would wise and prudent to do so.
John Pugh
The hon. Gentleman makes an entirely valid point. He is suggesting a benchmark or threshold that must be met before imposing additional regulation. Surely, that benchmark or threshold has been met in the agricultural industry. In my view it has certainly been met in the construction industry. Removing existing controls when there is clear evidence that they are needed would be regressive and wholly detrimental to the interests of British commerce and to the people who work in those industries.
Mr Graham Brady (in the Chair)
Order. It may help hon. Members to tell them that I am hoping to start the wind-ups at 10 minutes past 12. I believe that three hon. Members wish to be called, and if they are reasonably brief, they can all speak.
John McDonnell (Hayes and Harlington) (Lab)
I shall be extremely brief. I thank my hon. Friend the Member for Edinburgh South (Ian Murray) for introducing the debate. I know that it is customary to do so, but I genuinely want to. He expressed eloquently and concisely why we are here. I agree that any Government must regularly review the organisation of workers, so I welcome the review of the Gangmasters Licensing Authority, but it is important to consider very carefully its three aspects.
First, is the GLA still necessary? I do not know of any organisation or political party that argues that there is no longer a need for it. Employers have come forward to argue that there is a continuing need for it, as have trade unions across the piece, and many civil society organisations that helped us campaign for it to be set up. Anyone who doubts whether the GLA is needed should go on the website, which describes examples of continuing and horrendous exploitation, some of which have been cited today.
Sometimes in this House, we do not thank people enough. We have heroes among us today: those hon. Members who campaigned long and hard to achieve the breakthrough in the legislation that established the GLA. I want to put on the record my thanks to them on behalf of all those people who have enjoyed the benefits of the GLA so far. I chair the Public and Commercial Services Union cross-party parliamentary group that represents staff who work in the GLA. I have met the staff, and they have explained some of the issues that they have encountered, and some of the remedies that they have been able to introduce to tackle exploitation.
The first issue is that the need continues. The second is whether the GLA has the right powers and appropriate terms of reference. At one point, a lobby was building up, certainly in the farming community, which feared that the GLA might have too many powers, but that is wrong. The farmers are not inspected; the inspection falls on the gangmasters, not the farmers. There is no additional burden on farmers. The argument that is coming across is that those who work in agriculture have supported the GLA for its maintenance of standards and prevention of exploitation.
The issue that has arisen today is that the GLA has too few powers. It does not cover enough areas of industry. I understand the concern of the hon. Member for Southport (John Pugh) about creeping and additional red tape, but I want to give two examples of anomalies that arise when powers are ineffective. In one instances, GLA officers went to scrutinise the conditions of workers in a bottling factory. They could scrutinise the conditions of the workers who were bottling fruit juices from farm-grown crops, but they could not take any action for workers who were bottling water on the production line beside them. There are anomalies in the powers.
Another example is a gangmaster who was guilty of malpractice in the agricultural sector, and then boasted of moving into the care sector. I understand the concerns that have been raised, but as we review the GLA, we must state the criteria that determine whether we move into other sectors and industries. It is clear that we must overcome the anomalies of gangmasters being found guilty of malpractice in one area, and then setting up camp to exploit workers in another. What came out of discussions with staff on the ground and other organisations is that there are real difficulties in securing adequate prosecutions. We need to look at the GLA’s powers of investigation and its ability to prosecute.
My third point is about staffing resources and location. I agree with my hon. Friend the Member for Edinburgh South regarding location, that it does not matter which Department, as long as it does not go to a Department that does not give it sufficient priority. That is the anxiety about moving into the Department for Business, Innovation and Skills. There has been some argument about the merger of the GLA with the Employment Agency Standards Inspectorate. The worry about that is that that is an advisory body; it is not an enforcement and licensing authority. A merger of that sort, undermining the GLA’s licensing and enforcement powers, would be severely detrimental. It would certainly contradict the original intentions of the legislation. That is why there is a protection to keep it in the Department for Environment, Food and Rural Affairs, and why there is anxiety about any lessening of its role as a licensing authority.
There is also an issue about staffing and resources. The GLA, like every other Government body, has been subject to cuts, staffing freezes and so on. We have to be careful that the staffing cuts made so far or threatened in the future do not undermine the role of the GLA. I would welcome the Minister’s looking at that, so that the organisation is adequately staffed.
Finally, I want to commend the staff and management of the GLA for their excellent work. They have outlined some horrendous examples of gangmasters’ operations in this country. They have tackled them and won the support of employers and trade unions alike.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I congratulate my hon. Friend the Member for Edinburgh South (Ian Murray) on securing this important debate. I am concerned that, almost eight years on, we are still talking about the threat of the GLA legislation rights being diluted. That gives me serious cause for concern and I think we need to move forward.
I thank the staff at the GLA—in particular, the former chairman Paul Whitehouse, who got the agency up and running and hit the ground running. He has certainly done a very efficient job. I also thank the National Farmers Union. A strange coalition of trade unions came together to fight and organise for a GLA. I think that it was the first time that the TUC and the NFU have campaigned on the same side. The Transport and General Workers Union, as it was known then, was at the heart of the campaign, under its then national secretary, now my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who helped drive the legislation through.
The legal gangmasters also played an important role in introducing the legislation, as did the legal employment agencies that were right behind it from the start. There was cross-party support from Conservatives, Liberals, Labour and so on. That was extremely important. Last, but perhaps not least, we eventually managed to convince the major retailers that it was to their benefit to have some credible employment legislation and not to exploit farmers, as they were doing at that time. Eventually, they did come on board.
In practical terms, my contribution to the debate on migration and employment rights has been to take through Parliament the private Member’s Bill that became the Gangmasters (Licensing) Act 2004. I would like to run briefly through the main points of the Act, before I highlight some of the challenges that lie ahead in ensuring that the Act does exactly what it says on the tin and why it must be retained.
The Act introduced a licensing, registration and auditing scheme for the providers of agricultural and horticultural work, shellfish-gathering and in the food-processing and packaging industries. Many people think the Act was drafted as a response to the Morecambe Bay tragedy. That is not factually correct; it was drafted before that tragic event. However, the introduction of the Bill stands testimony, in memory of those poor Chinese people who died. That tragedy was the catalyst that made the Government of the time accept the Bill.
The Bill was drafted as a response to the deregulation that led to the loss of so many lives on the sands of Morecambe Bay. Years of deregulation had left rogue operators beyond the reach of the law and vulnerable workers, especially migrant workers, beyond the protection of the law. The Act was therefore designed to regulate the activities of gangmasters, to drive the rogues out of business, put the criminals behind bars and stop the exploitation of migrant and indigenous workers.
I will quickly walk through the details of the Act to show how it has delivered on its key objectives. First, we have always argued for the widest possible scope. That involves closing down any loopholes or rat runs through which rogue gangmasters might evade the law or escape licensing. The Act applies to the whole UK and, as I said, covers agricultural and horticultural work, shellfish-gathering and the processing or packaging of any products derived from those industries. It defines a gangmaster as anyone employing, supplying or supervising a worker in those sectors. It also applies to gangmasters, whether based in the UK or offshore, and all subcontractors. It also covers employment agencies and employment businesses if they operate in the sectors covered by the Act.
Secondly, we have always argued for a robust and effective body to regulate gangmasters and enforce the licence conditions. The Act set up the GLA, chaired by former Chief Constable Paul Whitehouse, and run by a board of key community and industry stakeholders, from Departments such as the Department for Environment, Food and Rural Affairs, the Department for Work and Pensions and the Home Office, and from enforcement agencies such as the Inland Revenue. It set licence conditions and the licence fee and established a public register of licensed gangmasters. It also has the ability to carry out investigations of abuse by gangmasters and the power proactively to enforce the licence conditions, with a line of accountability leading from the GLA, through the Secretary of State to Parliament.
Thirdly, the Act provides for effective enforcement by creating offences that will help to bring about a real culture change in the industry. The offences are operating without a licence, obtaining or possessing a false licence, using an unlicensed gangmaster and obstructing an enforcement officer. The Act also amends the Proceeds of Crime Act 2002, so that the assets of convicted gangmasters can be seized, and it also amends the Police and Criminal Evidence Act 1984 to make operating without a licence and possession of a false licence arrestable offences.
The Act carries penalties with real deterrent value: 12 months in prison for operating without a licence or possessing a false licence; up to two years’ imprisonment for a second offence; and up to 10 years’ imprisonment for a third offence. Out of the 30 sections of the Act, section 26 may be the most important in protecting migrant workers:
“A person is not prevented from being a worker for the purposes of this Act by reason of the fact that he [or she] has no right to be, or to work, in the United Kingdom.”
In other words, regardless of whether a person is regular or irregular, documented or undocumented, indigenous or migrant, if they work in the areas covered by the Act, they are legal workers.
Not only are people protected by the conditions attached to the gangmasters licence, but they are also entitled to the rights and protections offered by UK employment law. Under the Act, there is no such thing as an illegal worker—a worker is a worker is a worker—and that is a huge advance in the rights of migrant workers in this country. It is also an important step on the road to building a just and humane system of managed migration.
That is what the Act does and how it works. However, getting an Act on to the statute book is not the end but rather the beginning of the process. If this country is to prosper economically, socially and culturally, we must have a just, humane and well-managed migration policy. A key ingredient of such a policy must be the opening up of legal routes for migration by ensuring that every migrant worker who comes to the country can earn a decent living in well-regulated, safe jobs that are free from exploitation. The Gangmasters (Licensing) Act 2004 is legal proof that we have the political will to do that in the UK. We do not have to let vulnerable migrant workers fall prey to criminals who run the black economy, and that is not only my opinion, but that of legal businesses that operate in the industry.
I am conscious of the time, Mr Brady, and that other hon. Members wish to speak. I will therefore conclude by saying that there is an overwhelming case for the Act to be extended, starting with the construction industry—my hon. Friend the Member for Midlothian (Mr Hamilton) spoke about the problems faced by legal employers in that area. There is also an argument that exploitation takes place in the service industry, and many of the main hotels in the country will be staffed by illegal migrants or people who have been organised by gangmasters. There is therefore an overwhelming case, not only in the construction industry but also in the service sector, that if we are to be a decent country that treats people with respect, the Act should be extended to other industries.
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Brady, and I pay tribute to my hon. Friend the Member for Edinburgh South (Ian Murray) for initiating this debate.
I want to tell a story about what happened in February 2008. Five years after the Morecambe bay tragedy, a commemorative event was organised by the Chinese community in London. Given my involvement in the Gangmasters (Licensing) Bill and its passage into law, I was asked to attend. Two young Chinese women read out letters from relatives of those who had died at Morecambe bay. I do not mind admitting that I, together with everyone else, was in tears as we heard heartbreaking stories of Chinese workers who had come to build a new life in Britain, ringing home on their mobile phones. One story in particular always sticks in my mind. The daughter said: “He was weeping. He asked me to quickly get his mother and his wife. He wanted to say farewell because the water was lapping at his chest. He knew that there was no way out and that he was about to die.”
My hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) did the cause of social justice in Britain an outstanding service by taking through the Bill, and he is right to say that its origins predated Morecambe bay. However, the appalling tragedy of February 2003 brought together the country, all political parties, communities and the industry, to ensure that never again would we have a Morecambe bay tragedy. There was a remarkable coalition of support from Plough to Plate and the National Farmers Union to the supermarkets, and there was also a remarkable all-party coalition. I remember appearing on many platforms with my hon. Friend the Member for Paisley and Renfrewshire North and with Gillian Shephard, who was then a Member of Parliament and spoke in support of the Bill.
At the time, I was deputy general secretary of the Transport and General Workers Union, and I saw an utter determination across party politics and throughout the industry to end modern day slavery and ensure the fair treatment of workers and fair competition. There were honourable gangmasters such as Zad Padda, who spoke out and complained bitterly about how difficult it was to be a reputable gangmaster in what he described as a jungle. Workers were not only treated unfairly, but reputable gangmasters were undercut. The legislation sought to reassure decent farmers that they were using reputable gangmasters and assure shoppers in supermarkets that the goods they were buying were not the product of modern day slavery. It was the most complex private Member’s Bill in 30 years, but it became law.
[Jim Dobbin in the Chair]
I was privileged to be asked by Members from across the parties, and by the industry, together with the then president of the National Farmers Union, Tim Bennett, to appoint the first chairman of the Gangmasters Licensing Authority, Paul Whitehouse. He is a remarkable man who provided outstanding leadership in setting up what was, without doubt, the most effective of the enforcement agencies. It was governed by a board that brought together the other enforcement agencies and the totality of the industry.
The track record of the Gangmasters Licensing Authority is remarkable. The Hampton review pointed out that it has been impressive given its size, and indeed it has. Its achievements in raising standards throughout agriculture and fisheries were welcomed by the overwhelming majority of gangmasters, including the Association of Labour Providers. The authority has rightly driven rogues out of the industry, and recovered millions of pounds for the public purse, including by combating tax avoidance.
The Equality and Human Rights Commission was right to say that the Gangmasters Licensing Authority is the most effective of the enforcement agencies. Its approach to raising standards has been positive and underpinned by the unmistakable message that has been sent to rogue gangmasters and disreputable farmers—there are some—that if they break the law, penalties will be rigorously enforced.
If the Gangmasters Licensing Authority was powerful in the past, it is all the more powerful now because of the issues that it is tackling, which include labour and human trafficking. It works in close consultation with agencies that range from the Home Office to the police. Given the reasons why the GLA was set up, its success and the issues that it now tackles, it seems extraordinary that we should need such a debate because of the red tape review. We should start by celebrating the success of a remarkable organisation and ensure that it has continuing resources to do its job. We should not debate scaling back the Gangmasters Licensing Authority, but consider how we can make it yet more effective and extend its powers and scope.
I take the point that such decisions should be evidence-based. If we consider the evidence, however, there is a powerful case for extending the authority of the GLA into the construction industry. Evidence suggests that the same gangmasters found in agriculture and fisheries also operate in construction. Powers, including the ability to impose civil penalties, should make it easier for the GLA to act against disreputable gangmasters and recover moneys for the public purse. That is the debate that we should be having; we should not have to defend the GLA in the way that I am doing, albeit proudly. I therefore hope that the Government will seriously reflect on the red tape review and put beyond doubt any question mark over the future of the GLA.
Jim Sheridan
I suppose that it is right and responsible that we always check red tape. That is being done through the red tape challenge, the red tape review or whatever it is called. However, I am not aware of a single employer, during the time that we were negotiating, raising objections to the Gangmasters (Licensing) Act 2004. Perhaps through my hon. Friend, I can ask the Minister whether there is any evidence of a single employer who has asked for the 2004 Act to be rescinded or for the authority to be merged into some obscure department.
Jack Dromey
My hon. Friend makes a very powerful point. I remember a meeting in the House during the passage of the Bill that he addressed. I chaired the meeting. Sitting to my left was Gillian Shephard. Sitting to my right was the president of the National Farmers Union. Sitting to his right were two senior chief executives of two of the major supermarkets. Sitting to Gillian Shephard’s left were two gangmasters. It was a remarkable meeting. All of them were saying the same thing—the time had come to tackle what was a jungle, characterised by serious exploitation, because it shamed our society, and together we were determined to act to end that modern-day slavery.
The debate should be about considering how we make an outstanding organisation yet more effective, tackling exploitation wherever there is evidence of it, including in other sectors, and following the evidence into those sectors—the case in relation to construction is particularly powerful.
I will conclude by saying—this is not aimed at the Minister here today—that I have sometimes been involved in debates with Ministers who, when the word “regulation” is mentioned, hold up a clove of garlic in one hand and a cross in the other. Unashamedly, this debate is about regulation, but this regulation is right. It is effective. It tackles extreme exploitation. Ultimately, the debate is about what kind of society we want to live in. If what happened at Morecambe bay shamed Britain, there should be an utter determination to say, “Never, ever again.”
Jim Dobbin (in the Chair)
I intend to start the winding-up speeches at 12.10 pm
Mr David Hamilton (Midlothian) (Lab)
I will not take up much time, Mr Dobbin. I did not intend to speak, because the previous contributions were so good, but I would like to make one or two points. We all come to the House with our own experiences from the lives that we led before becoming Members of Parliament. That is one of the characteristics that is strong in Parliament. I came here with nearly 20 years’ experience as a coal miner. The comparisons between the mining industry and the construction industry are stark. They are very similar, in that the numbers of deaths and injuries in each are extremely high. Like my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Paisley and Renfrewshire North (Jim Sheridan), who spoke before me, I do not lean away from regulation. Regulation saves lives in many areas, and the construction industry is one of the areas that I believe is very important.
I take the point made by my hon. Friend the Member for Edinburgh South (Ian Murray), who initiated the debate, that the GLA should follow the evidence that comes forward. I will just make one or two observations. When I was unable to get my private Member’s Bill through—technically, it is still there, but I think that I am about 120th or so in the list—among the examples that I intended to raise was Pure Recruitment Solutions, based in Glasgow. Its licence was revoked in 2008. However, the company still operates and provides labour to a number of sectors, one of which is construction. The same is true of Prestige Recruitment Ltd. Its licence was revoked in 2007, but it still operates in a number of sectors, including construction. It is also true of Victor Wolf Ltd, which lost its licence in January of last year, and of ASAP Recruitment, which lost its licence the year before. It still works in various sectors, but not in agriculture.
The fact is that we close companies down in one sector and they re-establish themselves in another. I refer to construction unashamedly, because I strongly believe that the number of deaths and serious accidents in the construction industry can be reduced if regulation is applied. The regulation is supported by the representatives of the workers and by the honest employers in the construction industry. I meet them regularly, as other hon. Members must. People can go round the businesses in my area, where the building sites and so on are. Subcontractors are, by nature, local firms. However, in many cases, the subcontractors are being squeezed out of the market simply because labour is being brought in from other places. Bed and breakfast is included for those workers; their board and so on is included.
I remember my father telling me about the situation in the mining village of Newtongrange. Images of it can be seen in the Scottish mining museum. I am talking about a time just before the second world war. A person called Mungo Mackay owned all the houses in Newtongrange. He was also the coal owner. He gave the miners a rise and then put the price of bread up in the shops and put the rent up. It was a case of giving with one hand and taking away with the other.
The people who are being exploited today are the foreign workers who come in, but the situation is also completely unfair to local employers. It is about time that we recognised that if we want to make progress in this country and create an environment that is worth working in, we must ensure that the honest employers are protected and protect the workers at the same time.
I wanted to make one or two points, because the 2004 Act is under threat. We should be looking at extending the Act, not reducing it. We should be ensuring that we protect British workers. Disasters happen because of a sequence of events. I fear that one of these days there will be a disaster in the construction industry and then people will be concerned. I was part of the Bill that went through Parliament; my hon. Friend the Member for Paisley and Renfrewshire North allowed my name to go down. I question whether the Bill would have been able to go through if the disaster in Morecambe bay had not happened. The reason why it received support across the board was the disaster that happened at that time. If it had not happened, there might have been difficulties in getting the Bill through. I do not want the same to happen in the construction industry. There are deaths and serious accidents in the construction industry on a regular basis. The numbers will grow if employers are unregulated. They will exploit that avenue. We should not be allowing that to happen.
John Pugh
In the run-up to the Olympics in Athens, many lives were lost on the building sites. In the run-up to the Olympics in London, no such event or no event of such a size has taken place. Does that not help the argument that regulation on British building sites is at any rate better, if not good enough?
Mr Hamilton
There were a number of reasons for that. I can give the example of the headquarters of the Royal Bank of Scotland—admittedly, that is not the best subject in the world to be talking about at present. Only one accident happened there, and the reason why only one accident happened was that at the beginning the contractor who got the contract sat down with the work force and the trade union movement and agreed with all the subcontractors a strategy whereby accidents were unacceptable. The problem is that very few employers of that magnitude take that view. That employer did it, and better than that, it was able to prove that the contract came in under budget and under time.
Let me contrast that with the Scottish Parliament. The Bovis company was running things at the Scottish Parliament. If someone walked on to the Scottish Parliament building site, they would hardly find an English-speaking worker, yet the signs were all in English. They had to go to serious classes and there were a number of accidents at the Scottish Parliament.
There are good employers and there are bad employers. I do not criticise all employers. However, if we un-regulate or do not regulate and employers recognise that there is a gap, they will go to that gap.
Jim Sheridan
We have been exceptionally lucky not to have had a Morecambe bay disaster on the Olympic site, but we cannot forget the fact that the number of deaths in the construction industry is rising. We must keep that at the forefront of our minds.
Mr Hamilton
I will just add this, Mr Dobbin. The other side of the coin is that every serious accident is one step away from a death. It should be recognised that the number of deaths could increase quite dramatically. I am an ex-miner. I recognise that disasters happen because of a sequence of events. I do not want such a sequence of events to happen in the construction industry, and one way of ensuring that it does not is by telling bad employers, “You’re not welcome.”
Huw Irranca-Davies (Ogmore) (Lab)
I am pleased to speak in this timely debate. I thank all hon. Members for their contributions to it, and I particularly thank my hon. Friend the Member for Edinburgh South (Ian Murray) for introducing it. The red tape review is going on, and the Minister will have taken note of the passion and expertise among Opposition Members, who have spoken strongly of the support across parties and across civic society for the introduction of the original legislation, and I am sure that that support remains. He will have taken note of the genuine ambition that he should ensure that there is no diminution, weakening or dilution of the GLA as currently structured, and that, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, the licensing regime’s proactive enforcement is not watered down.
We have had a good debate about where we go from here. That has been the nature of the debate; we are not trying to find the be-all and end-all solution. I hope officials and the Minister, in carrying out his departmental responsibilities and in his wider discussions across Whitehall, will take some of our messages away with them.
My hon. Friend the Member for Edinburgh South made an all-encompassing and powerful contribution. He put the case exceptionally well, and I will come back in a moment to some of his points. My hon. Friend the Member for Hayes and Harlington (John McDonnell) referred to his role as chair of the PCS union group; I have previously engaged with him in that role. I commend him on his work, and on the constructive way in which he has always represented the interests of PCS union members. As my hon. Friend has shown, they can make a contribution to ensuring that we have better workplaces and better ways of working.
My hon. Friend referred to the criteria by which we could judge whether the GLA should move into other sectors. That is the sort of issue we need to debate. Under what circumstances, and judged against what criteria, could we say that the GLA’s great success, testified to today, could be replicated in other areas into which the evidence leads it?
My hon. Friend referred to the fact that licensing and enforcement powers are critical, wherever they are located in government. There is an active debate about what the most appropriate place is—concerns have been raised about whether the Department for Business, Innovation and Skills would be the right place—and whether the GLA’s core values would be best preserved in a Department that is simultaneously trying to drive down regulation.
The point was well made in the debate that there is good regulation as well as bad regulation. The great benefit of the way the GLA has been constructed and the way it has acted over the past few years is that it does the right thing in the right place at the right time. If hon. Members will excuse the comparison, it punches like a good Welsh bantam-weight—well above its weight. It has relatively few resources, it is very fleet of foot and it really packs a clout.
Tribute has rightly been paid to my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) for introducing the original private Member’s Bill, and for the work that he and others did to build tremendous consensus, which is sustained today. He referred to the necessity of proactive enforcement, and that is key. He put the case very well.
My hon. Friend the Member for Birmingham, Erdington, has a great background in this issue, not as a Member of Parliament, but as part of the wider civic engagement through the trade union movement. He reminded us that behind all the debates about where the GLA goes is the human tragedy that inspired it, and that necessitates its continuation in a dynamic, proactive form. He talked about support extending from plough to plate, across all parties and across society. He also said that we can look at using the model we have to end the scourge of modern slavery, which still exists.
The GLA, which was established in 2004, was designed to do a number of things. One was to establish a level playing field across industry, so that we could avoid undercutting and take out rogue operators. It was about improving the working lives of the vulnerable, and its success in doing that has been proved. It was also about assisting in the battle against criminality and human trafficking.
It is important to set out the GLA’s successes, and we heard earlier about its measurable, tangible successes. The annual report for 2010-11 showed that 845 cases of worker exploitation were identified in that year. Some 91%—that is, 78 cases—of the GLA’s intelligence-driven operations identified serious cases of non-compliance. Thirty-six cases of unlicensed activity were uncovered, and 33 licences were revoked, with 12 successful prosecutions. The case for the GLA continuing its work is therefore still crystal clear; abuses are still happening. Even with the GLA’s dynamic, fleet-of-foot approach and proactive enforcement, there are still cases out there to be pursued and prosecuted.
The GLA has had a significant wider impact because of its deliberate efforts to go after high-profile cases with a high media impact to get the message out to rogue employers that they cannot continue doing what they are doing. That has been very successful.
There has been continuing support for the GLA. When surveyed in 2008, eight out of 10 respondents said they were in favour of licensing, while seven out of 10 felt the GLA was doing a good job. Only 18% described contact with the GLA as being in any way burdensome.
In that respect, does the Minister have a view about the GLA’s role on forestry? There has been great discussion with forestry employers and unions about whether forestry needs to be retained in the remit of the GLA as currently structured. Some have put forward the view that certification means it is very difficult to find unregulated, rogue operators in the forestry regime. Does the Minister think there might not be a case for forestry remaining in the current structure? I would be interested to hear his views on the issue, and particularly what discussions he has had on it with the unions.
Let me turn to the question of whether the GLA is efficient as well as effective. There is no doubt that it is effective. As to whether it is efficient, the organisations using the GLA as an example of how to implement an efficient regulatory control framework include not only the TUC, but the Joseph Rowntree Foundation, with its research reports, the Centre for Crime and Justice Studies, Oxfam, the Wilberforce Institute for the study of Slavery and Emancipation, the International Labour Organisation, the Organisation for Security and Co-operation in Europe, the Dutch national rapporteur on trafficking and the Harvard university programme. One after the other, they line up to say that the GLA is not only effective, but efficient. It does what it does leanly and with minimal resources. If it works so well, my question to the Minister is: why would the Government tinker with it without a darn good reason?
That is before we look at the issue of where the GLA should go now. In one sense, the debate is about the future of the GLA as currently formed and in the sectors it currently looks after. In another sense, it is about where the GLA goes from here. As we have heard from hon. Members, the TUC and others believe that there is a strong case for extending the GLA licensing scheme, and the Select Committee on Home Affairs said the same in its report on the issue.
Baroness Kennedy’s report for the Equality and Human Rights Commission commented:
“Another problem is that the remit of the GLA is currently confined to the oversight of labour in the food and agricultural sectors, while exploited foreign labour may now be found in the service and construction industries as well as in care homes. In our evidence-gathering it became clear to us that there seemed to be no good reason for the vital work of the GLA not being expanded to include these other sectors and to cover other forms of contract employment and outsourced work, and that employers who used such labour should hold some responsibility for wages and conditions.”
There have been other reports, such as Oxfam’s “Turning the Tide: How to best protect workers employed by gangmasters, five years after Morecambe Bay”. We have also had the TUC’s commission on vulnerable employees and the Health and Safety Executive’s report on deaths in construction, “One Death is too Many”. They all proposed that the scope of the sectors covered by the GLA should be under consideration for extension.
Finally, I recommend that the Minister reads, if he has not done so, the report by the TUC and the Union of Construction, Allied Trades and Technicians, “The Hidden Workforce Building Britain”. One of the many examples in it concerns a UCATT investigation in July 2008, which showed that on a private finance initiative hospital site in Mansfield, workers were being paid a total of £8.80 for a complete 40-hour week. The union took the case to the employment tribunal. It was contested. The company is a large one, by the way, which carries out many large public sector contracts throughout the UK. It, of course, insisted that the workers were self-employed and did not come under the national minimum wage regulations. On and on it went. The GLA would be effective for that sort of anomaly.
The debate is a genuine one. We want the GLA to be safe in its current form, not weakened; and we want to ask what consideration is being given in government and Whitehall to extending its remit, and how that would happen. Where would that remit go, and is anything happening at the moment? There is strong support for the Minister to take the matter forward proactively, rather than simply putting it under the banner of the red tape review so that the GLA becomes diminished without our even considering its success and whether it should be taken further.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I start by paying tribute to the hon. Member for Edinburgh South (Ian Murray) for raising this important matter. I am desperate not to sound patronising; it is in the finest tradition of this House, when the Government are considering a way forward, for the Opposition—rightly—to push their view and to push the Government in the direction they want.
It has been a useful debate and a very good one, showing the passion that surrounds the issue, and reminding us that the Gangmasters Licensing Authority was created at the time of an appalling tragedy, which we must never forget. We narrowly avoided a repeat this year in the Ribble estuary when there was a bonanza—a sort of Klondike operation—for cockle-picking. Interestingly, as my hon. Friend the Member for Southport (John Pugh) said, the GLA worked well in those circumstances with the local authority, the Inshore Fisheries and Conservation Authority, the police and the Marine and Coastguard Agency to close down that activity. I deeply regret that the fishery had to be closed, but it was necessary because of the activities of certain people; in many cases it was individuals who were involved, but there was also some evidence of illegality. That is an example of the GLA working well with other agencies.
I am pleased to have a debate today about the future of the GLA. It is a body that the Department for Environment, Food and Rural Affairs sponsors because its remit is focused on agriculture and food processing. As has been mentioned, normally the Minister of State would have responded. However, today is a significant one in the farming calendar and he is attending the National Farmers Union annual conference in Birmingham. So, too, is the Secretary of State, who made a keynote speech at the conference this morning. In that speech she announced the publication of our response to the farm regulation taskforce.
As hon. Members would expect, the taskforce, which was chaired by Richard Macdonald, had a very informed view about the work of the authority and made recommendations on how the GLA might be improved. The GLA is also subject to continuing Government reviews, including one on workplace rights compliance and enforcement, and the red tape challenge, which have been mentioned by hon. Members. The review process is under way and the views that have been expressed today, very eloquently, will be considered as part of that. We have already announced, and confirmed in our response to the farm regulation taskforce, that we endorse the need for the GLA to enforce protection for vulnerable workers in the relevant sector—those who are least able to take action on their own account. I hope that that offers some reassurance to hon. Members.
I want to take up some of the points that were made, and I have already alluded to cross-agency working; we must not think that the GLA operates in a bubble. It is vital, particularly when it works in areas of high criminality and large amounts of money—where there can be criminality through the supply chain—that it should work with other agencies. That holistic approach is important. The hon. Member for Wrexham (Ian Lucas) talked in an intervention about health and safety legislation and I would link that with the point made by the hon. Member for Birmingham, Erdington (Jack Dromey) about regulation and where the Government sit on those two matters. I assure him and other hon. Members that there is no clove or garlic or cross in my hand. We are not talking about no regulation, or less regulation per se; we are talking about better regulation. We are not talking about ending health and safety legislation through any Government review or challenge. What we want is regulation that is better, more fleet of foot and less cumbersome, but also effective. We want to provide that for employers, who will hopefully, in the future, employ people who are currently unemployed; and we want it to be part of the rights of workers, wherever they come from.
We will continue to look at what more the GLA needs to do to tackle non-compliant high-risk operators while also reducing unnecessary burdens on those who are compliant. Those are complementary and mutually reinforcing goals, which we are keen to bring about. We are actively looking at what needs to be done to ensure that they happen. We are not—with respect to the GLA and employment law more widely—removing essential protections for vulnerable workers. What we are doing is about ensuring that there is a legislative framework that safeguards workers’ rights while reducing onerous and unnecessary demands on business. I hope that hon. Members understand that. That is surely an objective we all can, and should, share.
It is also important that the GLA should continue to be supported by industry, including by retailers who work with the authority because they want to maximise assurance about the proper working of the supply chain. I entirely take the point that was raised by hon. Members about good farmers, employers and businesses being disadvantaged by those who act illegally. It is important that we understand that. The GLA should also be supported by labour providers and other employers, who need to be able to operate on a level playing field, where good employers are not undercut by those who seek to gain a competitive advantage by flouting the law and taking advantage of their workers.
I am happy to recognise that the GLA is widely regarded in many circles as having brought about significant improvements to the treatment of the most vulnerable workers in the areas it regulates. I join the hon. Member for Hayes and Harlington (John McDonnell) in paying tribute to the staff of the GLA, and to those who were at its birth and campaigned for it. Often the workers about whom we are concerned share a number of common factors: they have no fixed place of work; they are located in rural and less accessible settings; they are undocumented and often unsupervised labour; they are low-skilled migrant workers with little or no working knowledge of English, and accommodation or transport is provided as part of their employment. However, the GLA’s experience of operating under the terms of the Gangmasters (Licensing) Act 2004 suggests that there is room for a number of improvements. It is clear, for example, that there are areas that it covers that are dominated not by the presence of vulnerable workers who are at risk, but by skilled workers who are articulate and more than capable of enforcing their own employment rights.
Richard Benyon
I am conscious of the time, and I want to get on to the point about the construction industry, if the hon. Gentleman will forgive me.
The issue I have just outlined is one of those that we want to look at in more detail as part of the ongoing red tape challenge process. We want to come forward with proposals on it in due course. Building on the successes it has already had in improving its operations, the GLA is running its own pilot project in the forestry sector, designed to apply a light-touch enforcement approach. To answer the point made by the hon. Member for Ogmore (Huw Irranca-Davies), the forestry regulation taskforce will report shortly, and make some recommendations, which will no doubt be of great interest to him.
There was some talk in the debate about the construction industry, which is obviously not an area covered by my Department. However, the industry has made significant improvements in the past 10 years in the number of serious accidents and fatalities. I cannot say that about agriculture, which is the industry I come from. I am not proud of that. I am happy to debate the issue when we have more time, but the Government are considering the issue of enforcement as a whole, across Government. No doubt the statistics will be part of that. We are not talking just about safety in the sense of health and the number of fatalities in an industry, but about exploitation, which is more complex and requires a more nuanced approach. There is a lack of hard evidence about employment abuses in construction. It does not feature in the Low Pay Commission’s top 12 low pay sectors. According to data from the annual survey of hours and earnings, only 0.7% of construction workers were paid at the national minimum wage rate in April 2009. Pay is sometimes below union-negotiated rates but above the minimum and not illegal. The issue then is not about extending the scope of the GLA—
Child Benefit
(12 years, 9 months ago)
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Mr Christopher Chope (Christchurch) (Con)
The purpose of this short debate is to use the force of argument to put further pressure on the Government to abandon their policy of taking child benefit away from children who have a parent who is a higher rate taxpayer. I also wish to address the alternative approaches if the Government wish to raise even more money from higher rate taxpayers.
Last Thursday, the lead in The Daily Telegraph was, “Penalty for paying off student loan early is lifted.” The following words were attributed to a Downing street source:
“This is hopefully good news for tens of thousands of families, as well as many Conservative MPs who had raised concerns about the penalties.”
I congratulate and thank the Prime Minister for having responded to those concerns, which I and many others had expressed on that issue. I hope a similar response will be forthcoming to the even greater and more widespread concerns that are the subject of this short debate.
I recognise that a substantive response may have to wait until the Chancellor’s Budget speech next month. I can assure him that all MPs will be raising their papers if he is able to use similar phraseology about good news for families and Conservative MPs. One essential difference between the two issues is that the removal of child benefit from higher rate taxpayers is something that concerns many more MPs, not just Conservative MPs but MPs right across the house. Many more families are affected as well—anything between 1.5 million and 1.8 million families with, collectively, about 3 million children.
There are relatively few political issues on which, over the generations, there has been a cross-party consensus. One issue is the support for the principle of a universal, non-taxable cash payment for families with children. That is now known as child benefit, which was initially introduced in 1977. Child benefit replaced child tax allowances, which dated back to 1909, and family allowances, which were introduced following the Beveridge report in 1946.
Beveridge regarded a universal system of children’s allowances as a fundamental plank of the welfare state, providing
“help to parents in meeting their responsibilities, and as an acceptance of new responsibilities by the community.”
Beveridge did not support the means-testing of children’s allowances any more than he supported means-testing for access to NHS services.
When child benefit was introduced by the Labour Government, it enjoyed all-party support. Indeed, its introduction proceeded despite the desperate financial crisis at that time, in 1976-77, when this country was under the cosh of the IMF—the IMF was effectively running the Treasury. No politician at that time made the argument that the Chancellor of the Exchequer did in the House on 20 October 2010. He said:
“The debts of the last Labour Government, and the need to ensure that the better-off in society also make a fair contribution, make this choice”—
the removal of child benefit for families with a higher rate taxpayer—
“unavoidable.”—[Official Report, 20 October 2010; Vol. 516, c. 959.]
We have afforded universal benefits for children in families from 1976 to the present day. The state has grown in size since then. Why are we talking about removing this universal benefit at this stage? In my submission, it is avoidable, and must be avoided.
To emphasise just how far the Government are now proposing to go to destroy the previous consensus, it is worth noting that the Child Poverty Action Group, which supports universal child benefit, says:
“Those with children have higher costs than those without and they need additional support at whatever level of income they live on.”
Margaret Thatcher’s Government described child benefit as simple, well understood and popular. Indeed, it has a take-up rate of over 97%.
There was no hint at the last general election that the consensus would be broken. Conservative party policy was set in stone. Indeed, the Prime Minister, as Leader of the Opposition, made this boast:
“I want the next Government to be the most family friendly Government we’ve ever had in this country.”
At a public meeting in Bolton on 5 March 2010, he said that he would not “change child benefit”. He was undoubtedly taking a leaf out of the then shadow Chancellor’s book who addressed the matter at the Conservative party conference on 6 October 2009. He said:
“We will preserve child benefit”.
The early decisions of the coalition Government announced in the June 2010 Budget were consistent with those promises. In his Budget speech, the Chancellor said that
“we have decided to freeze child benefit for the next three years. This is a tough decision, but I believe that it strikes the right balance between keeping intact this popular universal benefit, while ensuring that everyone across the income scale makes a contribution to helping our country reduce its debts.”—[Official Report, 22 June 2010; Vol. 512, c. 173.]
Mr Chope
I will not give way. I want to put my points on record, and it is a very short debate. If I have time later on, I will take some interventions.
The Prime Minister and his predecessors have so frequently professed their support for “hard-working families” that the expression has become a political cliché. How extraordinary, therefore, that the Government are still persisting with a policy that will undermine those hard-working families, especially those families in the squeezed middle. What families could be more hard working than those 55,000 or 60,000 single parent families where the lone parent works long hours in a demanding job to earn more than £43,000 a year, thereby qualifying as a higher rate taxpayer and a victim of this policy? Such families also often have very high child care costs. In the league table of hard-working families, they are closely followed by two-parent families where the breadwinner supports a spouse who cannot work, whether because of disability, long-term sickness or the need to support a child who is disabled or sick.
A family in the last category came to my constituency surgery in autumn 2010 and impressed on me the utter folly of the Government’s proposals. I then engaged in correspondence with the Treasury. On 18 January 2011, the Exchequer Secretary responded to my letter of 16 October—the fact that it took three months to get a response indicates something—in which I had specifically asked the Chancellor about the impact of his policy on those in receipt of carer’s allowance. My constituent’s wife earns slightly above the higher rate threshold, while he stays at home to look after his two children, one of whom has Down’s syndrome. The point that I wished the Chancellor to address was my constituents’ concern that in households where, through circumstance rather than choice, only one parent is able to work, the higher rate tax payer is normally compensating for the lack of earning capacity of the other. As my constituents said:
“This penalises families of those who live the true spirit of social responsibility each and every day.”
After a three-month delay, I received my reply; I had hoped for a better response. It merely asserted that the policy is tough but fair and that affected families are within the top 20% of the income distribution of all families. I immediately wrote back asking my hon. Friend the Exchequer Secretary to address specifically how the impact of the proposals on families such as that of my constituent could be regarded as fair. I am sorry to say that it was another three months—on 12 April—before my hon. Friend replied. He said:
“Inevitably, introducing a simple change to a universal system can create some difficult cases and it would unfortunately be difficult to create an exception for families where one partner is a carer.”
He repeated the assertion that the Government believed the policy to be fair, but how can it be fair to target such families, by asking them to make a greater contribution to reducing the deficit, while exempting families with earnings of up to £84,000 a year that are spread equally between both parents?
Fewer than one in 10 of the families from whom child benefit is to be taken away contain two higher rate taxpayers; I think that the number is 130,000 families. Almost all the remainder, therefore, will or may be in a weaker position to bear such a loss of benefit than those households with two persons earning up to £84,000 a year between them.
When I corresponded with the Treasury, the threshold for higher rate tax was £43,876. Since then, despite rising inflation—there has been a 3.1% increase in the retail prices index in the last year—the starting rate for higher rate tax has been reduced by £1,400, while the threshold for 2013-14 is still unspecified. Therefore, even more families will be affected by this change than was originally envisaged.
The policy that we are discussing today has never been properly thought through. By all accounts, it was included in the Chancellor’s speech at the 2010 party conference at the last minute, after an earlier plan to announce the withdrawal of child benefit from all children over the age of 16 was scrapped. That is why the early estimate of the contribution that this policy will make towards reducing the deficit was £1 billion. That early estimate was wrong, but in typical Treasury fashion the Government now say that anyone who opposes the withdrawal of child benefit must come up with an alternative means of producing £2.4 billion a year to go towards deficit reduction.
It is worth reminding ourselves that families are already contributing to the reduction of the deficit through the freezing of child benefit. That policy alone will save about £1 billion in 2013-14 and the total contribution that it will make during the three-year freeze is about £3 billion. In addition, many of the families who are affected by withdrawal of child benefit will lose £550 a year in basic child tax credit from this April onwards.
In responding to this debate, I expect the Minister to argue that he is in pre-Budget purdah and that he will treat what I have said as a representation, but I want him to say specifically why the Government’s proposal to increase the tax burden on hard-working families is not being defined as a tax increase but as an expenditure reduction. We know that the Chancellor has always been keen to present his deficit reduction plan in terms of achieving a fair balance between Government expenditure reductions and tax increases. Without getting into an argument about the extent to which the original target of expenditure reductions has been missed, I must ask: is it not disingenuous to regard the withdrawal of child benefit in terms other than a tax increase? After all, the antecedents of child benefit lie in the concept that there should be a higher tax allowance for those with dependent children than for those without dependent children. In essence, the Government’s policy is to remove that tax allowance and thereby increase the tax burden.
Steve Baker (Wycombe) (Con)
My hon. Friend makes a powerful case. Does he share my inclination to believe that the Government might be able to extricate themselves from the set of powerful problems that he describes through some combination of a transferrable child tax allowance and the universal credit system?
Mr Chope
My hon. Friend makes a really good point. Many of us thought, because we went into a general election committed to having transferrable tax allowances and to promoting family values, that those allowances would be implemented. Although there was provision in the coalition agreement for the Liberal Democrats to abstain or vote against those allowances, it was expected that the Conservatives would introduce them and that the House would have an opportunity to judge them.
A lot of the difficulties that have been brought about as a result of the analysis of the proposal to remove child benefit come from the fact that we have abandoned the idea of using the tax system to say, “Well, if you’ve got two equivalent families, one with three or four children and the other without any children then the costs of the family with children must be greater than those of the family without children, and therefore there should be a greater tax allowance for the family with children than for the family without children.” That is the basic principle. We could have restored it or indeed enhanced it by having transferrable tax allowances, which was a commitment in our manifesto.
What depresses me, however, is that in the 16 months since October 2010, when the original proposal was made by the Chancellor, nothing seems to have been done to take forward those issues and to try to find a fair solution. Obviously, implementing something like transferrable tax allowances would take some time; we would need to have draft legislation and any such allowances probably could not be implemented by January 2013, when the Government have committed themselves to impose this burden on higher rate taxpaying families.
The Government have missed a big opportunity on transferrable tax allowances, and I hope that my hon. Friend the Minister will have time to explain why that happened—because, as I have said, introducing those allowances was a Government policy that had been announced—and also why the Government recently reconfirmed that they have no intention whatsoever of proceeding with transferrable tax allowances.
I will give my hon. Friend the Minister some time to respond to this debate, but I should like to make some other points. I think that the Liberal Democrats are rather in favour of the policy of withdrawing child benefit from higher rate taxpayers, because they want to remove as many tax benefits from higher rate taxpayers as possible. But of course the Liberal Democrats would also like that policy to be dressed up as an expenditure reduction, because that expenditure reduction would be balanced with a tax increase and therefore there could be an additional tax increase on top of removing child benefit from higher rate taxpayers. That would also take the pressure off finding genuine reductions in expenditure, which would be achieved by reducing the size of the state.
I hope that my hon. Friend the Minister can address that issue in his response to the debate, because there is a real definitional problem here. The way that the Government are proposing to introduce this tax penalty on higher rate taxpayers with children is effectively to require the family to declare whether or not the taxpayer or their partner are in receipt of child benefit, and then the taxpayer would be taxed 100% on that child benefit. Surely, that is a tax increase rather than an expenditure reduction.
As a contribution to this debate, the Institute for Fiscal Studies has produced a devastating but none the less very useful report, and I hope that some of the issues identified in that report, which my hon. Friend the Minister will probably have been studying closely since it was published about a fortnight ago, will be addressed in his response to this debate.
Why do the Government want higher rate taxpayers with children to make a greater contribution towards deficit reduction than higher rate taxpayers without children? Surely, it would be fairer if all higher rate taxpayers contributed equally towards deficit reduction. Any changes in the higher rate tax band needed to achieve that aim would be simple, fair, easy to collect and difficult to avoid. In other words, they would meet all the original objectives of a good tax, unlike the Government’s current proposals, which, as I have said, have been the subject of withering criticism from the IFS. In its report, the IFS estimates that £90 million of the supposed yield from this new policy would be uncollectable, that £60 million would be lost through non-compliance, that £280 million would leak through what is described as tax planning and that, in addition, there would be administrative costs and a need for extra Inland Revenue staff. There has not been a defined estimate of those additional administrative and staff costs, but a rough estimate of at least £130 million has been proposed.
Could anyone think of a more absurd and ludicrous policy to introduce than this one? It increases the complexity of the tax system; it adds to the demand for more civil servants in Her Majesty’s Revenue and Customs to examine the changes that will be made; it encourages people to fiddle their arrangements; and it exacerbates the problem of what happens when people live together during a year without declaring it. The Government were committed to reducing the couple penalty, but this proposal will actually exacerbate it. I do not think that there is anything commendable or sensible about this policy, and there are alternatives to it.
I asked the Library if it would be possible to come up with an alternative. I do not take this view myself, but if one thought that the way to deal with this issue was to say, “If there are two higher rate taxpayers in a family, they should forfeit their child benefit”, that change would affect only 130,000 families. It would not generate much income, but it would apply to those 130,000 families who definitely have a joint income that is greater than the £84,000 to which I referred earlier.
I asked the expert in the Library whether it would be possible to have a system whereby people could claim relief against loss of child benefit by certifying that the total gross income of their household did not exceed £85,000. The answer was that, in principle, that would be possible, but that it would require joint filing for households with at least one higher rate taxpayer. One presumes that having made a return at the end of the year showing total joint income was no more than £85,000, child benefit would not be withdrawn from that household.
There are ways of generating some income in the context of this policy, but I do not think it is worth the candle, because it cuts across the dearly and long-held principle that we should have a universal benefit for families with children.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Thank you, Mr Dobbin. It is a great pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on securing the debate.
Government policy towards higher rate taxpayers and welfare go to the very heart of the challenge to tackle the tough economic circumstances that we face today. It is right and fair that we support hard-working families through these difficult times, and it is vital to ensure that all parts of society contribute to tackling the economic legacy that the Government have inherited.
When we came to government, we had been through the deepest recession since the war. We inherited an economy crippled by the biggest financial crisis in almost 100 years and the largest budget deficit in our modern history. Tackling that deficit is the vital precondition of sustainable growth. Only by tackling the deficit can we provide the certainty, stability and low interest rates that are critical to our recovery and renewing our prosperity across the country. Cutting the deficit is a vital precondition of growth. It has meant that we have had to make some very difficult choices to tackle the profligacy of the previous Government and target spending where it is most effective.
The Government believe that the welfare system must remain fair and affordable while protecting the most vulnerable, and that work must pay. To achieve that, we have had to make tough decisions such as raising the state pension age to 67 between April 2026 and April 2028, not going ahead with the planned £110 above inflation increase to the child element of the child tax credit, and not uprating the couple and lone parent elements of the working tax credit in 2012-13. Those are tough decisions to make, but we have sought to make sure that they are fair across income distribution. That is why the Government have, for the first time, undertaken and published a distributional analysis of the impacts of the autumn statement 2011 and previous fiscal events.
After combining the impact of tax, tax credit and benefit and public service spending changes introduced at the autumn statement 2011 and previous fiscal events, the analysis demonstrates that the top 20% of households will make the greatest contribution towards reducing the deficit as a percentage of their income and benefits in kind from public services. It is fair that higher rate taxpayers, who are better off, make a greater contribution to those savings. We are committed to the same approach as we reform child benefits.
Let me start by saying that we fully understand how important child benefit is to millions of families across the country. For many families, it provides a vital income boost to parent income, recognising the extra costs that they face compared with non-parents. Currently, child benefit is paid to around 7.5 million people, around 95% of whom are women, in respect of 13 million children and young people. Child benefit is paid at a rate of £20.30 a week for the first child and £13.40 for each subsequent child. It is a substantial income boost to families, but it also comes at a substantial cost to the Exchequer. Child benefit already makes up around 7% of total social security and tax credits spending, and each year those spending levels rise.
Furthermore, we already pay more than £2 billion pounds a year in child benefit to higher rate taxpayers. At a time when we face constrained resources, we have to focus the resources that we have where they are needed the most.
Mr Chope
If that is so, why was that not said by the Chancellor of the Exchequer in the June 2010 Budget? Why did he say that he was going to freeze child benefit? Why did he not say what my hon. Friend is now saying? It seems that the Government—perhaps because of the minority party in the coalition—have now shifted their ground and are reneging on a pre-election promise not to interfere with child benefit.
Mr Gauke
As I said earlier, we were conscious that we had to take difficult decisions in the run-up to the comprehensive spending review in October 2010. We had to come up with spending decisions that would enable the Government to have plans that met fiscal targets. In the process of preparing for the spending review, tough decisions had to be made. When faced with the various options, the Chancellor decided that it was necessary to look again at child benefit and to ensure that that spending was targeted as best as possible.
Mark Reckless (Rochester and Strood) (Con)
Given the need to target child benefit as well as possible, can the Minister tell us how much child benefit is being paid for children resident outside the United Kingdom—for instance, in Poland and Lithuania? Would it not be appropriate to tackle that issue before dealing with the 40% taxpayer?
Mr Gauke
I have a great deal of sympathy with my hon. Friend’s concern. I may or may not be able to furnish him with the numbers that he has asked for. None the less, we have looked at that issue on several occasions. He will not be surprised to learn that we are constrained by European regulations relating to social security payments, which means that we are not able to address his concern in the way that he would like. European economic area nationals can claim child benefit and tax credits as long as they meet the relevant conditions. That is the constraint, I am afraid. There is not the easy choice that he seeks.
Mr Gauke
I am conscious that I have three minutes left and I have barely begun to deal with the various points raised by my hon. Friend the Member for Christchurch, who secured this debate.
We recognise that most higher rate taxpayers are not super-rich. But, as my right hon. Friend the Chancellor has said,
“a system that taxes working people at high rates only to give it back in child benefit is very difficult to justify at a time like this.”
He went on to say:
“We simply cannot ask those earning just £15,000 or £30,000 to go on paying the child benefit of those earning £50,000 or £100,000.”
The debts of the previous Government have to be addressed. Consequently, we have had to make difficult choices. By removing child benefit from higher rate taxpayers, the Office for Budget Responsibility estimates that we will save £2.5 billion a year. The savings mean we can continue to direct child benefit support to where it is needed most, supporting millions of families, and millions of children from birth until the time when they leave full-time education at the age of 18 or even 19.
Julian Sturdy
I want to touch on the transferable tax allowance, which has already been mentioned. I have written to the Treasury about it, and it is a way of bringing fairness back into the system. Will the Minister respond to that?
Mr Gauke
I am grateful, because I want to respond directly on that point. The Government, as stated in the coalition agreement, want to recognise marriage in the tax system. We remain committed to that and we will introduce proposals at an appropriate time, as is consistent with the coalition agreement. We remain committed to what is in the coalition agreement.
Mr Gauke
No, I mean within this Parliament, which I assume does not mean what my hon. Friend suggests.
I appreciate that there are a number of concerns about how this policy will be implemented and how it will impact on hard-working families. We have been clear that the reform needs to be as simple as possible. That is why we have sought to withdraw child benefit from households with the higher rate taxpayer and not pursue a complex means-testing regime that would require Her Majesty’s Revenue and Customs to contact 7.8 million households in receipt of child benefit.
From a customer perspective, this delivery option does not place a burden on all child benefit claimants and it limits the impact on households containing a higher rate taxpayer. The Chancellor and I will be working closely with our officials to scrutinise the available options as to how we will implement this policy and find a sensible way forward. Plans for implementation will be set out in the next few months.
London Olympics
(12 years, 9 months ago)
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Barry Gardiner (Brent North) (Lab)
I have no declarable interests relating to the sustainability of the London Olympics, other than that more than a decade ago I was the founding chair of the all-party group on the Olympics. We formed the group to encourage a then hesitant Government to bid for the Olympic games. My father was an Olympian in 1936, playing as a Scotsman for the British football team—those were the days when the Scottish Football Association had no qualms about joining the football associations of the other home nations to field a strong British team. My point is simply this: if I am critical of aspects of the 2012 games, it is not because I am or ever have been antipathetic to the Olympics; it is because I care passionately that the games in London this summer should be the best ever staged and that nothing should be allowed to bring them into disrepute.
At the start, let me make common cause with the Minister in applauding much of the work done by the Olympic Delivery Authority in achieving so much of the vision of an Olympics that respects sustainability. I praise the London Organising Committee of the Olympic Games and Paralympic Games for becoming the first games organising committee to be certified to the British standard 8901 specification for sustainability management systems for events.
I recognise that the Olympic Delivery Authority for London 2012 is creating venues, facilities and infrastructure that will leave a lasting social, economic and environmental legacy for London and the UK while minimising any other adverse impacts during the design and construction of the Olympic park, venues, infrastructure and housing. The creation of new infrastructure, sporting facilities and housing in an area currently experiencing high levels of deprivation will help to create neighbourhoods and vibrant places where people will want to live and work after the games are over. Communities are being reconnected by the building of more than 30 bridges across the waterways, railways and roads that currently divide the Olympic park area. All that is good.
The ODA has also sought to minimise carbon emissions associated with the development and to optimise efficient water use—indeed, many of the construction materials have been brought on site by barge via Prescott lock to reduce road traffic congestion. To reduce the risk of flooding in the Lea river valley, 100 hectares of new green space has been created. The ODA has worked with the construction industry to source environmentally friendly and ethically produced materials to produce a low-carbon construction footprint. Even rubbish and waste have been thought through: a contractor has been engaged specifically to compact and transport waste from site by barge, and 90% will be recycled or reused. For all that, John Armitt, the ODA’s chairman, and Dennis Hone, its chief executive, deserve Parliament’s thanks and praise. On the site itself, the ODA has spent in excess of £1.8 million cleaning up the toxic legacy of chemical contamination that blighted the area. The remediation of the site has brought the land back into public use and has been a wonderful focus to improve the environment and quality of life for people in that part of London.
What an irony, then, that this most sustainable of all Olympic games should embrace as one of its key sponsors a company whose name is inextricably linked with the worst chemical disaster in human history—a company that owns Union Carbide Corporation, which was responsible for up to 25,000 deaths that have been directly associated with the Bhopal gas tragedy in India. To this day, the company has failed to remediate the Bhopal site: the water table is now so contaminated that children in Bhopal are born with deformities at 10 times the rate elsewhere in India. In this debate, I will claim that the Dow Chemical Company, which owns Union Carbide Corporation, has failed to live up to the high corporate social responsibility standards that are supposed to characterise the Olympic movement across the globe and the London games in particular—standards that Lord Coe, the chairman of LOCOG, referred to in his evidence to the Select Committee on Culture, Media and Sport as ethical, social and environmental.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Does my hon. Friend agree that Union Carbide is different from Union Carbide India, and that Union Carbide was bought by Dow nearly 12 years after the Bhopal disaster? It would be good to clarify ownership.
Barry Gardiner
I assure my hon. Friend that I will address that point later in my remarks.
The sustainable sourcing code published by LOCOG states:
“Sustainability is one of a number of core elements which together represent what value for money means to LOCOG. As a result it will place a high priority on environmental, social and ethical issues when procuring products and services for the Games. This means we want to do business with responsible suppliers and licensees; companies who treat their staff and sub-contractors well, who understand the nature of the products and materials they are supplying, and who recognise their responsibility to protect the environment and foster good relations with their local communities.”
The Minister is here today to respond to this debate on behalf of the Secretary of State, who is, after all, the chair of the Olympic Board. With reference to the sustainable sourcing code, I challenge the Minister to provide justification on three distinct points relating to the appointment of Dow Chemicals Ltd as a sponsor of the London Olympics: first, the propriety of the procurement process itself; secondly, Dow’s legal responsibility for Union Carbide and the consequences of the Bhopal tragedy, which my hon. Friend the hon. Member for Linlithgow and East Falkirk (Michael Connarty) mentioned; and thirdly, the wider ethical concerns about Dow’s practice as a company and its suitability as a sponsor.
I want to be sure that the Minister has no grounds to think that I have misled him, so I ask him to intervene on me at any stage if he thinks that I have misrepresented a fact pertaining to the case. If he does not I will assume that, although he may disagree with the conclusions I draw, he none the less accepts the facts as I have stated them.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)
To pick up on the hon. Gentleman’s kind invitation, I might intervene if I am so concerned, but it is also possible that I will want to reserve my remarks until the end in order to wrap them all up in one go. Therefore, if I do not intervene, it is not because I necessarily accept what he is saying. I will deal with it either then or later.
Mr Andrew Smith (Oxford East) (Lab)
I congratulate my hon. Friend on securing this important debate. His concerns are shared more widely in the House. Will he also take it that those of us who do not intervene agree with the facts that he is presenting?
Barry Gardiner
Yes indeed. I am grateful to my right hon. Friend for his intervention.
First, I will raise my concerns about the chronology, openness and transparency of the Olympic wrap procurement process. I understand that just three months after Dow was confirmed as an official partner of the International Olympic Committee, LOCOG chose the Olympic stadium wrap as one of the areas of the Olympic budget that would be cut. I accept that that was a perfectly proper response to the spending review, but reports from LOCOG at the time estimated savings from the wrap at £7 million. It was also reported at the time, by the tenacious Sunday Express journalist Ted Jeory, that the Secretary of State for Culture, Media and Sport had been informed that finding a private sector partner for the wrap was highly likely—that was in an e-mail from the Department on 16 December. We now know from Architen Landrell, a UK company based in Chepstow, that it was appointed under a tier 3 contract by Sir Robert McAlpine, the main contractor for the stadium’s construction. Architen Landrell was asked to produce eight test panels and give a final costing for the stadium wrap, which it did, at a price of approximately £1.5 million.
Two questions arise from that. Why did the Secretary of State believe it was highly likely that a private sponsor would be found for the stadium wrap? Why were the media given the figure of £7 million as the projected saving, when the actual saving was known to be only £1.5 million?
On 8 February 2011, it was reported that the tendering process for a company to sponsor the wrap would go ahead, with expressions of interest due by 18 February. That was an extraordinarily short time in which to source a major supplier. The public might consider it inconceivable that only 10 days were allowed for such a major tender, unless there had been clear and ongoing discussions with potential partners before the announcement. In a recent response to a written question to the Department, I was told that the shortest period that the Department had allowed in the previous 12 months for any tender where the contractor would be paid more than £1 million was 28 days, yet LOCOG allowed only 10 days for someone to bid to pay a sum, publicly estimated to be £7 million, to sponsor the wrap. Does the Minister think that LOCOG would have set the tender window at a mere 10 days if Dow Chemicals had not already been lined up as a sponsor?
In his letter to London assembly member Darren Johnson, Lord Coe said that the Government took the decision to ditch the wrap in order to achieve the announced saving. That prompts several further questions. What discussions did the Department, the ODA and LOCOG have about the decision to put the wrap up for sponsorship? Did the International Olympic Committee put any pressure on LOCOG to provide a niche for Dow as a sponsor of the London games? If the Government simply wanted to achieve savings in the original budget, why did they not press on with the Architen Landrell wrap, which would have shown a saving of £5.5 million against the original budget and given the project to a British company?
The ODA procurement policy on the Olympics states:
“As a public body the ODA is required to operate in the procurement framework set out by European Union Procurement Legislation and UK Regulations.”
Was that the reason why the procurement of the wrap was passed from the ODA to LOCOG—LOCOG is not a public but a private body and was therefore not obliged to follow the standard EU and UK procurement rules?
Another company, the Nottingham Textile Company, is adamant that it submitted an expression of interest before the deadline of 18 February. It heard nothing for a long time and eventually inquired why it had received no response. The company was told by LOCOG that its submission had been too late. Will the Minister undertake to check the date on which Nottingham Textile Company’s submission was received by LOCOG and whether, in fact, it was in time?
Let me be clear: I believe that the Government quite properly wish to achieve savings in the cost of the Olympic games. I also believe that Dow Chemicals was putting pressure on the IOC to find a way for it to become a key sponsor with sector-exclusive marketing rights for the London games. I believe that LOCOG wished to assist the IOC in that endeavour and therefore suggested that £7 million could be saved by taking the wrap away from Architen Landrell and procuring it under a sponsorship deal with Dow. I believe that the Government knew that a sponsorship deal was being negotiated and were content to collude with the IOC and LOCOG to facilitate a major IOC sponsor and to pretend to the public that in doing so, they were saving £7 million. In short, the procurement process was rigged in favour of Dow Chemicals. It was a sham.
Zac Goldsmith (Richmond Park) (Con)
I congratulate the hon. Gentleman on securing this important debate, and I agree with much of what he says. I hope he does not mind my adding that Dow Chemicals has or shares responsibility for 96 of the US’s so-called superfund toxic waste sites, which are the most polluted sites in the entire United States. That makes it one of the world’s most polluting companies. Given that the emphasis is on a green Olympic games, it is hard to imagine a less appropriate partner.
Barry Gardiner
I am delighted to have spared the time to give way to the hon. Gentleman, who makes an important observation. I will come back to that in the final section of my speech.
Sadly, LOCOG is a private organisation that is not subject to the Freedom of Information Act 2000. On 18 December last year, I therefore wrote to Lord Coe, chairman of LOCOG, asking many of the above questions and many more. To date, he has not seen fit to answer them. When asked on 24 January this year in the Select Committee whether he thought it
“appropriate for London 2012 to be so closely associated with a company like Dow Chemicals”,
the Secretary of State replied:
“Obviously it is a decision for LOCOG, but it is a decision that, as a result of the controversy that we had last autumn, I looked into very carefully. After looking at it very carefully, I…wholeheartedly supported the decisions that LOCOG had taken.”
He went on to justify Dow’s involvement, saying that
“they did not own Union Carbide at the time of the Bhopal disaster in 1985”—
a point made by my hon. Friend the Member for Linlithgow and East Falkirk. In fact, it happened in 1984, but that was perhaps just a simple slip of the tongue by the Secretary of State. He also said that Dow did not own Union Carbide
“at the time of a final settlement with the Indian Government in 1989”
and added that
“that has been upheld three times in the Indian Supreme Court”—
twice, in fact—which made him confident that
“it was a very reasonable decision.”
Many commentators have found it frankly astonishing that both LOCOG and the Secretary of State seem to have taken Dow’s claims regarding those cases at face value and repeated Dow’s press lines verbatim. Surely the Secretary of State knows that when someone purchases a company, they purchase both its assets and its liabilities. Before the Minister repeats his Secretary of State’s evidence to the Select Committee, where the right hon. Gentleman opined of Bhopal:
“I do not believe that Dow were responsible and I think we should support them as a company”,
let me ask the hon. Gentleman whether he is aware that Dow’s wholly owned subsidiary, Union Carbide Corporation, is wanted by courts in India on criminal charges of culpable homicide? Because UCC is considered to be a fugitive from justice in India, and because Dow wholly owns UCC but has not produced it in court, I understand from legal advice that I have taken that that puts Dow in the position of sheltering a fugitive from justice. Does the Minister’s own legal advice concur with that?
Is the Minister aware that Dow Chemicals itself is a named respondent in public interest litigation in the Madhya Pradesh high court, seeking remediation of the abandoned Union Carbide factory site? Is he aware that Dow is a named respondent in a forthcoming curative petition in India’s supreme court that aims to address the inadequacies of the 1989 civil settlement made by Union Carbide of $470 million—a figure that equates to approximately $600 per victim? Compare that with what happened in the Gulf of Mexico and the payout that the American Government demanded of BP. By some ironic coincidence, the hearings on the petition were granted on 28 February 2011—the same day the sponsorship contract closed—by a five-judge bench that included India’s chief justice.
Union Carbide is also subject to a civil action in the southern district court of New York. The action relates to the ongoing contamination in Bhopal through chemical dumping by the company in and around the factory. Significantly, the US court accepts that that is a distinct case from the 1984 disaster and that it has not been dealt with under any pre-existing settlement. In New York, Dow’s wholly owned subsidiary UCC has pleaded that only Indian courts can order it to remediate the site; but in India, both Dow and UCC have pleaded that the Indian courts have no jurisdiction over them.
Dow has consistently claimed to the Indian authorities that Dow and UCC are independent entities and that on those grounds Dow should be held immune from prosecution in relation to the Bhopal disaster. Documents made public in The Independent by Nina Lakhani two weeks ago, however, have revealed that Dow Chemicals secretly traded through a network of intermediaries to avoid a legal ban imposed after the Bhopal tragedy on the sale of UCC products in India. The documents prove that, far from being a separate company, Dow Chemicals controlled and manipulated its wholly owned subsidiary, setting prices and setting up supply chains to secure profits for Union Carbide products that in India were illegal. As Tim Edwards from the Bhopal Medical Appeal said,
“these documents...show Dow shielding UCC and obstructing justice. If however Dow is also misrepresenting its relationship with UCC, then it is obstructing justice and shielding itself from trial. Either way, LOCOG’s insistence that Dow is a fit sponsor for Britain’s Olympics appears perverse.”
In a letter addressed to IOC President Jacques Rogge, a copy of which was sent to Lord Coe, V. K. Malhotra, the acting president of Indian Olympic Association, stressed that there were active court cases against Dow. He said:
“A false campaign has been launched by the Dow Chemicals saying that the matter has been settled. It is not correct. The case is still pending in the court and no final compensation has been made.”
Why have LOCOG and the Government chosen to believe Dow Chemicals over the acting president of the Indian Olympic Association?
Let me repeat the words of LOCOG’s sustainability code:
“This means we want to do business with responsible suppliers and licensees; companies who treat their staff and sub-contractors well, who understand the nature of the products and materials they are supplying, and who recognise their responsibility to protect the environment and foster good relations with their local communities.”
When LOCOG awarded the sponsorship contract to Dow, was it aware of the pending criminal charges for culpable homicide against Dow’s fully owned subsidiary UCC in the Bhopal criminal court? Was LOCOG aware that Dow’s fully owned subsidiary, UCC, was declared by that court as an absconder from justice as long ago as 1992, and that the company remains an absconder from justice to this day?
John Penrose
I am conscious of the passage of time and want to make one point en passant, in case I do not have time to cover it. The hon. Gentleman asks whether LOCOG was aware of the situation when it awarded the sponsorship contract. I am not clear whether LOCOG was aware of it. I understand that he has already asked LOCOG that question, and LOCOG is the body who can answer it. However, he should bear in mind that LOCOG did not award the sponsorship contract: it was awarded by the International Olympic Committee, not by LOCOG.
Barry Gardiner
The Minister really needs to get a much better brief because the Olympic programme contract was the contract awarded by the IOC. The contract for the stadium wrap was taken away from the ODA and put to LOCOG precisely because LOCOG was in charge of sponsorship contracts. If the Minister does not know that, he does not understand the core of this debate.
John Penrose
I apologise to the hon. Gentleman if I have misunderstood him. When he was discussing sponsorship, I thought he was talking about becoming a sponsor of the Olympic movement. I have been using a different term and have been talking about the contract for the Olympic stadium wrap as a commercial supplier deal. If he is using the word “sponsorship” to cover both those terms, of course, I appreciate what he is saying and I will happily adjust my language to match his.
Barry Gardiner
The sponsorship was tendered under a tier 3 arrangement by LOCOG, and it was the body that awarded that sponsorship contract to Dow Chemical.
Was LOCOG aware that Dow is a party to a public interest litigation suit in India concerning clean up and environmental rehabilitation of UCC’s factory site? If LOCOG was aware of those issues, how were they considered in the decision-making process on Dow’s suitability as a partner for London 2012 on ethical, social and environmental grounds? Did LOCOG seek any further legal or other advice in relation to the issues mentioned, other than that given by Dow and its representatives?
Last month, the procurement process and the Dow sponsorship deal suffered its biggest blow to date. Meredith Alexander, one of the 12 sustainability commissioners, resigned in protest over what she believes was the airbrushing of Dow out of Bhopal and into the Olympics. She has made her case as follows:
“In 2010, the International Olympic Committee appointed Dow as an international sponsor for the Games. This decision was taken in Geneva, and the commission had no ability to take a stand. Then last year, LOCOG, the London Games organiser, invited companies to tender for a major contract to provide a wrap for the main Olympic stadium. Dow won this bidding process.”
That is the point the Minister failed to appreciate. Meredith Alexander goes on:
“Many groups and individuals raised questions and finally the commission was asked to investigate. I was shocked to see that the result of our investigation was a public statement from the commission that essentially portrays Dow as a responsible company. I had been providing information about Bhopal to commission members and I was stunned that it publicly repeated Dow’s line that it bears no responsibility for Bhopal. I did everything I could to get the statement corrected or retracted. When it became apparent that this would not happen, I realised that the only way to ensure that my name was not used to justify Dow’s position was to resign.”
Barry Gardiner
No, I will not. Meredith Alexander goes on:
“And the only way to ensure that the victims’ side of the story was told was to do so in public.”
She concludes:
“I would like to see Dow take responsibility for the Bhopal tragedy and finally ensure that real justice is achieved for the victims and the families of those who died. This would be a true Olympic legacy.”
Finally, I turn to the wider issues regarding Dow’s reputational and ethical suitability to be an Olympic partner. In relation to ethical sourcing, the Olympic Delivery Authority guidelines on procurement policy state:
“The ODA will seek to work with suppliers who have a good track record in human rights and who use goods and materials that have been produced ‘ethically’. This includes seeking suppliers who operate within the laws of their country and who do not have discriminatory practices.”
Bearing that in mind, it is difficult to see how LOCOG could justify appointing Dow as a sponsor, given the facts that were known at the time about the company and its wider regard for law and regulation. The key facts are these. In February 2007, the Securities and Exchange Commission in New York imposed a cease and desist order on Dow Chemical for its improper payment practice and improper accounting. In September 2010, Dow was blacklisted by the Indian Government for bribing officials in order to fast track licensing of the chemical Dursban, which has been found to be dangerous to human health in the USA. A report by Innovest indicates that Dow failed to disclose in statements to investors its $2 million settlement of a consumer fraud lawsuit brought by the New York State Attorney-General in 2003.
Jason McCartney
On a point of order, Mr Dobbin, I would like to hear the Minister’s response. A lot of questions are being posed and I would really like to hear the Minister’s response.
Jim Dobbin (in the Chair)
I am sure that the Member leading the debate would like to hear the Minister’s response as well, but unfortunately time is running out. If the Member who is in charge of the debate wants to get complete answers, he must take that into consideration.
Barry Gardiner
Since then, earlier this month, Dow Chemical lost its bid to overturn anti-trust fines totalling in excess of €25 million imposed by the European Union for its part in colluding to fix prices of chloroprene rubber. Just last week, Dow was penalised and heavily fined for underestimating the greenhouse gas emissions from its Grangemouth plant in Scotland.
What is perhaps most incredible is that the Chairman of the Commission for a Sustainable London 2012, Shaun McCarthy, has gone on record as saying:
“LOCOG carried out its due diligence exercise with regard to reputation risk in relation to this procurement. At the time, when the bids were being considered in early 2011 LOCOG found no current media, political or NGO commentary that would give cause for concern.”
As ever, Meredith Alexander makes the best riposte. She has said:
“Even a twelve year old could have found them”.
The Minister is not a 12-year-old, and he knows that the public are not naive either. He must not reply with a speech that is long on examples of sustainability and good practice but short on answers to the questions that I have posed about Dow. To assist the Minister in preparing for the debate, I sent all the questions I would be raising to his office—[Interruption.] I did so at 3 o’clock this morning, to enable him to come to the House prepared.
Today, the Minister should have the courage to stand up and accept that Dow is not a fit and proper company to be a sponsor of the most sustainable Olympic games ever staged. If he does so, everyone would accept that although a mistake had been made, the Government have the determination to put it right. If he does not do so, he must accept that a cloud will hang over the London games. They will be tainted by a sham procurement process and a sponsor that has shown it is contemptuous of the law, defiant of regulations, willing to engage in bribery and corrupt practices, but indifferent to the continuing suffering of thousands of human beings.
Jim Dobbin (in the Chair)
Minister, as I am sure you are aware, you only have two minutes.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)
Thank you, Mr Dobbin. I am, indeed, aware that I have only two minutes. I am very sad about that, because many important points have been raised and there is virtually no time to respond to them.
I was glad to hear the hon. Member for Brent North (Barry Gardiner) start his remarks by pointing out that there has been a great deal of cross-party support for the entire Olympic bid process, of which he is a long-standing supporter, and for maintaining and delivering the most sustainable Olympics ever. I completely agree with his support for that, and I hope that hon. Members on both sides of the House will continue to provide such support.
Incidentally, I should mention that the reason why I am responding to the debate rather than the Minister for Sport and the Olympics is that he is opening an iconic sports facility in Durham, which will be part of the nation’s sporting legacy. I am therefore responding on his behalf.
The limited amount of time available means that all I can say is this. As I am sure the hon. Gentleman is aware, LOCOG is an independent company. The Government have one board member out of 19 or 20. Most of the decisions he is criticising were taken by LOCOG, and asking the Government to respond on behalf of a private organisation on which we have one board seat is, I am afraid, shooting at entirely the wrong target.
I understand the hon. Gentleman’s concerns and, indeed, I doubt anybody here would disagree with his point. I am sure that everybody here shares his concern to ensure that there is justice for the victims of the Bhopal disaster. As another contributor to the debate mentioned, there is a difference between legal liability for the company that Dow Chemical bought after the awful tragedy at Bhopal—as he rightly observes, that persists; when someone buys a company, they inherit its legal liabilities as well as its assets—and being morally responsible for causing the problem. Those two things are linked but distinct. We need to be careful in how we talk about responsibility. He was using that term rather loosely throughout his remarks. I am terribly sorry to have run out of time but, fundamentally, the answer to the vast majority of the hon. Gentleman’s questions is: ask LOCOG.
Flood Defences
(12 years, 9 months ago)
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Nicola Blackwood (Oxford West and Abingdon) (Con)
It is a pleasure to serve under your chairmanship, Mr Dobbin.
According to the Association of British Insurers, Oxford West and Abingdon is the constituency with the 49th highest flood risk in the UK, with more than 2,000 homes and businesses at significant risk of flooding. That assessment excludes risks associated with surface flooding caused by heavy rainfall. Despite the high level of local flood risk, the Oxford flood risk management scheme received such a low cost-benefit analysis that even under the new “all or part or none” funding provisions, it will be necessary to find non-Department for Environment, Food and Rural Affairs funding for 92% of the project, or approximately £127 million of the £133 million project. At the same time, in Abingdon, where nearly 500 homes and businesses were flooded badly in 2007, neither of the flood storage proposals for the River Stert or the River Ock reached even that level of cost-benefit threshold: they were rejected outright as “not economically viable”.
Those decisions have been disappointing to many, especially those whose homes and families are at risk of flooding, but everyone understands that we are in a time of austerity and that the money must go where it will do the most good—that is fair. Having said that, we heard just before the recess the good news that there would be a lot of weir work going on: Osney weirs A and B and Godstow weir B will receive funding. Design and appraisal work for raised flood defences at Lower Wolvercote, and the Farm road scheme in Abingdon in partnership with the Vale of White Horse district council, will go ahead. This last project’s bid for £40,000 in funding was rejected in December. I am pleased that the Environment Agency has had a change of heart on its viability.
I began this debate by outlining at some length the flood context in my constituency, and will come on to discuss the key issue—funding the replacement for Northmoor weir from flood defence funding—for two reasons. The first is to make the Minister appreciate fully that for far too many people in my constituency, the spending of flood defence money is not a bureaucratic issue to do with balance sheets. Hundreds of people were made homeless for months in 2007, losing prized possessions, mementos and even pets to the floods. Those memories are still raw. Given the current economic situation, we have had to cut flood defence funding by 6%. I need to be able to assure those constituents that, even where money cannot be spent locally, the Government are spending, transparently and accountably, each and every penny of available flood defence funding in the best possible way. Anything less than that is unacceptable.
Secondly, I am not taking issue with flood funding provision in other parts of my constituency today. My concern, and that of my constituents, is the Environment Agency’s programme to replace all paddle and rymer weirs on health and safety grounds and, in particular, the replacement of the Northmoor weir in the village of Appleton in my constituency. My constituents in Appleton and elsewhere have opposed the idea since before my election. Indeed, my first meeting with the Environment Agency and local residents on the subject dates back to before I was elected in 2010. The Minister knows the background only too well following our extensive correspondence, but for the sake of colleagues, I will outline the salient points.
Northmoor weir, like all paddle and rymer weirs, is manually operated by lock-keepers who pull the paddles and rymers out of the weir system to adjust the water levels. The weir has been operating in that way for more than 200 years. Northmoor weir was extensively refurbished in 1995 and given a 40 to 60-year lifespan. Between 2008 and 2010, however, the Environment Agency decided to conduct extensive health and safety tests on the weirs. It is unclear why it suddenly decided to do so, given that the relevant legislation dates back to 1992, before the refurbishment of Northmoor weir, and given that there is no record of a serious injury, which might reasonably be supposed to have triggered such a response.
The report, by HJ Consultants, was of the opinion that it was only a matter of time before there was a major injury on the paddle and rymer weir. That is despite the fact that the only injuries recorded under the safety, health and environmental reporting and management system since 2000 are strains, sprains and splinters. Even before the introduction of that system, the assessor could only record one brain haemorrhage, in 1991, that may or may not be attributed to the pulling of a paddle and, before the introduction of safety harnesses, an incident in which a lock-keeper at Blakes weir fell in. I assume that safety harnesses have now addressed that situation.
The consultant found that the loads at the weir exceeded the levels recommended by the Health and Safety Executive, but found no evidence that that had caused any significant problem in more than two centuries of use, even though the consultant found that there had been no regular programme of health and safety training offered to lock-keepers, with one lock-keeper last receiving manual handling training more than seven years ago. Just think how many fewer sprains and splinters there might have been if regular training had been provided during that time, and if there was a work pattern that provided a formal break for lock-keepers in the morning, as recommended on page five.
Should the Minister think I am being a little hard on lock-keepers, here is what one of them wrote to the Prime Minister on the issue:
“My work over the years included the operation of both Paddle and Rymer and more modern weirs, and I can say that, with proper training, care and safety precautions, there was very little danger involved. Any equipment can be worked dangerously. The worst scenario was the possibility of misjudging the placing of a rymer or a paddle in the flowing water: one had the choice between trying to save it or losing it through the weir! It was not a very hard choice! Also, it was not actually lost, and would float around in the vicinity until retrieved later.”
That is just one of many similar comments I have received from Thames lock-keepers. Nevertheless, it was on the basis of that health and safety report that the Environment Agency decided it was imperative to spend £2.6 million from the flood defence funds to replace Northmoor weir.
Mr Andrew Smith (Oxford East) (Lab)
I congratulate the hon. Lady on securing this important debate, which of course touches on matters that affect my constituency, too. Will she join me in congratulating the Oxford Flood Alliance for its work, and does she agree that the Environment Agency generally takes better decisions when it takes notice of what the OFA and local residents have to say? Even if the health and safety case was accepted, the Environment Agency should be funding the project not from flood prevention money, but from some other budget.
Nicola Blackwood
The right hon. Gentleman makes a very good point. The Oxford Flood Alliance has stated publicly, and to me personally, that it has significant reservations about the project.
The Environment Agency has stated that the project will improve the weir’s resilience and speed of operation. At a meeting of the Environment Agency, Northmoor and Appleton parish councillors and me in December, the EA acknowledged that there had never been any problem with the operation of the weir, even in times of flood. It is important to note that the project will not reduce flood risk. The EA specifically confirmed to me in writing, and at the meeting of December 2011, that the project will not reduce flood risk in any way, and that in any case—according to the EA—the number of properties affected directly by the operation of the weir amounts to five. That comes out at £500,000 per property, if we are counting. Nevertheless, the finance will still come from the flood defence budget.
According to the EA in December 2011, the project has such high priority that it would go ahead even if it cost £10 million. On hearing that extraordinary statement, I became uncomfortably well acquainted with the health and safety apparatus of Whitehall, as every good constituency MP should. On writing to the HSE, to ask whether such a position was reasonable, I was told:
“The EA has carried out an extensive risk assessment. The aim of the risk assessment is to help the EA identify reasonably practicable ways of reducing or controlling the risks of injury from operating the weirs. As part of this, the EA would need to consider costs and their likely effectiveness in reducing the risks.”
I have been astonished to learn, however, that EA policy is apparently not to conduct cost-benefit analyses for health and safety projects, even if they come from flood defence funding, a budget considered so precious that all flood defence proposals must be subjected to rigorous cost-benefit analysis. I was told by the EA in December that that was because the policy was to eliminate all risk.
Being joyfully unfamiliar with the health and safety world until then, I thought that cost-benefit analyses might not generally be conducted for health and safety. In fact, the Manual Handling Operations Regulations 1992, which are the relevant health and safety regulations, state:
“The extent of the employer’s duty to avoid manual handling or to reduce the risk of injury is determined by reference to what is ‘reasonably practicable’. This duty can be satisfied if the employer can show that the cost of any further preventive steps would be grossly disproportionate to the further benefit from their introduction.”
The concept of “so far as is reasonably practicable” was tested in case law as far back as 1949, in Edwards v. National Coal Board, which established that a computation must be made in which the quantum of risk is placed on one scale and the sacrifice, whether in money, time or trouble involved in the measures necessary to avert the risk, is placed on the other. If it be shown that there is gross disproportion between them, the risk being insignificant in relation to the sacrifice, the person upon whom the duty is laid has discharged the burden of proving that compliance was not reasonably practicable.
It is clear, therefore, that what is required by law is not to eliminate the risk, as I was informed, but to reduce the risk to what is reasonably practicable and to consider the cost of doing so. Any action in which the cost was grossly disproportionate would not be required by law, and the HSE expected the EA to have considered the cost. Indeed, freely available on the HSE website I found not one but two helpful documents that walked me through how to do a cost-benefit analysis for a health and safety project, one of which even had a user-friendly checklist. I am not a lawyer, though, so I asked to see the EA’s legal advice, to see if there were grounds for the multi-million-pound health and safety investment that I had failed to grasp. The EA, however, confirmed that before committing to the full replacement of nine paddle and rymer weirs as the only appropriate level of response to its legal responsibilities under health and safety legislation, it had taken no legal advice of any kind.
The picture is now fairly clear, but before closing, I will express one further concern that has arisen in discussions about EA plans for Northmoor weir. It is about the really poor standard of consultation and communication that has marked the process from the beginning. Appleton residents, who will bear the brunt of building disruption if the project goes ahead, found out about the project when there was an application for suspension of parking along the route to the weir. Understandably, that led to outrage in the village and a vigorous local campaign by the parish council and the Weir Action Group, but despite delaying the work for a year, ostensibly to consult with the local community, the only change that the EA has made to the project so far was the proposal for a change of access route, so that Appleton residents experience less disruption during the two years that the work will take.
Obviously, if the weir goes ahead regardless of every objection I have put forward today, it is clearly preferable that the works route is not directly through the village, but the local objections, and the objections from some on the far side of the river and from others at risk of flooding in the rest of my constituency, are not simply about a works route. They are about the whole justification of the project, and its funding from the flood defence budget. To characterise them as anything else is simply inaccurate and misleading.
Other concerns about the quality of consultation have come to me from owners of nearby land considered for use in possible access routes. One wrote to me to say:
“At no time has the EA been in direct contact with us (or any of the relevant landowners I believe). I first heard of the whole project in February 2010—the proposed start date for the project then was 1 April 2010! I was then rung by a neighbouring farmer to warn me that the Contractors for the EA were going to come and survey our land but…the Contractors…had been unable to find out who owned our land and had contacted him for our telephone number. I phoned the contractors who paid me a visit prior to doing the survey. They were perfectly pleasant but I think as shocked as I was that the EA had not been in contact with me. The survey was duly done but we have never received any information or follow up from either the Contractors or the EA since”.
I am afraid that that example is not isolated. Failure to follow up meetings, to contact individuals or to communicate more widely have been hallmarks of the project so far.
The EA accepted in the December 2011 meeting that there had been significant such failures, but that does not seem to have stopped it, as is evident from a letter from the chairman of the board of the Environment Agency—briefed, I assume, by his officials—to the Minister. The letter claims that I believed that the £2.6 million being spent on the weir should be transferred to other local flood defence schemes. The Minister must know that I have never made that suggestion, and nor would I.
I said that when other flood defence schemes locally were being turned down, it was difficult to justify spending £2.6 million on health and safety, which is what it is. I said that flood defence money must be allocated on the grounds of greatest need, wherever that might be. I fully accept that, and my constituents fully accept that, but I am unable to assure my constituents that that is what is happening in this case, because the necessary due diligence on the project was never done. I said that when every flood defence proposal that is granted funding is first tested to destruction by EA cost-benefit analysis models, it is incomprehensible that in this case the EA is willing to spend millions of flood defence money with no cost-benefit analysis of any kind, with no legal advice of any kind and with no analysis of alternatives that would work for Northmoor weir specifically.
I ask the Minister, therefore, to ensure that the EA suspends the project until there has been a full and transparent cost-benefit analysis. On Wednesday, I discussed the project with the Prime Minister, as the MP for the other side of the weir, so I know that he has also written to the Minister asking for that to be done. The Prime Minister is also concerned that we should be able to defend our flood defence spending fully to the public. We will not be able to do so, however, until there is also sound legal advice that this multi-million pound health and safety investment is reasonably practicable, and not grossly disproportionate, and, most sensible of all, until we have a genuine Northmoor-specific study to see if there are more proportionate options that will meet the EA’s genuine health and safety obligations.
My constituents face flood risk daily, but they are not asking for preferential treatment or for funding of projects that do not meet the cost-benefit thresholds set by DEFRA. All they want to know is that flood defence money is being spent on genuine flood defence projects, and that every single penny of that budget can be transparently accounted for. All they want is a fair playing field.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I congratulate my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) on securing the debate and her reputation around Whitehall as a doughty champion of her constituents. I am delighted to respond to her concerns about the replacement of the manually operated paddle and rymer weir at Northmoor with a mechanised radial gate system.
My initial reaction was similar: how can the Environment Agency justify spending £2.5 million on a weir when the money could be better spent protecting people and property? I can appreciate people’s frustration with the expenditure of such a large sum of money on the works and with two summers of disruption in the constituencies affected, apparently just to meet a health and safety requirement with little flood risk benefit. My hon. Friend also expressed concerns about the decision to proceed without undertaking a full assessment of the flood benefits of the new structure. I shall take those points in turn.
First, I ought to set out the Environment Agency’s case for replacing the structure. A succession of weirs along the Thames, some in my constituency, regulate water levels. In a flood event, it is vital that the weir does not obstruct the flow of water, otherwise the north side of the river—in the case of the Northmoor weir—will flood.
Nicola Blackwood
The Environment Agency has confirmed that the replacement of the Northmoor weir will not improve the flood risk. Is the Minister claiming that the replacement of Northmoor weir is to improve flood risk?
Richard Benyon
I shall come on to that, because there is a flood risk issue, which I will cover later in my remarks.
The Northmoor weir is one of five major weirs being replaced as part of a single contract. The other four are already under construction or are now in place. The high price tag is a consequence of the size of the structure: the weir is more than 22 metres wide, stretching right across the Thames. The replacement has a predicted operational life of at least 60 years, and similar structures elsewhere have already proven effective and reliable. The problems with the existing weir structure have been known for some time.
During flood conditions, Environment Agency staff must lift an effective weight of up to 60 kg to shift the paddles. That is four times the safe working load recommended by the Health and Safety Executive. It is just about possible for two people to operate the paddles together, but at an awkward angle and at twice the safe working load. In the mid-1990s, an attempt was made to find a cheap and cheerful approach to solving the problem by replacing the wooden paddles with fibreglass. That reduced the weight of the paddles, but did little to solve the real problem. The sheer force of water, particularly on the deeper paddles, makes the job hard.
Two independent reports have been produced on the operational risks involved. As well as the weight, manual operation of the weir in response to flood alerts means working in difficult weather conditions for several hours. It is dangerous and tiring work. There are many weirs and gates along this stretch of the river that all need to be operated in tandem to prevent flooding of the houses to the north of the river. That is a key point. The structures need to be operated quickly when flooding is predicted, and an injury to a staff member halfway through would exacerbate local flooding.
Nicola Blackwood
First, will the Minister accept that, despite those working conditions, there is no record of any serious injury on the weir? Secondly, will he accept that the number of properties directly affected are, as the Environment Agency stated at the December meeting, five?
Richard Benyon
If the weir does not work, properties will be flooded. We can argue that the existing paddle and rymer weir works perfectly well, but as my hon. Friend knows, the Environment Agency has received consultants’ reports stating that the working load is way in excess of what one would normally allow for employees. I am sure that that she would agree that she and I as employers in business would have to take note of advice that is given. One always tries to do that proportionately, but it must be understood that the advice was given. It would be difficult for the Government to sit at arm’s length and ignore advice that the loading is four times too high and the risks that emanate from that. It is difficult for Ministers to overrule such advice, but I will talk about that further.
The Health and Safety Executive has seen the reports from the Environment Agency and the Appleton Weir Action Group and has written back in support of the agency’s position. As a responsible employer, the Environment Agency cannot ignore the advice of the Health and Safety Executive. Sitting back and doing nothing is no longer an option. The weir clearly poses risks to those who must operate it and to those live in the neighbouring constituency. An assessment of risk is not just about whether there have been accidents, but about the potential for accidents. I am a sceptic of all matters relating to health and safety, and I do not come to the matter as a quisling of the health and safety industry, for that is what it has become. I come to it as a sceptic, like my hon. Friend. I have looked at the matter in great detail, and if I were an employer on the board of the Environment Agency, I would find it difficult to ignore the report.
That brings me to the flood benefits of the weir, and why they have not been assessed for this project. The flood risk in the area is well known. Around 80 houses behind the north bank have a 1% chance or greater of flooding each year. In flood conditions, the Northmoor weir is opened, so that flood water can pass through as quickly as possible. The relationship between the weir structure and flood risk is well understood and would not benefit from further investigation. Doing that would have added unnecessary and damaging cost to an already expensive project.
Mr Andrew Smith
If the Minister is relying for this part of his argument on the flood prevention benefit that he supposes exists, is it not right, as the hon. Member for Oxford West and Abingdon (Nicola Blackwood) said, that there should be a cost-benefit analysis? If that is not made and he is relying on the health and safety part of his argument, how can be justify taking the cost from the flood prevention budget? Surely, he cannot have it both ways.
Richard Benyon
During my long discussions with the Environment Agency, I became convinced that it really does understand the flood risks. I do not believe that it spends money without looking carefully at the alternatives. I have seen all eight or nine alternatives that have been presented—many of them were untried and untested as a means of lifting the paddle and rymers out using mechanical systems—as well as replacements with alternative schemes. All of them, because of the design processes that would have to be applied and the further delay, would have cost more. I assure the right hon. Gentleman that it is understood throughout the Environment Agency and my Department that every penny that we spend must be spent in the right way. We ensure that the budgets that we manage go as far as possible, and I will come on to explain why the spending must go ahead.
Given that something must be done, the Environment Agency has focused on identifying the cheapest and best way to solve the problem. It looked into the matter in considerable detail, and I have seen the summary of the detailed analysis, which points to the radial gate solution that the agency is pursuing. The other options would be more expensive, and in some cases there would be no guarantee that they would even work, because they are untried in other areas. Replacing the weir will not remove risks altogether, but it will reduce them to a reasonable level for the staff concerned and provide more reliable long-term protection for those living on the flood plain to the north.
When reviewing the background to the matter, I also considered the steps the Environment Agency has taken to consult local residents on the project. Objections have been raised, primarily from those who are not at risk of flooding, but who will suffer increased traffic and disruption during the work, and I entirely understand that.
Nicola Blackwood
That is not entirely accurate. I have received objections to the weir project from people who are at risk of flooding throughout my constituency and nearby constituencies.
Richard Benyon
I entirely accept that. I am talking about the local community, and the most vociferous objections are about disruption. I do not want to disrupt people’s lives more than we must. I am sure that my hon. Friend understands that I want to put on record that others are strongly supportive. Northmoor parish council has twice written to the Environment Agency urging it to proceed with the work as soon as possible.
Proposals to replace the five weirs have been considered by the Thames Regional Flood Defence Committee, and it has agreed to include them in the flood defence programme. That is important because the committee is made up of elected councillors from local authorities in the region. They provide a degree of local democratic input and accountability for decisions to allocate funding. They will not have taken the decision to allocate £2.5 million to Northmoor lightly, and they recognise other flood defence priorities in the region.
Over the past two years, the Environment Agency has consulted extensively with local residents and listened to their concerns about the scheme. I am sure that many would like to have had more, and I will take up the matter of the contractor, which causes me genuine concern. The agency has heard what people have been saying about the increased traffic south of the river and made substantial adjustments to the plans, at an additional cost of £100,000 to the project.
The work has the support of Northmoor parish council and the Thames Regional Flood Defence Committee. Despite limited national funds, the Environment Agency’s board has allocated funding to allow it to proceed. The chair of the Environment Agency wrote to me last week setting out the justification for the project. I have heard my hon. Friend’s points, and the views she expresses on behalf of her constituents. I have considerable sympathy but, as is common, there are two sides to the story. I am satisfied that this is a case not of health and safety gone mad, but of something needing to be done to solve a problem that perhaps should have been sorted out some time ago. I am sorry, but I do not take the view that, just because there has not been an accident, one may not occur.
I understand that there may be areas where consultation could have been improved. I will make every effort to ensure that the points that my hon. Friend raised are answered, and I will do so in a letter as we are running out of time. I assure her that I will continue to converse with her and do my best to minimise the impact on her constituents. I want to put it on the record that I fight to ensure that every penny of money that is spent on flood alleviation schemes is spent in the best way possible, and I hope that she will come to realise that the problem has been dealt with in the best possible way.
Question put and agreed to.
Written Ministerial Statements
(12 years, 9 months ago)
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Air Passenger Duty (Northern Ireland)
(12 years, 9 months ago)
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The Economic Secretary to the Treasury (Miss Chloe Smith)
Last September the Government announced measures to support air travel to and from Northern Ireland. From 1 November 2011 APD for passengers travelling on direct long-haul routes departing from airports in Northern Ireland was cut to the lower short-haul rate. To provide a lasting solution, the Government launched a further process to devolve aspects of APD to the Northern Ireland Assembly.
Today, I can announce that the power to set APD rates for direct long-haul flights departing from Northern Ireland will be devolved to the Northern Ireland Assembly and provided for in the Finance Bill 2012. Following devolution, it will be for the Assembly to determine what level of APD will apply to direct long-haul flights. The rates set by the Assembly will apply to the carriage of passengers on and from a day to be appointed by order, irrespective of when the ticket for the flight was booked or purchased.
Landfill Tax (Scotland)
(12 years, 9 months ago)
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The Economic Secretary to the Treasury (Miss Chloe Smith)
I am today announcing that the Government will introduce legislation in Finance Bill 2012 to correct a flaw in landfill tax legislation, which means that landfill sites in Scotland have unintentionally been outside the scope of landfill tax.
The definition of a landfill site in landfill tax legislation refers to environmental legislation. Changes were made to this environmental legislation which meant that in 1999 sites moved from a framework of licences to a system of permits. Landfill tax legislation was duly amended and these amendments were brought into effect in England and Wales on 21 March 2000 and Northern Ireland on 17 January 2003. However, the Scottish Government did not introduce the necessary commencement order, thereby unintentionally taking each Scottish landfill site outside the scope of landfill tax from the date each new permit took effect.
The legislation will have full retrospective effect from 21 March 2000 to bring Scottish legislation into line with that in the rest of the UK.
No action is required by, or additional burden applied to, landfill site operators in Scotland or elsewhere in the UK.
Copies of the draft legislation and HMRC brief have been deposited in the Libraries of both Houses and are available on the Treasury website at:
www.hm-treasury.gov.uk.
Integration
(12 years, 9 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I am today publishing “Creating the Conditions for Integration”, the Government’s approach to enabling and encouraging integration in communities throughout England.
“Creating the Conditions” sets out how integration is achieved when neighbourhoods, families and individuals come together on issues that matter to them. It is based around five key factors:
I. Common ground—Shared aspirations and values, and a focus on what we have in common rather than on difference.
II. Responsibility—Promoting a strong sense of mutual commitment and obligation.
III. Social mobility—People able to realise their potential to get on in life.
IV. Participation and empowerment—People have the opportunities to take part and take decisions in local and national life.
V. Challenge to intolerance and extremism—A robust response to threats which deepen division and increase tensions.
Most people from different backgrounds get on well together, feel they belong to their neighbourhood and to this country, and have a sense of pride in the place where they live, but challenges remain in particular places. Building a more integrated society requires collective action across a wide range of issues, at national and local levels, by public bodies, private companies, voluntary and community organisations and, above all, communities and individuals. “Creating the Conditions” sets out the Government’s views and our role in this process.
We recognise that integration is a vital local issue. We will ensure that the integration benefits of national programmes and projects are recognised and supported. All Government Departments have an important role in tackling barriers to integration, in particular those relating to long-term social and economic challenges.
Beyond this, integration requires a local response and we strongly encourage local partners such as local authorities, police forces and other statutory bodies to work together to drive action and to learn from each other. To support this we will use tools such as the Localism Act 2011 to give people the power to come together to take action. We will seek opportunities to support projects that are sustainable through community or business support and which exemplify positive activities or pioneer new approaches. We are committed to outflanking and challenging extremism and intolerance and we will take the necessary action to do so.
Together, these are fundamental changes to how Government Departments and the rest of the public sector work in this area. This approach will make integration the everyday business of public services, the private sector and wider civic society, while ensuring local responsibility and the opportunity for everyone to contribute.
“Creating the Conditions for Integration” is available at: http://www.communities.gov.uk/publications/ communities/integration. A copy of this publication will be placed in the Library of the House.
Farming Regulation Task Force Report
(12 years, 9 months ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I am pleased to announce that the Government published their full response to the Farming Regulation Task Force report today.
I established the independent Farming Regulation Task Force in June 2010. Its report, published in May last year, covered the full range of the regulatory landscape that affects farming, and set a challenging agenda for changing the way we regulate, and how we work with farmers.
We published our interim response in November last year. At that time I said that Government would be bold and ambitious in responding to these recommendations. Out of over 200 recommendations we have said an immediate yes to 159, setting out a clear agenda for implementation, and are actively considering a further 31. Some we are exploring through formal consultations which are currently under way, and for others we are working closely with different parts of the food and farming sector to find solutions. Where we have decided that we are unable to take forward a recommendation, we have explained clearly why.
I am proud that farming is taking forward the Government’s better regulation agenda by focusing on risk-based intervention and changing the way we work with industry and stakeholders to develop solutions in partnership. We are committed to achieving this—the task force report and this response are only the start.
The full response is available on the DEFRA website www.defra.gov.uk.
Afghanistan
(12 years, 9 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 14th progress report on developments in Afghanistan since November 2010.
The Prime Minister and President Karzai signed the UK-Afghanistan Enduring Strategic Partnership document on 28 January. The document signals our shared vision of a secure, stable and prosperous Afghanistan able to maintain its own security and prevent the country from again being used as a safe haven for international terrorists. This builds on the strong message from the Bonn conference last year of the international community’s commitment to Afghanistan post-2014. The NATO Chicago summit in May and the Tokyo development conference in July will be the point at which the international community looks to deliver on the commitments made at Bonn. The Chicago and Tokyo conferences will demonstrate to the Afghan people and the insurgency that the international community will support Afghanistan far beyond 2014 and will not end when combat troops withdraw.
During the last month the UK continued to help the Government of Afghanistan build their capacity to deliver better public services and economic opportunities for its people. UK support to the Civilian Technical Assistance Programme helped the Ministry of Counter Narcotics and the Ministry of Public Health develop policies and programmes for the Afghan people. The UK also helped more than 3,400 people in Helmand access technical and vocational education and training, helping to raise incomes and generate economic growth.
Governor Mangal visited Kajaki for a Shura on 8 January. He was escorted by Afghan uniformed police. He travelled by road, which was the first time a provincial governor in Helmand had been able to follow this route for many years. The road move reflects a significant improvement in confidence last year.
In Central Helmand the Afghan National Security Forces (ANSF) successfully planned, commanded and executed Operation Rozi Roshan in Nahr-e Saraj. The operation involved 500 soldiers. Rozi Roshan was completely Afghan-led and represented a significant accomplishment for the ANSF. UK forces, while ready to assist, were present in only a supporting role.
In January the winter weather continued to have a tangible impact on insurgent activity. The number of security incidents was relatively low. However, we must expect to see these rise as the weather improves. In the spring the insurgency is likely to attempt to regain lost territory and with it the campaign momentum. The ANSF supported by ISAF are prepared for this but we should expect challenges ahead, particularly for the ANSF as they take the lead on more operations. However we continue to make steady progress, illustrated in part this month by Operation Rozi Roshan and developments at the Infantry Branch School. We remain on track for the Afghans to assume full security responsibility across Afghanistan at the end of 2014.
I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).
Review of Consular Evacuation Procedures
(12 years, 9 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
In my written statement of 4 July 2011, Official Report, column 74WS, I informed the House that in light of the challenges posed by the evacuation of British nationals from Libya, the Foreign and Commonwealth Office (FCO) had conducted a review of its evacuation arrangements in a crisis. A copy of the Review of Consular Evacuation Procedures was placed in the Library of the House.
I gave instructions that the recommendations of the review should be implemented in full by 31 December 2011. This statement updates the House on the FCO’s progress in implementing the review’s recommendations.
The crises of early 2011 were an unprecedented series of challenges for the FCO’s crisis management capability. They also presented an invaluable opportunity to learn the necessary lessons and to refine our crisis management systems in order to ensure we deliver the best possible service to British nationals in future. In response to the recommendations in the review the FCO has:
Developed a more agile and clear crisis decision-making structure, based on the Gold/Silver/Bronze crisis response system used by emergency services. As part of this, the FCO board will be carrying out a high-level training session in early March;
Introduced London Crisis Response Teams made up of trained FCO staff across London who can be rapidly deployed to augment the FCO’s crisis response;
Expanded our crisis training and exercising capability, to deliver an increased level of training across the global network;
Improved the use of digital and social media for messaging British nationals before and during a crisis;
Improved our call handling systems;
Launched a project to define our longer-term Crisis IT and communications needs, under which we have successfully piloted pre-crisis registration of British nationals via SMS text messaging;
Revised our guidance for FCO staff on crisis planning and response;
Designed a new framework for Crisis Management Planning by our overseas posts, which will be in place across the network by the end of 2012;
Increased the numbers of volunteers in our Rapid Deployment Team network, including by expanding the coverage of the Americas team to include South America, and recruiting for a new middle east and South Asia team;
Clarified key policy issues, for example on how costs are charged in a crisis, in order to ensure that decisions can be taken more quickly during future crisis responses;
Intensified our contact with others involved in our response to key crises, including private sector companies, chartering companies etc.;
Developed closer links with Ministry of Defence crisis teams, including by embedding MOD staff in the FCO’s Crisis Centre;
Increased the numbers of staff dedicated to crisis work in Crisis Management Department.
I have placed in the Library of the House a table which provides more detail of how we have implemented the review’s recommendations.
These improvements to FCO systems and practices were tested in recent crises, most notably the Bangkok floods (October 2011), the evacuation of embassy staff from Tehran (November 2011) and the sinking of the cruise ship Costa Concordia (January 2012). On each occasion, we implemented the Gold/Silver/Bronze command and control system, which promoted clear and quick decision making and communication, and activated the London Crisis Response Teams, enabling us to scale up our crisis response quickly and sustainably.
It will be a priority for 2012 to ensure that these improvements are fully embedded into FCO processes to ensure that we have genuinely upgraded our crisis planning and response systems. Specific priorities will include:
Regularly exercising the London response to a crisis, including by the FCO board;
Implementing a crisis IT project to design and implement best practice systems for maintaining reliable data about British nationals before and during a crisis;
Adopting the new crisis management plan across all UK posts overseas, supported by a programme of training and exercising;
Upgrading the FCO’s Crisis Centre to expand its operational capacity and co-locate it with its out-of-hours global response centre.
Each crisis throws up a unique set of challenges. We attach importance to learning the lessons from each one, based on a thorough and objective assessment of our response. We are confident that by implementing the recommendations of the review of evacuation procedures, we have made important and sustainable improvements to our crisis planning and response systems and that this has enhanced the quality of our crisis response. However, we recognise the need to avoid complacency in this critical and unpredictable area of work, and will ensure that we continue to carry out regular reviews of our systems.
Ministerial Council on Deaths in Custody
(12 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
The creation of the Ministerial Council on Deaths in Custody was announced in 2008 and it has been in operation since March 2009. Its creation was in response to an independent review of previous structures—the Forum for Preventing Deaths in Custody and the Ministerial Roundtable on Suicide. Significant reforms were made to these structures and the council has been working effectively for three years. I am pleased to announce that, following an evaluation of the effectiveness of the arrangements, the council will be funded to continue for a further three-year term. Lord Harris of Haringey has been reappointed as chair of the Independent Advisory Panel on Deaths in Custody.
The council comprises three tiers, the first of which is a ministerial board, chaired jointly by the Ministry of Justice and ministerial colleagues from the Department of Health and Home Office. The board brings together senior leaders across the custodial sectors as well as regulatory and third sector stakeholders to take forward an agenda aimed at making custodial settings safer and contributing to a reduction in deaths.
The second tier is the Independent Advisory Panel on Deaths in Custody. This is an advisory non-departmental public body. It is chaired by Lord Harris of Haringey and consists of six independent expert panel members. The panel is the principal source of advice to Ministers and the board on measures to reduce deaths in custody.
The third tier is a broad-based stakeholder and practitioner group. There are over 100 members of this group, representing the interests of families, third sector organisations, practitioners from all sectors and the inspectorate and investigatory bodies.