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Leeds City Council Bill
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Nottingham City Council Bill
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Reading Borough Council Bill
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City of London (Various Powers) Bill [Lords]
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Hon. Members
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City of Westminster Bill [Lords]
Motion made,
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Hon. Members
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Transport for London Bill [Lords]
Motion made,
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Oral Answers to Questions
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stuart Andrew (Pudsey) (Con)
1. What discussions she has had with ministerial colleagues and others on marketing Wales as a destination for foreign business investment.
Karl MᶜCartney (Lincoln) (Con)
3. What discussions she has had with ministerial colleagues and others on marketing Wales as a destination for foreign business investment.
The Secretary of State for Wales (Mrs Cheryl Gillan)
I have regular discussions with ministerial colleagues and others on marketing Wales as a destination for foreign business investment. The recent Select Committee on Welsh Affairs report on inward investment in Wales highlighted a number of important issues, and we are committed to closer joint working with the Welsh Government to deliver more inward investment to Wales.
Stuart Andrew
I am grateful to my right hon. Friend for that answer. One of the best ways to improve foreign investment in Wales is for the UK and Welsh Governments to work more closely together. Does she regret the apparent unwillingness of the Welsh Business Minister to do just that?
Mrs Gillan
As the Welsh Affairs Committee has made clear in the inquiry into foreign direct investment, co-operation between both Governments is considered essential to marketing Wales and for potential investors. However, as economic development is devolved and led by the Labour Government in Wales, I share my hon. Friend’s disappointment that the Business Minister did not give evidence to the Committee. I hope that we can develop a more mature attitude, as FDI projects in Wales have diminished over the years and we need to get them back up, so that we are competing effectively.
Karl MᶜCartney
I thank my right hon. Friend for her earlier answer. Does she agree that it is right to explore investment opportunities in emerging markets? There are markets close to home, such as in the Commonwealth of Nations, which consists of 54 countries and has a population of 3.5 billion-plus, that also offer important investment potential.
Mrs Gillan
The Prime Minister himself has said that he wants
“to link Britain up to the fastest growing parts of the world, because we need to trade and export our way out of our economic difficulties.”
We inherited those from the previous Government. That is why I have taken such a tremendous interest in this area and why I am very pleased that we have now joined up UK Trade & Investment to the Welsh Government. We have offered at least one of UKTI’s investment advisers to work in the Welsh Government offices in Treforest and for there to be two-way secondees between UKTI and the Welsh Government. That is real progress and it shows that we can get our two Governments working together in the interests of Wales.
Ann Clwyd (Cynon Valley) (Lab)
As the Secretary of State knows, good air transport links are essential in attracting business investment to Wales. What discussions has she had with the First Minister and the Welsh Government about improving the links between Cardiff airport and the rest of the world?
Mrs Gillan
As the right hon. Lady knows, I have constant discussions with the First Minister and the Welsh Government, as does the Under-Secretary. We have certainly discussed the links and there has been some discussion of Cardiff airport. I am pleased to say that I have invited the owners of the airport to meet me shortly, because I have been concerned about some of the reports I have heard in the press. We should be trying to talk Cardiff airport up, not down.
Nia Griffith (Llanelli) (Lab)
I certainly welcome the announcement by the Labour Welsh Government that Tata Steel will invest £800 million in Wales, but as the Secretary of State will know Tata bosses have repeatedly said that the prices they have to pay for energy in the UK are simply not competitive when compared with what industry pays elsewhere. What discussions has she had with the Energy Secretary and energy companies to secure a better deal on energy prices for heavy industry to provide an incentive for companies such as Tata to invest in Wales?
Mrs Gillan
One of the first things I did when I was appointed was visit Tata Steel, and I took the Business Secretary, Vince Cable, with me to discuss energy prices. The hon. Lady should know that all the Departments have been focused on the energy-intensive industries because we want to ensure that there are good manufacturing jobs in the future, not just in Wales but elsewhere in the UK. I have read the press release from the Welsh Government and the First Minister and he says that he was told at a meeting in India that £800 million has been approved over the next five years for investment in Tata Steel in Wales. I look forward to seeing the detail, because it seems to be a general announcement at this stage without too much detail attached to it.
Mr Speaker
The Secretary of State was referring to the right hon. Member for Twickenham. We do not name people in this place.
Mark Tami (Alyn and Deeside) (Lab)
2. What assessment she has made of the effect of the Budget on the National Assembly for Wales; and if she will make a statement.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
As a result of the Budget the Welsh Government will benefit from an additional £11.7 million over the spending review period. Consequently, they will have received nearly £500 million in additional funding since the spending review in 2010.
Mark Tami
The granny tax, the pasty tax and cutting the top rate of tax for the rich while shutting Remploy factories that give disabled people the dignity of work: those are the priorities of this Government. The caravan tax will hit thousands of hard-working families in Wales, particularly in north Wales. Will the Minister speak to the Chancellor and get him to scrap the caravan tax, rather than sitting on his hands like the hon. Member for Aberconwy (Guto Bebb) did the other evening?
Mr Jones
The hon. Gentleman should not get so aerated. The Government fully recognise the importance of the holiday and touring park sector to the Welsh tourism industry and to the economy of Wales as a whole. Her Majesty’s Revenue and Customs is consulting on the proposals, as he should know, and I hope he will play a part in that consultation, which closes on 18 May.
Jonathan Evans (Cardiff North) (Con)
Will my hon. Friend confirm that the Red Book reveals that although 14 Government Departments will see reductions in spending over the next four years, spending in Wales increases year on year despite the fact that the Welsh Assembly Government underspent by £385 million last year while cutting health spending in Wales?
Mr Peter Hain (Neath) (Lab)
Is it fair that Welsh churches, charities, caravanners, pensioners and almost everybody else will pay more taxes so that millionaires can each pay £40,000 less?
Mr Jones
That is a very strange rhetorical question. The right hon. Gentleman will know that the reduction in the top rate of tax will not take effect until the end of the public spending freeze and it is quite interesting that the Government of whom he was a member did not see fit to increase the rate of tax until a matter of weeks before their last Budget.
Mr Hain
I am amazed that the hon. Gentleman is not ashamed of that impact on some of the most vulnerable in our society. Can we in Wales, through him, apologise to the Secretary of State? We used to think that she was all on her own at sea in the Cabinet, but clearly they are now all at sea together. The Budget omnishambles, Abu Qatada, petrol pump panic—at least Wales has a Labour Government to give us some protection from this Tory-Lib Dem incompetence. At least Wales can reject this disastrous Budget by voting Labour in the council elections next Thursday.
Roger Williams (Brecon and Radnorshire) (LD)
Does the Minister agree that with new law-making powers and a £15 billion budget, the Welsh Assembly Government have both the tools and the money to make a real and lasting difference in Wales?
Mr Jones
Yes, indeed. It is vital, too, that the Welsh Assembly Government work closely with the Government in Westminster for the good of the people of Wales. I very much hope that we will now see a far more joined-up approach taken by the Welsh Assembly Government in that regard.
Nick Smith (Blaenau Gwent) (Lab)
4. What assessment she has made of the treatment of capital allowances in enterprise zones in Wales; and if she will make a statement.
The Secretary of State for Wales (Mrs Cheryl Gillan)
The Chancellor announced funding for enhanced capital allowances in the Deeside enterprise zone in the Budget in addition to the money already provided for enterprise zones in Wales. We are committed to looking at how we can provide these allowances elsewhere but the Welsh Government must develop strong, detailed and robust business cases.
Nick Smith
I thank the Secretary of State for her interest in the Blaenau Gwent enterprise zone. Plans for a motor industry complex there are now at a critical juncture. We need to know if capital allowances can be delivered or if other tax treatments are a better prospect. May I press her for a meeting between developers and the Chief Secretary to the Treasury, so that we can thrash out a solution?
Mrs Gillan
The hon. Gentleman has worked tirelessly for his constituency to develop these proposals for the Ebbw Vale enterprise zone, and I really do congratulate him on that. We have met on other occasions and I have written to him again today, saying that I am very willing to try to secure a meeting with the Chief Secretary to the Treasury, but without a business case the Treasury cannot make any decisions on further enhanced capital allowances. I urge the hon. Gentleman to discuss the subject with the Welsh Government as well as with our Government.
Mr Mark Williams (Ceredigion) (LD)
5. What discussions she has had with ministerial colleagues and others on funding for broadband technology in Wales.
Bob Blackman (Harrow East) (Con)
8. What discussions she has had with ministerial colleagues and others on funding for broadband technology in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend the Secretary of State has had, and continues to have, regular discussions with ministerial colleagues, Welsh Government Ministers and other interested parties on the funding of broadband technology in Wales.
Mr Mark Williams
I thank the Minister for that response and congratulate him on his part in securing £57 million for Wales and, of course, the broadband provision for Cardiff. However, on the roll-out of broadband in scattered rural areas, does the Minister share the frustrations of many in my constituency—small business men, and consumers trying to access their bank accounts—at the speed with which that is being delivered in Wales when compared with authorities such as Cornwall, which are speeding ahead?
Mr Jones
As my hon. Friend says, the Government have made available a total of £56.9 million to help bring superfast broadband to Wales. The Welsh Government are working with Broadband Delivery UK on how best to employ the funding, but we are indeed looking to the Welsh Government to make an announcement as to their contribution to speed up the process. I am sure, however, that my hon. Friend will be pleased with the announcement by BT last December that 33 rural communities will have access to faster broadband by this summer, including Aberystwyth.
Hywel Williams (Arfon) (PC)
The South Wales chamber of commerce has called for a more ambitious target for broadband speeds in Wales for 2015, at 50 megabits per second from the previous target of 30. What are the Government doing here, in conjunction with the Welsh Government, to achieve such a target, which could clearly be very beneficial for Welsh business?
Mr Jones
It would indeed be beneficial, and I am sure that the hon. Gentleman will recall that in the Budget a sum of £12 million was made available to help transform Cardiff into a super-connected city, which should result in speeds of between 60 and 100 megabits per second—plus, of course, wi-fi connectivity.
Hywel Williams
Cardiff is not Wales, although some people might be under that misapprehension. Countries such as Finland and Malta have introduced a universal service obligation on internet coverage and connections similar to that for the postal service, to ensure that everybody has equal access to the internet and its advantages, irrespective of location, be that rural or otherwise. Will the Government look into that, and do so in time for the next communications Bill—or perhaps it is something that the Welsh Government can do under the powers set out in part 4 of the Government of Wales Act 2006?
Mr Jones
I quite agree with the hon. Gentleman: Cardiff is not Wales, but he referred specifically to the South Wales chamber of commerce. Indeed, as he knows, it is the ambition of this Government to ensure that superfast broadband is rolled out throughout the United Kingdom by the end of this Parliament, and at the moment we are on track.
Bob Blackman
Broadband suppliers have shown a marked reluctance to invest in Wales. Does my hon. Friend agree that it is important that the people of Wales have the benefit of new technology, and that perhaps the Welsh Assembly might use some of this vast underspend to invest in Wales, so that everyone has the benefit of broadband?
Andrew Selous (South West Bedfordshire) (Con)
6. What recent discussions she has had with ministerial colleagues on encouraging economic growth in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
Economic growth is a key priority for this Government and I have regular discussions with ministerial colleagues on ways to encourage economic growth in Wales. Yesterday I met the business advisory group and heard directly from members how this Government’s growth policies are helping businesses in Wales to face the current economic challenges.
Andrew Selous
Does the Secretary of State agree that the fact that the recent Budget is taking 95,000 people out of tax altogether in Wales is a big boost for business in Wales, as more people will have greater spending power and find it worth their while to be in work?
Mrs Gillan
I agree entirely with my hon. Friend. It must be very good for those people whom we have taken out of tax altogether and the lower paid workers who will benefit from our tax changes, because it will put money directly back in their pockets rather better than the Welsh Labour Government down in Cardiff Bay, under whose auspices council tax has doubled in Wales.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Budget included a clear framework for reducing localised pay in the public sector. Considering that there is a direct link between money in people’s pockets and spending in the local economy, how will depressing pay encourage economic growth in the poorest parts of the British state?
Mrs Gillan
When it comes to local pay, our aim is to create a more flexible labour market that is more responsive to the challenging economic conditions we currently face. We want to create more private sector growth and, as a consequence, wealth in Wales and across the UK.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
If the Secretary of State thinks this Government are interested in growth, she is living in cloud cuckoo land. Is she not keeping up with today’s news that shows that the Chancellor’s obsessive intention of cutting too deep and too fast is taking us back into recession?
Mrs Gillan
No. I have to say that today’s news is disappointing but not totally unexpected. Britain cannot be immune to what is happening on our doorstep. For example, Italy, Holland, Ireland, Belgium and Portugal are already in recession. But let us remember that since the coalition took office in 2010, more than 630,000 private sector jobs have been created, more than outstripping job losses in the public sector, and private sector employment in Wales rose by 12,000 between quarter 3 in 2010 and quarter 3 in 2011.
Huw Irranca-Davies (Ogmore) (Lab)
7. What recent progress has been made on electrification of the south Wales valley railways; and if she will make a statement.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend and I are working with the Secretary of State for Transport and Welsh Ministers on the business case for electrification of the south Wales valley lines. We expect to make an announcement in the summer.
Huw Irranca-Davies
My hon. Friend the Member for Blaenau Gwent (Nick Smith) has the lovely Ebbw vale line. I live in the beautiful Llynfi valley and catch the Maesteg to Gloucester train via all points including Cardiff and Newport, a route which sometimes takes me through the delightful constituency of the hon. Member for Vale of Glamorgan (Alun Cairns). All these link even as far west as Swansea. We are all valleys people on valleys rail connections, so when considering electrification for south Wales and the valleys, will the Minister’s definition of south Wales be my definition—the definition of the people of south Wales—because when it comes to electrification, we are all in this together?
Mr Jones
Yes, indeed. We recognise the importance of the electrification of the south Wales valley lines to the economy of the Cardiff city region and wider. The Chancellor of the Exchequer singled out electrification of those lines as a key infrastructure priority in the Budget, and I was delighted that my right hon. Friend the Prime Minister confirmed his personal commitment to that when he visited Wales earlier this month.
Albert Owen (Ynys Môn) (Lab)
9. What recent discussions she has had with the First Minister of Wales on developing rail transport in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
My right hon. Friend has regular discussions with the First Minister about a range of transport issues that affect Wales, most recently last week.
Albert Owen
Has the Wales Office done a study of the impact of High Speed 2 on Wales, and has the Wales Office put the case for improving the lines west of Crewe and line speeds, as well as possible electrification, so that we can have a high-speed Wales?
Karen Lumley (Redditch) (Con)
What discussions has the Minister had with the European Parliament on trans-European network funding to enhance the railways?
Mrs Siân C. James (Swansea East) (Lab)
As we know, economic growth is one of the ways we can improve infrastructure in Wales, but to do so we need a modern railway, and that means electrification as far as Swansea. What impact assessment has been made of the effect on the commuter and holiday trade of rail electrification to Swansea?
Mr Jones
I commend the hon. Lady for her interest in this matter on behalf of her constituents and can assure her that we remain very interested in the electrification of the line and are working closely with the Welsh Assembly Government to develop the business case. [Interruption.]
Mr Speaker
Order. Far too many noisy private conversations are taking place. Let us have a bit of hush for Mr Robert Halfon.
Robert Halfon (Harlow) (Con)
10. What recent assessment she has made of the effect of petrol and diesel prices on the Welsh economy.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
The Government recognise that businesses, individuals and families are struggling with the rising cost of fuel, particularly in rural areas. We have eased the burden on motorists by approximately £4.5 billion through the abolition of the fuel duty escalator and the introduction of the fair fuel stabiliser and by cutting fuel duty.
Robert Halfon
I welcome the Government’s cuts in fuel duty, but the market price of oil is still too high, partly because of oil speculation. The United States is bringing in tough penalties for price fixing and market manipulation. Will the Minister urge his Government colleagues to look at this and put pressure on the big oil firms to cut prices at the pumps?
Mr Jones
As I have said, the Government recognise the impact of the rising cost of fuel on people and businesses in Wales. However, it should be remembered that the duty increase that was expected to take place in January this year has been deferred to August and we have cancelled the inflation increase planned for August, which means that there will be just one inflation-only increase this year.
Mr David Hanson (Delyn) (Lab)
Can the Minister tell us the price of a litre of fuel this time last year and today, and is the rise anything to do with the VAT increase that he voted for?
Gavin Williamson (South Staffordshire) (Con)
11. What recent discussions she has had with ministerial colleagues and others on the aerospace industry in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
I have regular discussions with ministerial colleagues and other organisations on a range of issues, including the aerospace industry in Wales.
Gavin Williamson
Does the Secretary of State agree that, while the UK Government have taken a lead in establishing enterprise zones, the onus is now on the Welsh Government to ensure that their enterprise zone for the aerospace industry in St Athan is a success?
Mrs Gillan
My hon. Friend is absolutely right. As far as enterprise zones are concerned, a great deal depends on what the Labour Welsh Government will do, because we have capital allowances for only one enterprise zone, which is already in Deeside. The enterprise zone to which he refers will be crucial to the UK and will secure work on the next generation of aircraft, because some 27,000 large aircraft, worth $3 trillion, will be needed over the next 20 years, around 7,000 new helicopters will be required within the next decade and there is a huge potential future market in unmanned air vehicles, and I want us to benefit from that demand in the aerospace business in Wales.
Ian Lucas (Wrexham) (Lab)
Is it not the case that the success of the UK aerospace industry is due to government and industry working together—[Interruption]—and that saying that business succeeds because government gets out of the way is arrant nonsense?
Mrs Gillan
Over this noise, Mr Speaker, I think the hon. Gentleman is suggesting that government should get out of the way of business. Indeed, that is exactly what this Government are doing, with the red tape challenge, by reducing the bureaucracy that the previous Labour Government imposed on our industries, and by reducing the rate of corporation tax so that our business environment can be one of the most competitive in the G20.
Mrs Madeleine Moon (Bridgend) (Lab)
13. What assessment she has made of the implications of the Budget for women in Wales.
The Secretary of State for Wales (Mrs Cheryl Gillan)
Last month’s Budget was one of fairness and values. Although we had to make some difficult decisions, we are committed to ensuring that women all over the UK play a full part in the economic recovery.
Mrs Moon
Women in Wales are suffering and struggling with rising food prices, the rising cost of living and the rising costs of child care. In the most recent quarter, 4,000 additional women became unemployed. How many women in Wales will benefit from the reduction in taxation on high-level earners from 50% to 45%? Will that benefit women in Wales?
Mrs Gillan
Despite the recession, the employment rate for women remains historically high, at 65.3% now compared with 53% in 1971. Employment has fallen more sharply among men during the recession, so frankly it will be expected to rise more quickly as the economy recovers. This is, however, the fourth consecutive set of figures to show employment and economic activity rising in Wales, which I would have thought the hon. Lady would welcome.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
Q1. If he will list his official engagements for Wednesday 25 April.
The Prime Minister (Mr David Cameron)
I am sure the whole House will wish to join me in paying tribute to Sapper Connor Ray, of 33 Engineer Regiment (Explosive Ordnance Disposal), who died on Wednesday 18 April from wounds that he sustained in Afghanistan. He was described by all who served with him as a superb soldier. His dedication and his courage will never be forgotten, and we send our condolences to his family and his loved ones.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House I shall have further such meetings later today.
Gordon Henderson
I associate myself with the Prime Minister’s tribute to Sapper Connor Ray and, in doing so, ask my right hon. Friend whether he will confirm that, although British servicemen and women are scheduled to leave Afghanistan in 2014, the actual pace of withdrawal will be determined first and foremost by the need to minimise the risk to those members of our armed forces serving in Afghanistan at that time.
The Prime Minister
My hon. Friend makes an important point. I can confirm that by the end of 2014 we will not have anything like the troop numbers that we have now, and we will not be in a combat role. Of course, post 2014 we do believe in having a training role with the Afghan army, particularly the officer training role that President Karzai has personally asked for us to undertake. The speed of the reductions between now and the end of 2014 will be in accordance with the conditions on the ground and with what is right in terms of transitioning from allied control to Afghan control—and at all times, of course, paramount in our minds is the safety and security of our brave armed forces, to whom I pay tribute again today.
Edward Miliband (Doncaster North) (Lab)
I join the Prime Minister in paying tribute to Sapper Connor Ray of 33 Engineer Regiment. He carried out his duties with the utmost courage, saving many Afghan and British lives by what he did, and our deepest condolences go to his family and friends.
Today we had the catastrophic news that Britain is back in recession. I am sure that the Prime Minister has spent the past 24 hours thinking of an excuse as to why it is nothing to do with him, so what is his excuse this time?
The Prime Minister
These are very, very disappointing figures. I do not seek to excuse them, I do not seek to try to explain them away, and let me be absolutely clear that there is no complacency at all in this Government in dealing with what is a very tough situation that, frankly, has just got tougher. I believe the truth is this: it is very difficult recovering from the deepest recession in living memory, accompanied as it was by a debt crisis. Our banks had too much debt, our households had too much debt, our Government had too much debt. We have to rebalance our economy, we need a bigger private sector, we need more exports and more investment. This is painstaking, difficult work, but we will stick with our plans, stick with the low interest rates and do everything that we can to boost growth, competitiveness and jobs in our country.
Edward Miliband
Typical of this arrogant Prime Minister—he tries to blame everyone else. The reality is that this is a recession made by him and the Chancellor in Downing street. Over the last 18 months since the catastrophic spending review, our economy has shrunk. This is a slower recovery from recession even than that in the 1930s. The reality is that it is families and businesses who are paying the price for his arrogance and complacency. Why does he not admit that it is his catastrophic economic policy, his plan for austerity, which is cutting too far and too fast, that has landed us back in recession?
The Prime Minister
Not a single business organisation, serious commentator or international body thinks that these problems emerged in the last 24 months. The debt crisis has been long in the making; the failure to regulate our banks has been long in the making; the Government overspending has been long in the making. This is a tough and difficult situation that the economy is in, but the one thing that we must not do is abandon the public spending and deficit reduction plans, because the solution to a debt crisis cannot be more debt. We must not put at risk the low interest rates that are absolutely essential to our recovery—that would be absolute folly. That is why no business organisation and no international economic organisation suggests we follow that course.
Edward Miliband
It is all bluster; the Prime Minister’s plan has failed. That is the reality. They were the people who said that Britain was a safe haven—the Chancellor even said it on Monday—and we are back in recession. It was the Prime Minister who said that we were
“out of the danger zone”—[Official Report, 15 December 2010; Vol. 520, c. 901.]
and this is what has happened. As even his own Back Benchers are saying, the complacent, “arrogant posh boys” just don’t get it.
Let us turn from the economic disaster of this Government to the political disaster that is the Culture Secretary. We now know, from the evidence published yesterday, that throughout the time when the Culture Secretary was supposed to be acting in an impartial manner, he and his office were providing in advance a constant flow of confidential information to News Corporation about statements to be made in this House, his private discussions with the regulators and his discussions with opposing parties. Having seen the 163 pages published yesterday, is the Prime Minister seriously telling us that the Secretary of State was acting as he should have done, in a transparent, impartial and fair manner?
The Prime Minister
Let me first of all finish off on the economy, which the right hon. Gentleman has moved off—[Interruption.]
Mr Speaker
Order. Let us hear what the Prime Minister has to say on the economy, and on anything else.
The Prime Minister
We will not let anyone forget who got us into this mess in the first place. More spending, more borrowing, more debt—that is what caused these problems; it cannot be the solution to these problems.
Let me turn to the Leveson inquiry. I set up the Leveson inquiry and its terms of reference were agreed by the leader of the Liberal Democrat party and the leader of the Labour party. I believe that to step in and prejudge that inquiry would be wrong. Lord Justice Leveson has made that precise point this morning. Let me read to the House what he has said. [Interruption.] Perhaps the House would like to listen. [Interruption.]
Mr Speaker
Order. Let us hear what the Prime Minister has to say, and then the questioning will continue.
The Prime Minister
Lord Justice Leveson said this morning that
“it is very important to hear every side of the story before drawing conclusions.”
He then said that
“although I have seen requests for other inquiries and investigations and, of course, I do not seek to constrain Parliament, it seems to me that the better course is to allow this Inquiry to proceed.”
Having set up this inquiry and agreed with the inquiry, the right hon. Gentleman should listen to the inquiry.
Edward Miliband
Lord Justice Leveson is responsible for a lot of things, but he is not responsible for the integrity of the Prime Minister’s Government. In case he has forgotten, that is his responsibility as the Prime Minister.
It beggars belief that the Prime Minister can defend the Culture Secretary, because he was not judging this bid—he was helping the bid by News Corporation. Two days before the statement to the House on 25 January, the Culture Secretary’s office was not only colluding with News Corp to provide it with information in advance, it was hatching a plan to ensure that it would be
“game over for the opposition”
to the bid. Does the Prime Minister really believe that is how a judge and his advisers are supposed to act?
The Prime Minister
The Leader of the Opposition clearly does not think that what Lord Leveson said this morning matters. Let me remind him of what he said yesterday about the Leveson inquiry. He said:
“I think”—
this is the Leader of the Opposition speaking—
“that it’s right that the Leveson Inquiry takes its course”.
He went on to say that
“the most important thing is that the Leveson Inquiry gets to the bottom of what happened, of what Labour did, of what the Conservatives did and we reach a judgment about that.”
Is it not typical of the right hon. Gentleman that in the morning he sets out his very clear position, but in the afternoon he cannot resist the passing political bandwagon?
Mr Speaker
Order. I said the Prime Minister must be heard, and the Leader of the Opposition must be heard. Both will be heard, however long it takes. It is very clear.
Edward Miliband
Totally pathetic answers. He is the Prime Minister. If he cannot defend the conduct of his own Ministers, his Ministers should be out of the door. He should fire them. He does not even try to defend the Secretary of State and what he did. The Secretary of State told the House on 3 March, in answer to a question from the hon. Member for Banbury (Tony Baldry), that
“today we are publishing…all the consultation documents, all the submissions we received, all the exchanges between my Department and News Corporation.”—[Official Report, 3 March 2011; Vol. 524, c. 526.]
But he did not, because 163 pages have now emerged. The Prime Minister does not defend him over giving confidential information to one party in the case; he does not defend him over collusion; is he really going to defend him about not being straight with this House of Commons?
The Prime Minister
Let me make it absolutely clear that the Culture Secretary, who has my full support for the excellent job that he does, will be giving a full account of himself in this House of Commons this afternoon and in front of the Leveson inquiry, and he will give a very good account of himself for this very simple reason: that in judging this important bid, he sought independent advice from independent regulators at every stage, although he did not need to, and he took that independent advice at every stage, although he did not need to. The way he has dealt with this issue is in stark contrast to the Governments of whom the right hon. Gentleman was a member.
Edward Miliband
I say this to the Prime Minister: while his Culture Secretary remains in place, and while he refuses to come clean on his and the Chancellor’s meetings with Rupert Murdoch, the shadow of sleaze will hang over this Government. It is a pattern with this Prime Minister—Andy Coulson, Rebekah Brooks and now the Culture Secretary. When is he going to realise that it is time to stop putting his cronies before the interests of the country?
The Prime Minister
I have to say to the right hon. Gentleman that he called for an independent judicial inquiry. That is the inquiry I have set up. He agreed the terms of reference. Now he is flip-flopping all over the place. The fact is that the problem of closeness between politicians and media proprietors had been going on for years and it is this Government who are going to sort it out. Whether it is the proper regulation of the press, whether it is cleaning up our financial system, whether it is dealing with our debts: I don’t duck my responsibilities. What a pity he cannot live up to his.
Karl MᶜCartney (Lincoln) (Con)
Q2. Is my right hon. Friend aware of recent very good news in the manufacturing and engineering sectors in Lincoln? Hoval has seen an increase in turnover of over 20% to around £17.5 million; Italian firm Brifrangi has confirmed an investment of circa £50 million in a new tooling press, one of the largest in the world; and Siemens is involved in the first new engineering school in our country for 20 years. Will my right hon. Friend accept my personal invitation to visit Lincoln to see for himself the excellent progress our city is enjoying under his Conservative-led Government?
The Prime Minister
I am very grateful for my hon. Friend’s invitation and will try to take it up. As I said earlier, although there is very disappointing news today about what is happening in our economy, underneath that there is a rebalancing that needs to take place, and is taking place, in terms of manufacturing investment and exports, and in terms of the Government getting behind that, with more investment in apprenticeships and more investments in technical hubs at our universities, like the one at the university of Lincoln, and by cutting business taxes so that we get Britain working and making things again.
Yasmin Qureshi (Bolton South East) (Lab)
On Monday, the Prime Minister said that he was going on an economic rescue mission. Is it not fair to say that that mission has failed spectacularly in the light of the figures released today?
The Prime Minister
The point I would make to the hon. Lady is that the recession we suffered—a 7% contraction of our gross domestic product—was much bigger even than what happened in America. It is worth remembering that the biggest bank bail-out anywhere in the world was not in America; it was here in Britain. Getting out of the recession, the financial crisis and the debt crisis is difficult, painstaking work, but this Government are committed to doing just that.
Gordon Birtwistle (Burnley) (LD)
Q3. Last week, I met the chief executive of the fourth largest manufacturing group in the UK, Unison Engineering, which has a substantial factory in Burnley. He has been instructed by his US board to increase the turnover of his UK operations so as to take advantage of the Government’s industrial strategy. He is concerned about the lack of skills. [Interruption.] Can my right hon. Friend assure me that the Government investment in apprenticeships and university technical colleges will increase over the coming years?
The Prime Minister
What is interesting is that if any Member of Parliament wants to talk about manufacturing success or business success in their constituency, they are shouted down by the Opposition, because all they want to hear is bad news and to talk our economy down. We are investing in skills and putting more money into the apprenticeship schemes and the university technical colleges. I was at Airbus in Filton this week seeing the expansion and growth plans there, and it is good to hear what is happening in my hon. Friend’s constituency.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
Does the Prime Minister agree with his Chancellor, who said in 2008 that
“once…you’ve got a downturn you cannot possibly slash public expenditure”?
Will the Prime Minister stick to his complacent plan of cutting too far and too fast, which has delivered a double-dip recession?
The Prime Minister
Well read. [Interruption.] The point is that we inherited from the Labour party a budget deficit of 11%. The budget deficit we inherited was bigger than Greece’s, bigger than Spain’s, bigger than Portugal’s. If you do not deal with your debts and your deficit, you will never keep interest rates low, and it is low interest rates that offer us the best prospects of getting out of this difficult economic situation we are in.
Jeremy Lefroy
At least half a million children died from malaria last year. On world malaria day, may I thank the Prime Minister for his personal commitment to combating this disease? Will he join me in recognising the international leadership that British scientists, aid workers and volunteers, including Rotarians in Penkridge and Stafford in my constituency, show in combating malaria?
The Prime Minister
I am grateful for the opportunity to join my hon. Friend in wishing the people of Penkridge well. He did rather better in convincing the people of Penkridge to vote for him than I did in 1997. He is absolutely right to raise the issue of malaria on world malaria day. Some 15,000 children die every week from what is a preventable illness. That is why I am proud that Britain is leading on this issue, putting money into the aid budget and malarial bed nets, and making all the scientific advances that he referred to. This is a vital agenda, and even in difficult economic times, we are right to pursue it.
Mark Hendrick (Preston) (Lab/Co-op)
Q5. Does this out-of-touch Prime Minister still believe that the British economy is “out of the danger zone”?—[Official Report, 15 December 2010; Vol. 520, c. 901.]
The Prime Minister
One of the biggest problems we faced on taking office was the danger that financial markets would take the same view of Britain as they took of Greece, Spain and Portugal, where interest rates were rising. That Britain has such low interest rates demonstrates that we have credibility. Difficult decisions are needed to get on top of the debt and deficit, and to deal with public spending, but they are the right decisions, not least because, as the shadow Chancellor once said, low interest rates are the mark of economic credibility.
Craig Whittaker (Calder Valley) (Con)
Q14. The head teachers of Calder and Todmorden high schools in Calder Valley welcome the Government’s educational reforms. [Hon. Members: “Reading!”] They are two schools that never qualified for the Building Schools for the Future programme under the previous Government because they attained far too highly. [Hon. Members: “Reading!”] Will the Prime Minister tell the pupils of those schools when they can expect an announcement on the priority school buildings project to which they both applied?
The Prime Minister
We are investing more in school building than Labour did in its first two Parliaments after 1997. The figure is along the lines of £17 billion during the spending review period. So there are opportunities for new classrooms and buildings, and I am sure that the Secretary of State for Education, who is listening carefully to my hon. Friend, will be in touch with him about their prospects.
Mr Iain McKenzie (Inverclyde) (Lab)
Q6. Did the Prime Minister agree with the hon. Member for Mid Bedfordshire (Nadine Dorries) when she said that the Prime Minister and the Chancellor—[Interruption.]
Mr McKenzie
Did the Prime Minister agree with the hon. Lady when she called him and the Chancellor “posh boys” showing no compassion or understanding for the lives of others? Is that not further evidence that they are out of touch and an explanation for this double-dip recession?
The Prime Minister
I agree with my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) about many, many things.
Andrew Jones (Harrogate and Knaresborough) (Con)
Over the past two years, UK exports have grown by 23%, and even faster to the BRIC. Will my right hon. Friend join me in congratulating the 151 winners of the Queen’s award for enterprise this week on their success in international trade, particularly GSPK Circuits in Knaresborough and Boroughbridge in my constituency?
The Prime Minister
I certainly join my hon. Friend in congratulating that business on its export performance. When we look at some of the fastest-growing markets in the world—whether India, China or some of the south-east Asian markets I visited a few days ago—we see that our export performance in some of those markets, compared with 2009, is up by as much as 60%. As well as those markets, however, we also have to remember our old friends, as it were, and the fact that we still export more to the Republic of Ireland than to Brazil, Russia, India and China combined. So we need to expand our existing markets, but it is far harder work to get into the fast-growing markets of the world.
David Simpson (Upper Bann) (DUP)
Q7. Recently, the Prime Minister conceded that the Government had made an “important mistake” in the handling of the fuel crisis. Would it not be a positive step in correcting that mistake were the Government to scrap the 3p increase in August, in order to help motorists, haulage companies and hard-pressed families in the UK?
The Prime Minister
The Government have actually used about £4 billion of Budget money to keep petrol prices down. They are about 6p lower than they would be under Labour’s plans. Let me update the hon. Gentleman and the House on the issue of the fuel strike. It now looks as if there will be longer before a strike could take place. I am determined that we use that time to ensure that every piece of resilience is in place. The plans we inherited would have allowed the military to provide perhaps 10% of our fuel needs. We have now managed to lift that to about 60% or 70%. We are in a much better place now because of the proper emergency planning that this Government have done, as opposed to the Labour party, which just crosses its fingers and hopes for the best from the trade unions.
Mr David Amess (Southend West) (Con)
Next Wednesday my mother Maud will celebrate her 100th birthday. Living, as she does, five minutes from the Olympic stadium, she has agreed to be Usain Bolt’s pacemaker, in order to give the other athletes a chance. Will my right hon. Friend now call on the indomitable spirit of former Land Army girls such as my mother and encourage our Olympic athletes to go for gold?
The Prime Minister
I will certainly do that. I have written to Maud to congratulate her on this fantastic milestone, and I am sure that as she speeds past Usain Bolt, she will turn round and reflect that the only way is Essex.
Mr Speaker
I am delighted that the Prime Minister has written to her. That makes two of us.
Fiona O'Donnell (East Lothian) (Lab)
Q8. The Prime Minister has spent plenty of time cosying up to News Corporation in return for political support, so—[Interruption.] I can wait. He is therefore well qualified to answer this: when Alex Salmond agreed to act as a lobbyist for News Corp, was he acting in self-interest or in the interests of Scotland?
The Prime Minister
First, I think Alex Salmond can answer for himself. Secondly, this is another issue for the Leveson inquiry—properly set up, properly established—which is going to interview all the politicians, including all sorts of people who cosied up to News International over the years. I think on all sides of the House there is a bit of a need to say, hand on heart, that we all did too much cosying up to Rupert Murdoch—I think we would agree. On that basis, I am sure that Lord Leveson will make some important recommendations.
Andrew Griffiths (Burton) (Con)
Q9. Has the Prime Minister seen the research published today by the TaxPayers Alliance, which shows that there are 3,097 town hall employees earning more than £100,000 and 52 earning more than £250,000? My constituents in Burton cannot understand such exorbitant salaries. What can we do about it?
The Prime Minister
My hon. Friend is entirely right to raise this issue. The important thing that we have done is to make completely transparent the pay in our town halls and local government. Sadly, I believe there is still one local council—a Labour-controlled council in Nottinghamshire—that is not making that information available. Every council should be transparent about how it spends council tax payers’ money.
Barbara Keeley (Worsley and Eccles South) (Lab)
Last year the Prime Minister said that those warning him that cutting too far and too fast would risk a double-dip recession should apologise. Now that he has delivered a double-dip recession, should he not apologise?
The Prime Minister
The point I would make to the hon. Lady is this: we faced a very difficult situation, with an 11% budget deficit. If we had listened to the plans of the Opposition, and spent more, borrowed more and increased our debt, that would have only made the debt crisis worse. How can the answer to a debt crisis be more borrowing? That is the question the Opposition can never answer.
Bob Blackman (Harrow East) (Con)
Q10. After weeks of ducking and diving, Ken Livingstone has given a partial publication of his tax affairs. Sadly, he refuses to publish the tax affairs of Silveta, the company he set up to avoid paying his fair share of tax. Does my right hon. Friend agree that Ken Livingstone has ceased to be the old pretender and has now become the Artful Dodger?
The Prime Minister
I think my hon. Friend speaks for all of London when he makes that point. Ken Livingstone owes the people of London some proper transparency about this company and about his tax bill. There are still several days to go before this key election. He should make that information available. I have to say that I had something of a shock this week, because I have hardly ever agreed with anything Alan Sugar has ever said, but in saying that Londoners should not back Ken, he was spot on.
Mr Jim Cunningham (Coventry South) (Lab)
Q11. Now that the Prime Minister has admitted that he created the economic mess that the country is in, may I be helpful to him and suggest that he drop his ridiculous proposals for regional pay cuts and accelerate the capital programme for schools in Coventry and the west midlands?
The Prime Minister
As I said earlier, we are spending more on capital on schools in this Parliament than either of the first two Labour Parliaments. I am very happy for Education Ministers to look specifically at the case in the hon. Gentleman’s constituency to see what can be done. I also hope that he will join me and invite people in Coventry on 3 May to vote yes for a mayor for Coventry.
Stephen Lloyd (Eastbourne) (LD)
Q13. Every year, millions of British people donate money to charities. They do so for the simple reason that they want to help the cause or help others who are worse off then they are. I would describe those actions by members of the public as honourable, kind and selfless. We have all heard recently that some, but not all, of our wealthy citizens want to donate money to charity only if they can continue to reduce their tax bill. Does the Prime Minister think that their motives are honourable, kind and selfless?
The Prime Minister
We should support people who give money to charity, which is why the Government have expanded gift aid very generously and made available a change to help people with inheritance tax if they leave bequests to charity. As the hon. Gentleman knows, the Budget set out a number of limits to reliefs, and we specifically identified the potential problem for charities. My right hon. Friend the Chancellor will consult very widely on how we can make sure that we encourage philanthropic giving and charities, and what charities do in our country.
Angela Smith (Penistone and Stocksbridge) (Lab)
Q12. The Prime Minister’s dismissive response to the fact that the UK is now back in recession suggests that his mind is on other things. Should he not just sack his Culture Secretary and concentrate properly on the job of sorting out the British economy?
The Prime Minister
I think the hon. Lady would recognise that there is absolutely nothing dismissive about either my reply on the economy or, indeed, what I think we need to do. We are in a difficult economic situation in Britain, just as we see recessions in Denmark, in Holland, in Italy and in Spain. That is what is happening across the continent with which we trade. It is absolutely essential that we take every step that we can to help our economy out of recession: investing in apprenticeships; setting up enterprise zones; cutting business taxes; and prioritising investment in our infrastructure. We are doing all those things, and we will do more to help get our economy out of the mess in which the last Government left it.
Stephen Hammond (Wimbledon) (Con)
Far from being dismissive, the Prime Minister acknowledged that the figures were disappointing. Does he agree that if we are getting out of a debt crisis we should not spend more money? There is no international organisation suggesting that this country change course and spend more money to do so.
The Prime Minister
My hon. Friend is absolutely right. It is not just that there is no international body making that case—there is no business organisation making that case. Indeed, the Institute of Directors and the CBI have both said today that, while these figures are disappointing, we must not give up the low interest rates and the credible fiscal policy that we have, as that would land our economy in the problems that the Opposition left it in.
Mr David Winnick (Walsall North) (Lab)
It is a sorry state of affairs when in just two years the economy is in deep recession and now the Government are deep in sleaze. Same old Tories.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. It relates to the Prime Minister.
Mr Speaker
It may relate to the Prime Minister but, as far as I am concerned, unless I am advised otherwise, points of order come after statements, and the statement—
Mr Speaker
I note what the hon. Gentleman has said from a sedentary position. We will now hear the statement from the Secretary of State for Culture, Olympics, Media and Sport. I call Mr Secretary Hunt.
Leveson Inquiry
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
With permission, Mr Speaker, I would like to make a statement following yesterday’s developments at the Leveson inquiry. Although I intend to respond fully to allegations about my conduct and that of my Department when I present my evidence to Lord Justice Leveson, I believe that it is important to update the House on actions that have been taken as a result of evidence released yesterday.
We are 273 days into a process whose first stage will last until October. This is not the time to jump on a political bandwagon—[Interruption.] What the public want to hear are not my views or those of the right hon. Gentleman the Leader of the Opposition, but the views of Lord Justice Leveson when he has considered all the evidence. I do, however, think that it is right to set the record right on a number of issues, in the light of the evidence heard yesterday at the inquiry. Specifically, on the merger of News Corp with BSkyB, I would like to remind the House of the process that I followed. Throughout, I have followed due process, seeking the advice of independent regulators—something I did not have to do—and after careful consideration, acting on their advice. I have published all advice that I have received from Ofcom and the Office of Fair Trading, together with correspondence between myself and News Corporation, including details of all meetings that I have held in relation to this process.
As part of this process, my officials and I have engaged with News Corporation and its representatives, as well as other interested parties—both supporters and opponents of the merger. Transcripts of conversations and texts published yesterday between my special adviser, Adam Smith, and a News Corporation representative have been alleged to indicate that there was a back channel through which News Corporation was able to influence my decisions. That is categorically not the case—[Interruption.]
Mr Speaker
Order. The House must calm down a bit. The statement must be heard. There will be a full opportunity for questioning of the Secretary of State, as he would expect. Whether he expects it or not, that is what will happen. That is right and proper, but it is also right and proper that the statement should be heard with courtesy.
Mr Hunt
However, the volume and tone of those communications were clearly not appropriate in a quasi-judicial process, and today Adam Smith has resigned as my special adviser. Although he accepts that he overstepped the mark on this occasion, I want to set on record that I believe that he did so unintentionally and did not believe that he was doing anything more than giving advice on process. I believe him to be someone of integrity and decency, and it is a matter of huge regret to me that this has happened.
I only saw the transcripts of these communications yesterday. They did not influence my decisions in any way at all—not least because I insisted on hearing the advice of independent regulators at every stage of the process. I will give my full record of events when I give evidence to Lord Justice Leveson. However, I would like to resolve this issue as soon as possible, which is why I have written to Lord Justice Leveson asking if my appearance can be brought forward. I am totally confident that when I present my evidence, the public will see that I conducted this process with scrupulous fairness throughout.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
I thank the Secretary of State for his statement. Everyone recognises that the £8 billion News Corp bid for BSkyB was of huge commercial importance and that it had profound implications for newspapers and for all of broadcasting, including the BBC. The Business Secretary had been stripped of his responsibility for deciding on the bid because he had already made up his mind against it, but the Culture Secretary too had made up his mind, in favour of the bid, so how could he have thought it proper to take on that decision? Of course he could take advice, but the decision whether he should do it, and could do it fairly, was a matter for him and him alone.
The Secretary of State took on the responsibility, and assured the House that he would be acting in a quasi-judicial role, like a judge, and that he would be transparent, impartial and fair. However, is it not the case that James Murdoch was receiving information in advance about what the Secretary of State was going to do and what he was going to say—information that was given to only one side, which had not been given to those who were opposed to the bid, and before it was given to this House.
Does the right hon. Gentleman think it acceptable that Murdoch knew not only about what he was going to do and say, but, crucially, what the regulator, Ofcom, had said to the Secretary of State on 10 January 2011 and what the bid’s opponents had said to the Secretary of State on 20 and 31 March 2011. Is he really going to suggest to this House that James Murdoch’s adviser, Fred Michel, knowing all this was just a coincidence? Can the Secretary of State explain how Fred Michel, in a series of e-mails beginning on 23 January, was in a position to tell Murdoch the full detail of a statement that the Secretary of State was not going to give to this House until two days later? Whatever interpretation is put on e-mails, there can be no doubt that Michel’s e-mail accurately and in detail described meetings that the Secretary of State had had, and accurately foretold what the Secretary of State was going to do. Either Michel was Mystic Meg or he had been told.
When it comes to the transparency that the Secretary of State promised, there appears to have been a great deal of transparency for Murdoch, but precious little for opponents of the bid or for this House. If, as suggested on the right hon. Gentleman’s behalf in the media, he was negotiating with Murdoch, why did he not tell the opponents of the bid and why did he not tell the House? Will he tell us now whether he believed himself to have been negotiating? Is that what was going on?
On 3 March, the Secretary of State told this House that he had published details of all the exchanges between his Department and News Corporation. In the light of all the information that we now know that Fred Michel had, does he still maintain that that is the case? His special adviser has admitted that his activities at times went too far, and he has resigned, but will the Secretary of State confirm that under paragraph 3.3 of the ministerial code, it is the Secretary of State himself who is responsible for the conduct of his special adviser?
This was a controversial bid. The right hon. Gentleman could have refused to take it on, but he did not. He could have referred it to the Competition Commission, but he did not. His role was to be impartial, but he was not. His conduct should have been quasi-judicial, but it fell far, far short of that, and fell short of the standards required by his office. The reality is that he was not judging this bid; he was backing it, so he should resign.
Mr Hunt
I am hugely disappointed by the right and learned hon. Lady’s response today. She had the opportunity to rise above party politics and work towards a solution to a problem that has bedevilled British politics for many years; instead, she has chosen to jump on the political bandwagon. Let me remind her that the Labour party spent over a decade in power and did nothing other than cosy up to the press barons and their families. She speaks for a party whose Prime Minister, when in opposition, flew half-way round the world, in Rupert Murdoch’s words, to “make love” to him “like a scorpion”. [Interruption.] This is a party whose Prime Minister was godfather to Rupert Murdoch’s daughter and whose Prime Minister’s wife organised a sleepover at Chequers. [Interruption.] I will come on to deal with all the right hon. and learned Lady’s points.
Mr Speaker
Order. I appeal to the House to calm down. I politely but explicitly suggest to the Secretary of State that in addressing these matters, he seeks to address the questions put to him and to address the matters for which he is responsible, which obviously does not include the conduct of other political parties.
Mr Hunt
I will happily do that, Mr Speaker, but I do think that Opposition Members need to show a degree of humility when they deal with these issues because if we are going to solve this problem, it is necessary for the whole House to work together and not to jump on bandwagons.
Let me now deal with the specific points made by the right hon. and learned Lady. She said that I was backing the bid—that I had made up my mind. That is not true. Let me say this. When I was appointed to be responsible for the bid, my views about the bid, some of which had been made public, were explicitly reported to the Cabinet Secretary, who decided that it was appropriate for me to take responsibility for it in a quasi-judicial role, but—this is the crucial point: it is very important—the right hon. and learned Lady must understand that because I had expressed some sympathy for the bid when I was not responsible for it, I changed the process so that at every stage before I made a decision, I obtained the advice of independent regulators, which I carefully considered and which I followed. I put it to the right hon. and learned Lady that if I had been backing the bid, I would not have sought the advice of independent regulators who might well have opposed it.
I made four decisions in this process, and each of those decisions was contrary to what News Corporation wanted. [Interruption.] If Opposition Members are making the very serious allegation that I was supporting this bid and not acting quasi-judicially, they must at least listen to the evidence of what happened.
The first decision I made was that I was minded to refer the bid to the Competition Commission, which is precisely what James Murdoch did not want me to do. I said that I was minded to do it. I then had an obligation to consider undertakings in lieu of a reference to the Competition Commission, and I made my second decision, which was that I would not accept those undertakings until I had received and considered the advice of Ofcom and the OFT on whether they dealt with the plurality concerns. That was something about which James Murdoch was extremely angry. [Interruption.] I had a meeting which was minuted.
The third decision that I made was to extend the period of consultation—again, at any stage I could have accepted those undertakings—and to insist again that Ofcom and the OFT must have full sight of the undertakings, that I would see their advice, and in practice I followed their advice after careful consideration.
My final decision, at the very end of the process, was made at the time of the Milly Dowler revelations. At that stage, I wrote to Ofcom and asked it whether those allegations should have any impact on my decision with respect to accepting the undertakings, because I thought that there was a question mark over corporate governance procedures which might affect any decision to accept them.
Those four decisions were contrary to what News Corporation wanted. The idea that I was backing the bid is laughable.
The right hon. and learned Lady talked about the e-mails between Frederic Michel and me. In his evidence to the inquiry, Frederic Michel also said—[Interruption.] I think that Opposition Members should listen to the evidence that was presented yesterday. Frederic Michel said:
“some of my emails… may incorrectly suggest to a reader that I had contact with the Secretary of State for Culture, Media and Sport, Jeremy Hunt, when in fact my contact was solely with Mr Hunt’s adviser”.
[Interruption.] I accept, and my adviser accepts, that those communications overstepped the mark. However, I am telling the House today that all the evidence makes it absolutely clear that none of those conversations influenced the decisions that I made.
Let me just say this. The right hon. and learned Lady’s party had 13 years in which to do something about this. During the last year of the last Labour Government, the Cabinet discussed the issue of press behaviour and decided to do nothing. In contrast, she faces a Prime Minister and Culture Secretary who set up the Leveson inquiry within two weeks of the Milly Dowler situation, who therefore have put in place a process that, while fully protecting freedom of expression—which is the foundation of our democracy—will oversee some of the most fundamental reforms of press practices in a generation, and who have shown more commitment to transparency and openness than her Government ever did.
Mr John Whittingdale (Maldon) (Con)
Will my right hon. Friend first confirm that, whatever his advisers may have said, the only advice that he took was from Ofcom, and that he followed it? Secondly, does he agree that usually in circumstances such as these the first thing the Opposition do is call for a judicial inquiry, and given that that is precisely what we have, is it not sensible to wait until it completes its work and not jump to conclusions?
Mr Hunt
My hon. Friend is exactly right, and given that the Leader of the Opposition has previously said that he thinks it is right that the Leveson inquiry should take its course—that the most important thing is that it gets to the bottom of what happened, of what Labour did, of what the Conservatives did, and we reach a judgment about that—it is curious that he is now trying to pre-empt its conclusions.
Mr Ben Bradshaw (Exeter) (Lab)
Both the Culture Secretary and the Prime Minister have repeated again today that they always followed Ofcom advice. They did not. Ofcom thought this bid should be referred to the Competition Commission; so did the Business Secretary, so did the Labour Government. Why did the Culture Secretary change that policy?
Mr Hunt
I know that the right hon. Gentleman was disappointed yesterday, as he was looking for a smoking gun that showed that the process had not been properly pursued. The very first decision I took was to say I was minded to refer this bid. That is the proper process. If a Minister wants to refer a bid to the Competition Commission, the proper process is to tell the interested party that they are minded to do so, and it then has the opportunity to come back with undertakings, which the Minister has a duty to consider. That is the process set up by the right hon. Gentleman’s Government in the Enterprise Act 2002, and that is what I was doing.
Mr Don Foster (Bath) (LD)
The Prime Minister reminded us earlier today that for far too long Conservative and Labour politicians and their advisers have been cosying up to the media, and in particular to the Murdoch empire. In the light of that and of the Secretary of State’s own experiences, does he agree that it is inappropriate for a politician to make decisions on media ownership when, however hard they seek to be impartial, politicians will be perceived to be under pressure to meet the wishes of the media barons? Should not these decisions be made openly and independently by the appropriate regulator?
Mr Hunt
My right hon. Friend makes a powerful point. He knows that I have said that I think this is an issue that needs to be considered, because the perception of impartiality is as important as the impartiality itself. We wait with interest to hear what Lord Justice Leveson says.
Mr Tom Watson (West Bromwich East) (Lab)
Is the Secretary of State seriously trying to convince the nation that these incriminating e-mails and texts are all the work of a single rogue adviser?
Mr Hunt
The hon. Gentleman used the word “incriminating.” I said he overstepped the mark, and I think it is very important in situations such as this that due process is followed. The hon. Gentleman wanted an inquiry. He has got an inquiry. Let us listen to the results of that inquiry.
Mark Reckless (Rochester and Strood) (Con)
Does my right hon. Friend agree that what these e-mails show is the shocking extent to which lobbyists exaggerate, embellish and invent the access and influence they actually have?
Mr Hunt
My hon. Friend is absolutely right. There are countless examples in those e-mails of things that simply did not happen—of meetings that were alleged to have taken place not just with me, but with members of my Department, but that simply did not happen. It is very important that we hear all the evidence so that we can get to the bottom of what is truth and what is fiction.
Chris Bryant (Rhondda) (Lab)
Every councillor in the land knows what “quasi-judicial” means. They know that it means that if they are on the planning committee, they cannot tip the wink to anybody on one side or the other, and that they have to be cleaner than clean, whiter than white. The Secretary of State and the Prime Minister have both asserted for the last two years that they had no inappropriate conversations with that woman, Rebekah Brooks, and that every single one of their meetings has been published. May I just give this one final chance to the Prime Minister to come clean on all the meetings, because I think he might find things are going to get very difficult for him later on today?
Duncan Hames (Chippenham) (LD)
We have heard what the Culture Secretary has to say about his own conduct, and I believe him. As for what on earth his office was up to, I hope Lord Justice Leveson gets to the bottom of that. Does the Secretary of State still think that Lord Leveson should be reporting to the Culture Secretary, or should he now report directly to the Prime Minister instead?
Pete Wishart (Perth and North Perthshire) (SNP)
Some 6,800 people are employed by BSkyB in Scotland. They will have been watching the events of the past 24 hours with increasing concern and alarm. What message has the Secretary of State got for them today?
Mr Hunt
We want to have a thriving media industry, and I believe that the great strength of our media industry in this country is that we have a strong BBC and strong competition to the BBC. Those employees play a good part in that, and we want to see all companies in this sector thrive.
Richard Graham (Gloucester) (Con)
We have heard today that there are, indeed, many cases in political history of lobbyists with more of Walter Mitty than the truth to their claims. Perhaps the Secretary of State can help the House today. Fred Michel claimed he had 54 separate conversations with the Secretary of State; will my right hon. Friend confirm how many conversations he did have?
Mr Dennis Skinner (Bolsover) (Lab)
The Culture Secretary’s adviser has now lost his job. Does that not prove the theory that when posh boys are in trouble, they sack the servants? Why doesn’t the Secretary of State do the decent thing: tell dodgy Dave and Gideon, and get out and resign?
Mr Hunt
Adam Smith’s resignation is a matter of huge regret to me. I believe him to be a person of integrity and decency, but my responsibility to this House is to the integrity of this process—the objectivity and impartiality with which this process was conducted—and I believe I have presented evidence to the House that demonstrates that I behaved in a judiciously impartial way throughout.
Mr Speaker
Order. Whatever strong views Members hold on this subject—as on many others—let me just remind them of the importance, as “Erskine May” has exhorted us, of moderation in the use of language in this House.
Jake Berry (Rossendale and Darwen) (Con)
Did the Secretary of State write on his website that he was a cheerleader for the Murdochs?
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
When the Secretary of State for Business, Innovation and Skills was handling this bid, why did the Culture Secretary offer to help Murdoch to influence the process?
Mr Hunt
Let me tell the right hon. Gentleman that anyone who is responsible for any sector, be it the aerospace sector, the chemicals sector or the automobile sector, has to talk to all the people involved in that industry. It is my job to talk to the BBC, to ITV, to Sky and to newspaper proprietors, because I want that industry to be successful. This bid did have some implications for media policy, so it was perfectly proper for me to be apprised of those. What was not right was for me to be involved in the decision-making process, and I was not while it was the responsibility of the Business Secretary.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Does the Secretary of State recognise the conversations attributed to him by Fred Michel?
Mr Hunt
I do not. Throughout the bid process, when I got responsibility for it, the contact that I had with Fred Michel was only at official meetings that were minuted with other people present. The fact is that there is a whole pile of e-mails—54 in total—in which he talks about having contact with me, but that simply did not happen.
Jack Dromey (Birmingham, Erdington) (Lab)
Is the Secretary of State saying that Lord Leveson should report to him, about him?
Sajid Javid (Bromsgrove) (Con)
May I thank the Culture Secretary, a man I know to be of the utmost integrity and honesty, for his statement? The previous Government knew of phone hacking and illegal media practices for years but failed to take any action. May I ask the Culture Secretary to contrast his action with their inaction?
Mr Hunt
In 13 years, there were two Information Commissioner reports, one Select Committee report and two people were sent to prison, yet the Labour party did absolutely nothing. That is why it is totally inappropriate for Labour to be suggesting that this is somehow a Government problem. It is an issue that affects the whole political process, which is why we need to be working together to sort it out.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
The Secretary of State will appreciate that one of the main concerns about the fallout from the phone hacking affair is how widely News International’s tentacles reached into the police and into government. BSkyB launched its bid in June 2010 and Andy Coulson resigned in January 2011, so, irrespective of when the Secretary of State took responsibility for the bid, will he tell the House whether Mr Coulson had any communications with him or with DCMS advisers, in any shape or form, about News Corp’s interest in BSkyB while Mr Coulson was still the Prime Minister’s official spokesman?
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I, too, have seen my right hon. Friend serve this House with great integrity. Could he clarify the role that the independent regulators, the Office of Fair Trading and Ofcom, played in this process?
Mr Hunt
My reason for involving the OFT and Ofcom in this process to a much greater extent than I was required to do under the Enterprise Act 2002 was precisely that I wanted to address the concerns that Members of this House and the public might have about my prejudging this issue. At every stage—I took four major decisions, each of which was not the decision that News Corp wanted—and on every ruling that I made, I carefully considered that independent advice, and after considering it, I followed it.
Tony Lloyd (Manchester Central) (Lab)
The Culture Secretary did not answer the question put by my hon. Friend the Member for West Bromwich East (Mr Watson). Will he be very precise and tell the House now, because this is important evidence, whether he knew of the exchanges between his special adviser and Mr Michel? Did he know of the contents of those exchanges?
Mr Hunt
I knew about his contact—that was authorised. He was authorised to be the point of contact between my Department and News Corporation. What I did not know was the communications themselves—the first time I saw them was yesterday. Nor did I know the volume of those communications or their tone.
Alun Cairns (Vale of Glamorgan) (Con)
Will the Secretary of State explain how referring the BSkyB deal to the Competition Commission makes him a cheerleader for the Murdoch empire?
Mr Hunt
My hon. Friend makes the most important point in this whole process. If one looks at the evidence of the decisions that I actually made, one finds that it is clear that at every stage I actually made the decision that News Corporation did not want. That includes the final decision, which was to ask whether I should take account of the Milly Dowler revelations, which was what precipitated the collapse of the entire bid.
Mr Dave Watts (St Helens North) (Lab)
Is it not the case that the Secretary of State did not need to speak to Murdoch because his right-hand man was feeding Murdoch all the information he needed?
Karen Bradley (Staffordshire Moorlands) (Con)
Will my right hon. Friend tell the House what measures he put in place in this process, over and above what was necessary, to ensure that the process was fair, transparent and open?
Mr Hunt
Absolutely. The most important thing was that when James Murdoch offered undertakings in lieu of a referral to the Competition Commission, which it is his right to do so and my duty to consider, instead of accepting those undertakings, which I was legally completely entitled to do, I said that I would not do so until I had been given proper advice by Ofcom and the OFT as to whether it would be appropriate to do so. When I got that advice, I considered it carefully and I followed it. That is not required by the law, but I chose to do that because of my commitment to the integrity of the process.
Mr Gerry Sutcliffe (Bradford South) (Lab)
Why was the special adviser the nominated person in the Department? If this was so important, as the Secretary of State is saying, why was his special adviser the nominated person?
Mr Hunt
His role was agreed by the permanent secretary, but he was not the only person; we had contacts on all sorts of levels—[Interruption.] Let me explain this to the House. When complex undertakings are involved in a huge merger, the process is very complex and there are, inevitably, a range of contacts. As I say, I have tried to be as transparent as possible in all those contacts. I think that, in this particular case, the contacts overstepped the mark, which is why, regrettably, Adam Smith has decided to resign. But let me point out to the hon. Gentleman that Adam Smith, in his statement, said:
“While it was part of my role to keep News Corporation informed throughout the BSkyB bid process, the content and extent of my contact was done without authorisation from the Secretary of State.”
Mr Sam Gyimah (East Surrey) (Con)
The Secretary of State is a fellow Surrey MP whom I have grown to respect as a model professional. He knew that the BSkyB deal was controversial when the issue was moved to his Department. Will he explain what measures he took to ensure that the bid process was fair, transparent and open?
Mr Hunt
I have talked at length about the role of independent regulators, but let me just make the following response to my hon. Friend: one of the points about getting that independent advice from Ofcom and the OFT was that I published what they advised me to do before I made my decision, so that when I announced my decision the whole country could see whether I had acted in accordance with independent advice, which I did at every stage. That is why this House and the country can be reassured that this extremely difficult bid was conducted with scrupulous impartiality.
Mr Gregory Campbell (East Londonderry) (DUP)
The Secretary of State referred in his statement to the “volume and tone” of the communications of his adviser not being appropriate. Does the Secretary of State accept that either he followed due process or he did not? If he followed due process, he should be here today fighting in defence of his innocence. If he is guilty, or if he feels that he did not follow due process, there should be due humility. Why is he doing neither?
Anna Soubry (Broxtowe) (Con)
Will the Secretary of State assure people in my constituency and throughout the country that at all times in this process he acted with impartiality and integrity?
Mr Hunt
I absolutely did and I am grateful to my hon. Friend for saying that, but we are very keen in all these processes to learn the lesson that the appearance of impartiality is also very important. That is why today the Prime Minister has asked the Cabinet Secretary to write to all Departments to clarify the rigorous procedures that Departments should have in place for handling all cases of a quasi-judicial nature and said that it is vital that in dealing with these cases all contacts by Ministers, officials and special advisers are carefully controlled and properly recorded so that the independence, integrity and impartiality of the process are upheld and, just as important, seen to be upheld.
Mr Jamie Reed (Copeland) (Lab)
In the past 40 minutes I have watched the Prime Minister give the Secretary of State answers to the questions that he is being asked. Does the Secretary of State agree with the Prime Minister that the next great scandal in British politics is lobbying?
Mr Hunt
I think that forewarned is forearmed. In this process, we have seen the role of one corporate affairs adviser, and that is why this Government are conducting a review at the moment to consider the role of lobbyists and to ensure that we have proper transparency in the entire process.
Iain Stewart (Milton Keynes South) (Con)
Will the Secretary of State comment on the allegation that he went to see “Swan Lake” five days after reportedly speaking to Fred Michel?
Mr Hunt
Just one of the slightly curious e-mails that Fred Michel sent suggested that he had called me just before I went to see “Swan Lake”; I actually went to see it five days later. That is why I think it is very important that we hear all the evidence before making a judgment on the basis of these e-mails.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Secretary of State said yesterday and has repeated in his statement today that he has written to Lord Justice Leveson asking to accelerate when he gives his evidence. Given that others were implicated in yesterday’s revelations, including Alex Salmond in Scotland, is it not now incumbent on them to do likewise so that they can give evidence on oath to clear up these issues?
Mr Hunt
There are questions for politicians of all parties to answer in this process. Obviously, we have an independent judicial review and it is for Lord Justice Leveson to decide the timings, but it is very important that all parties engage constructively in this process, because—and these are the words of the right hon. and learned Member for Camberwell and Peckham (Ms Harman) on “The Andrew Marr Show”—this is an opportunity to solve a problem that has bedevilled politics for a very long time. That is why constructive engagement with this process, not jumping on bandwagons, is the way forward.
David Rutley (Macclesfield) (Con)
Will my right hon. Friend confirm to the House that the process he describes was authorised and approved not just by the Cabinet Secretary but by the permanent secretary at the DCMS?
Mr Hunt
I can confirm that the permanent secretary was closely involved in this very important decision at every stage of the process. In particular, he gave me strong advice about how to ensure that the process was handled objectively and fairly and was seen to be handled objectively and fairly.
Kevin Brennan (Cardiff West) (Lab)
May I remind the Secretary of State that on 20 January 2011 I, as a former Minister with responsibility for competition policy, advised him in this House to hand over the decision to somebody else because of his own previous role with BSkyB and the Murdochs? Are not the facts that he did not do that then and that he used Adam Smith as his invisible hand two monumental errors of judgment?
Mr Hunt
If I used Adam Smith as my invisible hand, why did I take four decisions that went completely against what News Corporation wanted? This was a quasi-judicial process, which I took enormous trouble to ensure was performed objectively and fairly. I have explained to the hon. Gentleman and to the House many times the steps that I took to do that.
Andrew Bridgen (North West Leicestershire) (Con)
Does the Secretary of State agree that Fred Michel’s view that the Business Secretary “saw no problem with the bid” demonstrates the fantasy world that that man appears to be living in?
Mr Hunt
The evidence would certainly suggest that that was also an exaggeration. That is why we must hear all the evidence submitted to the Leveson inquiry from all sides and allow Lord Justice Leveson, who is truly independent in this process and has no political bandwagon to jump on, to come to his considered conclusions.
Mr Tom Harris (Glasgow South) (Lab)
In my experience, Secretaries of State speak more to their political advisers than they do to their Ministers or, indeed, to members of their own families. The House is being invited to believe either that the relationship between the Secretary of State and Adam Smith was so dysfunctional that the Secretary of State was unaware of the extent and nature of the communication between Adam Smith and News Corp or that it was a good relationship, in which case the Secretary of State must, as the code of conduct states, take full responsibility for the conduct of his political adviser.
Brandon Lewis (Great Yarmouth) (Con)
The Secretary of State’s integrity is highlighted by the meticulous way he went through the process, outlined at the time and now, taking independent advice. As we have heard today, that, together with the gap between some of the evidence that we have heard over the past 24 hours and reality, surely highlights why we should do as the Leader of the Opposition said yesterday and wait for the inquiry to finish and listen to what Lord Leveson has to say.
Mr Hunt
My hon. Friend is absolutely right. This is a huge opportunity to get things right. We have heard evidence that clearly has some flaws in it, and anyone looking at it sensibly and objectively would say that we need to hear all the evidence and not jump to conclusions.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
Will the Secretary of State publish all communications between his office and that of Alex Salmond in relation to the takeover bid?
Mr Peter Bone (Wellingborough) (Con)
I thank the Secretary of State for coming to the House and for the manner in which he is answering questions. The only thing that I think affects Parliament is the allegation by the right hon. and learned Member for Camberwell and Peckham (Ms Harman) that a statement to Parliament was leaked in advance. Will the Secretary of State clear that up and say that it is absolutely untrue?
Mr Hunt
There are allegations in an e-mail that that did not happen, and I am unable to say to the House today what the truth or otherwise was of the communiqué of the account of a conversation made by Fred Michel, which we know in other instances contained a number of exaggerations. But that is exactly why we have Lord Justice Leveson looking into the whole matter. He is independent—a High Court judge—and will get to the bottom of it.
Barry Gardiner (Brent North) (Lab)
The Secretary of State has said that he did not know the content of the communications between his special adviser and BSkyB, but he did know that they were happening and he assured the House that he would publish all the communications between his Department and BSkyB. Why were those communications, which he did know of—even though he says he did not know their content—not included? After the meeting on 23 December at which we now know the Prime Minister discussed the bid, did the Prime Minister act in a transparent manner by communicating on 23 December or thereafter what he had said to the Department either in person to the Secretary of State or through his officials or advisers?
Mr Hunt
The Prime Minister did not communicate with me any conversations he had had because he was not responsible for this bid. I was solely responsible for the bid. I did not know the content of the communications until yesterday when I saw them, nor did I know their volume. I knew that Adam Smith was authorised to be one of a number of contact points within my Department, but having seen those communications it is clear that the volume and content were inappropriate. What is significant for this bid is that they did not in any way at all affect my decisions. The evidence for that is very simple: the decisions I took were not the decisions that News Corporation wanted.
Michael Ellis (Northampton North) (Con)
The Secretary of State is a man of honour and substance. I have just learnt that Rupert Murdoch has just told the Leveson inquiry that the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), telephoned him and told him that he had “declared war” on him when he learned that The Sun newspaper had switched sides to the Conservatives. Does the Secretary of State think that the Opposition are using this as a self-serving opportunity to bash News International?
Geraint Davies (Swansea West) (Lab/Co-op)
Given the intimate relationship between any special adviser and their Secretary of State, is the right hon. Gentleman seriously contending that he did not know the content and the volume of what was transmitted? Why did he not release all the content when he promised to do so?
Mr Hunt
I did not know the volume and content of those text messages until yesterday. I have said that. My former special adviser has said that he had those communications without authorisation from me, but they are now published and that is why we have taken the action we have.
Mr David Burrowes (Enfield, Southgate) (Con)
I do not know Mr Michel, but I do know that the Secretary of State is a man of integrity and honesty. Will he make it crystal clear whether he recognises any of the conversations that have been attributed to him in Mr Michel’s e-mails?
Nick Smith (Blaenau Gwent) (Lab)
During this process, why did the Secretary of State not manage his special adviser properly, to ensure his office acted with integrity?
Stephen Phillips (Sleaford and North Hykeham) (Con)
“Sentence first—verdict afterwards” may well be a principle that is sufficient in Alice in Wonderland, but it is not the principle of English law, it is not the principle of public life and it is certainly not a principle that ought to be observed in this House. Does my right hon. Friend share my disappointment that the opportunism that we have heard from the right hon. and learned Member for Camberwell and Peckham (Ms Harman) today demonstrates contempt for due process—the precise form of contempt of which he is himself accused?
Derek Twigg (Halton) (Lab)
It seems strange that the Secretary of State brings a special adviser into the centre of Government on a very commercially difficult contract or situation, and does not know what he is doing. But may I ask the Secretary of State a very simple question: why did the permanent secretary decide that the contact point would be a special adviser and not a civil servant?
Mr Hunt
Adam Smith was a part of the process that was authorised by the permanent secretary. But he was not the only point of contact—there were many, but he was one of the points of contact. You need to do that. [Hon. Members: “Why?”] Well, we set up a process that was approved by the permanent secretary, and we also put in place many safeguards to make sure that my decisions were taken objectively, and seen to be taken objectively. I have to say to the hon. Gentleman that there is no evidence whatsoever, looking at my actual decisions, that any of those conversations had any influence on them whatsoever.
Charlie Elphicke (Dover) (Con)
I congratulate the Secretary of State on his statement. Under this Government we have seen action on phone hacking, action with the Leveson inquiry, action on media regulation reform, and importantly, the Secretary of State tells us, no action in favour of the Murdoch empire in all the decisions that he made. Does he agree that that is in sharp contrast to all the actions of the previous Government which allowed the bent and dysfunctional media culture to be perpetuated in this country?
Mr Hunt
That is absolutely right, and that is why we are trying to draw a line under what happened under previous Governments of all colours, and trying to sort this problem out. I think it is time that Labour Members took a responsible attitude, because this is an opportunity to do something about this problem and we are trying to do so honestly and conscientiously.
Bill Esterson (Sefton Central) (Lab)
The more that Government Back Benchers claim that the Secretary of State is a man of integrity, the less the public are likely to believe them. My hon. Friend the Member for Halton (Derek Twigg) asked whose suggestion it was that a special adviser—
Mr Speaker
Order. The hon. Gentleman should not impugn integrity. [Interruption.] Order. I do not require any assistance from any Government Back Bencher; I am perfectly capable of handling this matter myself and that is what I am doing, and they should be quiet. The hon. Member for Halton (Derek Twigg) asked a question; it was answered. The hon. Member for Sefton Central (Bill Esterson) should now ask his question, but without the aspersions. Let us just have the question.
Bill Esterson
Thank you, Mr Speaker. To answer the question, we need to know whose suggestion it was that Adam Smith should be the point of contact for News Corporation and why the key contact was a special adviser, not a civil servant.
Mr Hunt
We will look into all the processes—[Interruption.] We are very happy to learn lessons about the way this was structured. The hon. Gentleman can pick on one element of what happened, but he should not ignore the big picture. The big picture was that we put a huge lock in the process to make sure that my decisions were impartial and seen to be impartial, and that was the involvement of independent regulators—something that we did not have to do, but that we chose to do. That, in the end, is what demonstrates that my decisions were taken on the basis of objective evidence.
Mr Robert Buckland (South Swindon) (Con)
In its rush to judgment, is the Labour party not in danger of cocking a snook and undermining the Leveson process itself?
Mr Hunt
I do wish that Labour would allow these issues to be considered in a calm manner, because they are very, very difficult issues. We need to get the right solution. We are not saying that we got everything right in our party over the years; we are saying that there is a process of reform that needs to happen—very importantly, a process of reform that protects freedom of expression, which is the foundation of our democracy, and we want to work with all parties to sort this out. That is the way to deal with this issue—not the rank opportunism that I am afraid we have seen this morning.
Mr Andy Slaughter (Hammersmith) (Lab)
On the key issue of reference to the Competition Commission, the Secretary of State did not take independent advice, so his protestations that he did not always act in Mr Murdoch’s interests sound rather lame. Is he not in fact following his own office’s advice to Murdoch, which is to find some political cover for a decision that he had already taken?
Mr Hunt
I did take the independent advice. The independent advice was that this should be referred to the Competition Commission, and I immediately did as I am required to do in the legal process: I wrote to News Corporation and said, “I am minded to refer this to the Competition Commission.” It then has the right to offer undertakings in lieu, and I have a duty to consider those undertakings. I then wrote to the independent regulators again, to get their opinion before I took any further decisions. We have been scrupulously fair in this entire process. The proof of the pudding is that we took decisions that News Corporation did not like.
Robert Halfon (Harlow) (Con)
I believe that the success of the Olympics shows my right hon. Friend to be an outstanding Secretary of State. Does he agree that it is wrong to jump on the political bandwagon of resignation before knowing the full facts?
Robert Flello (Stoke-on-Trent South) (Lab)
The Secretary of State has had three opportunities—
Mr Speaker
Order. The trouble with the hon. Gentleman is that he is as excitable as he is good-natured. He is a very amiable fellow, but we do not need the hon. Gentleman’s advice on decorum. He should calm himself and take whatever tablets are required for the purpose.
Robert Flello
Thank you, Mr. Speaker. The Secretary of State has had three opportunities to answer the question about why Adam Smith was appointed to be the lead contact. Let me give him a fourth opportunity to stand up and give some information to the House, unlike last year, when he was supposed to release documents to the House.
Mr Hunt
All the roles in that process were agreed by the permanent secretary. I do not know what greater level of independence the hon. Gentleman wants for that decision, but let me tell him that we could not have been more transparent and more determined to make sure that the whole process was fair. We know from what happened yesterday that everything did not go right in the process. That is why, unfortunately, Adam Smith has chosen to resign—because some of his contacts were inappropriate. But the crucial question is whether any of that communication affected my decision, and it did not.
Simon Kirby (Brighton, Kemptown) (Con)
Should not the Opposition stop playing party politics and wait for the outcome of the inquiry?
Ian Lucas (Wrexham) (Lab)
Will the Secretary of State confirm that he requested that Adam Smith be the point of contact with News International?
Mr Hunt
I will not confirm it because I do not think it was a process that was—[Hon. Members: “Answer.”] I am trying to answer the question, with the greatest respect to hon. Members. I do not think the process was me asking for certain people to play certain roles. It was a more fluid process than that, but the structures that we ended up with were ones of which the permanent secretary approved. That is the crucial point.
Stephen Mosley (City of Chester) (Con)
The previous Government discussed in Cabinet whether to hold an inquiry into phone hacking. Why does the Secretary of State think they chose not to?
Diana Johnson (Kingston upon Hull North) (Lab)
The ministerial code is very clear that the Minister is responsible for the actions of his special adviser. On that basis, was the Secretary of State negligent in not finding out what his special adviser was doing and controlling him? For the fifth time, did the Secretary of State ask for him to be appointed as the point man?
Mr Hunt
For the fifth time, the arrangements were approved by the permanent secretary. I do not think there was any process of me asking for certain people to play certain roles. As I said, I think it was a more fluid process than that, but the permanent secretary approved the processes that were happening.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I, too, know the Secretary of State as a man of great integrity and honour. Does he agree that we ought to await the outcome of the Leveson inquiry before jumping to very dangerous conclusions?
Mr Hunt
My hon. Friend is absolutely right. When it comes to the relationship between the press and politicians, we are all partial to a certain extent. Some of us are in government and some of us in opposition. We all have different relationships. Because of my understanding of that, I tried to construct the process for the BSkyB bid to be as objective as possible. If we are to find a way forward, we need to ask the advice of someone objective, someone impartial, someone who is outside the political process. That is why I thought we had cross-party agreement that we would set up this very detailed process and let it run its course.
Anas Sarwar (Glasgow Central) (Lab)
It is right that the Secretary of State has made a statement to the House today. Sadly, our First Minister has not shown the same respect to the Scottish Parliament or to Scotland. Given the revelations yesterday and the revelations coming out of the First Minister’s office today, is it not right that Alex Salmond gives evidence as soon as possible to the Leveson inquiry and so does his special adviser, Kevin Pringle?
Jason McCartney (Colne Valley) (Con)
Why did the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—I would never refer to him in an ungracious and ungentlemanly way as “dodgy Gordon”—never once raise the issue of phone hacking with Rupert Murdoch?
Mr Speaker
Order. I was just waiting to see what part of the question engaged the responsibility of the Secretary of State, but I am afraid the answer was none of it.
Gavin Barwell (Croydon Central) (Con)
I have a high regard for the work that the Secretary of State has done, particularly in relation to the Olympics, which are coming to our great city in a few weeks. On the specific issue of the statement that he has given, can he tell the House when he hopes to give evidence to the Leveson inquiry? It is in his interest and in the interest of us all that we hear his full evidence as soon as possible.
Ian Murray (Edinburgh South) (Lab)
According to the e-mail trail that was released yesterday, a day after Alex Salmond asked for help to smooth the way for The Sun to support the Scottish National party, News Corporation knew about a phone call scheduled between Alex Salmond and the Culture Secretary to lobby on behalf of the BSkyB bid. Who set up that call and how did News Corporation know about it?
Mr Ben Wallace (Wyre and Preston North) (Con)
Does my right hon. Friend share my curiosity as to why it was the deputy leader of the Labour party who chose to respond to his statement today, rather than the hon. Member for Bury South (Mr Lewis), the shadow Secretary of State? Could it—
Mr Speaker
Order. The hon. Gentleman is asking a question that is completely irrelevant to the terms of the statement. [Interruption.] It is simply not relevant. The hon. Gentleman should go and do his homework.
Fiona O'Donnell (East Lothian) (Lab)
One of the more bizarre revelations has been the taste in classical music and ballet of the Secretary of State. I believe we may just have witnessed his swan song. Why, in response to a parliamentary question from my hon. Friend the Member for Bury South (Mr Lewis), did he say that he had no locus to intervene when the Business Secretary was dealing with the matter, yet today he told us that he did offer to help? Which is it?
Mr Hunt
I made absolutely no interventions seeking to influence a quasi-judicial decision that was at that time the responsibility of the Secretary of State for Business. However, it is my responsibility to understand what is going on in the media industry and the impact of this very important sector, which employs thousands of people. That is why I was interested to find out what was going on.
Mr Speaker
Order. For the benefit not of the House, but of those who are listening to and interested in our proceedings, I make the factual observation that a request for a statement by the Secretary of State for Culture, Olympics, Media and Sport very properly comes from the shadow Secretary of State for Culture, Olympics, Media and Sport, rather than from the shadow Secretary of State for International Development.
Sheila Gilmore (Edinburgh East) (Lab)
The very many people throughout the country who wrote to us when the responsibility for the decision was transferred to the Secretary of State will now feel that they were absolutely right and the Government were absolutely wrong. Can the Secretary of State explain why he is such a poor manager of his staff that he did not know what messages were going out under the authority of the special permission to communicate?
Mr Speaker
Order. The proceedings are becoming rather rowdy. [Interruption.] Order. The Secretary of State’s answers must be heard with proper courtesy.
Mary Macleod (Brentford and Isleworth) (Con)
I believe that my right hon. Friend is a man of exceptional talent and integrity. Does he agree that in this House we should believe that people are innocent until proven guilty, and the right way to get an answer to this issue is through the Leveson inquiry?
Jonathan Ashworth (Leicester South) (Lab)
Who suggested to the permanent secretary that Mr Smith should have the role of the go-between between the Department and News Corporation? Presumably a submission went to the permanent secretary and to the Secretary of State. Will he put that submission in the Library? Did he have any conversations with the permanent secretary about the appropriateness of a politically appointed special adviser having that role, and not a civil servant?
Gavin Williamson (South Staffordshire) (Con)
Will my right hon. Friend tell the House whether he is a godfather to any of Mr Murdoch’s children and whether he agrees that the Labour party is showing a fair amount of brass neck?
Mr Speaker
Order. For the benefit of the hon. Gentleman and as a reminder to the Secretary of State, I point out that the statement the Secretary of State has offered the House is on the Leveson inquiry, not godparents. I think that we are clear on that.
Lilian Greenwood (Nottingham South) (Lab)
Responsibility for the management and conduct of special advisers rests with the Minister. Will he admit that he showed poor judgment and failed properly to manage Mr Smith in such a sensitive role?
George Freeman (Mid Norfolk) (Con)
The issues raised by the statement go to the heart of the important matter of media regulation. My constituents watching today will have seen a Minister with an unblemished record and the highest integrity carefully answering questions at the Dispatch Box without bravura in the spirit of transparency, in stark contrast to the hysterical, populist and demeaning behaviour of Labour Front Benchers, who have everything to be embarrassed about when it comes to their 13 years in office.
Paul Blomfield (Sheffield Central) (Lab)
Will the Secretary of State take this final opportunity to throw light on a critical question: what discussions did he have with his permanent secretary, and what advice did he offer, on the appointment of Adam Smith as the key contact?
Points of Order
Caroline Flint (Don Valley) (Lab)
On a point of order, Mr Speaker. Yesterday, in answer to a parliamentary question, the Government revealed that, despite rejecting nearly 30,000 families who applied for help with insulation through Warm Front—[Interruption.]
Mr Speaker
Order. It would be helpful if Members had the courtesy not to yell “Well done” when a point of order is being raised. People cannot complain about other people’s parliamentary manners on the one hand and then display a deficit on their own part on the other. Let us have a bit of order.
Caroline Flint
Thank you, Mr Speaker.
This is very important for families across the country facing high energy bills. The Government revealed that, despite rejecting nearly 30,000 families who applied for help with insulation through Warm Front, there was an underspend of over £50 million last year. That comes on top of information I obtained last week showing that the energy companies will not meet the obligations Labour put on them to help households with energy efficiency. Given that the House might prorogue before Energy and Climate Change oral questions next Thursday, is there any indication that DECC Ministers plan to come to the House and explain how they have left Warm Front in such a shambles?
Mr Speaker
I have had no such indication. The right hon. Lady and I came into the House together in 1997 and, on the strength of knowing her for 15 years, I know that she is not inclined to let go of the bone.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. Last July the Prime Minister—I tried to warn him that I would raise this point of order; obviously he has now left the Chamber—published a list of all the meetings he had had with proprietors, editors and senior media executives between May 2010 and July 2011. It details only one meeting with Rupert Murdoch between May and July 2011. However, this afternoon Rupert Murdoch—this has been published by the Leveson inquiry—made it clear that there were meetings with the Prime Minister on 18 May, 25 May, 21 July, another on 21 July, and 22 July. My point of order is to ask you whether something that is laid in the Library of the House is just as much a matter of privilege as something that is said. In other words, if someone has tabled something in the Library that has misled the House, is that just as serious a matter as something said in the Chamber?
Mr Speaker
All Members, including the Prime Minister, are responsible for the accuracy of what they say to the House, and my implicit assumption is that that includes material lodged with the House. I am happy to take further advice on that, but there is an encouraging nod from the Clerk of the House from a sedentary position, and that provides me with succour. Beyond that, I simply say that Members should be careful what they say if—I emphasise if—they are not asking a question, but making an accusation. I say that simply for the general knowledge and enrichment of the House. I am grateful to the hon. Gentleman for his point of order.
Suicide (Prevention)
Dr William McCrea (South Antrim) (DUP)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to set up a body to establish a public initiative for the prevention of suicide and self harm, to work with internet providers and others to reduce access to information on the internet and through other sources on methods of suicide and to develop a system of alerts and blocks for internet searches relating to suicide; and for connected purposes.
After choosing suicide prevention as the subject of my ten-minute rule Bill, I was introduced by my hon. Friend the Member for North Antrim (Ian Paisley) to the Public Initiative for the Prevention of Suicide and Self-harm, an organisation, based in Duncairn gardens in Belfast, that endeavours to work with those who have attempted suicide or are contemplating suicide and the loved ones of those who have done so. I have been deeply humbled by the dedication of this organisation and am happy to work with it, and indeed others like it, to do all I can to make a difference.
It is true that when someone loses a loved one to depression and suicide, little can be said that will really comfort them. The pain of such a loss is unimaginable and the hurt is inexplicable, and only those who have walked that lonely road have any real understanding of the multiplicity of feelings that wreck the mind. Many families bereaved through suicide regret that they did not recognise the signs that something was wrong and, therefore, carry guilt for many years. To such people we must bring a message of hope. Although their intense feelings of grief can often be overwhelming and at times frightening, it is true that healing can yet come.
The words that sum up the work of PIPS are “planting the seeds of hope”, and I trust that my Bill will play at least a small part in forwarding that worthy cause. The main thrust of the Bill is to gain help for those who feel suicidal and are vulnerable to the influence of others. Sadly, there is a great need for a change in public attitudes, and we as parliamentarians have a part to play in increasing awareness and understanding about suicide as a major public health problem. For too long this subject has been hidden and few desire to talk openly about it, as if silence on the subject will make it go away. Nothing could be further from the truth. We need openness and we must do everything we can to help prevent suicide and provide urgent help and hope for those who are contemplating it.
Therefore, let us consider suicide and depression and its impact on the community. No matter what community someone says they come from, the pain and the question “Why?” will hurt just the same. Statistics show that people living in the most economically deprived areas are at a high risk of depression, self-harm and suicide. To take an example from Northern Ireland, the number of suicides has increased by more than 60% in north and west Belfast.
Through its experience of working in the area of suicide prevention, PIPS has been able to identify some key themes associated with depression and suicide in our community. With the economic situation and the downturn, many people have experienced the pressure of mounting debts and the threat of bankruptcy or repossession. The recession has made that worse, with rising unemployment, and it is often those experiencing the highest levels of economic deprivation who are hit hardest. The credit crunch is also likely to affect young people from deprived backgrounds, as those who are academically unqualified will have greater difficulty than ever getting jobs in this new climate.
Other issues that affect the emotional well-being of our young people are a lack of coping strategies and a lack of communication skills. Instead of spending time talking to family and friends, so much of the communication of our young people nowadays is non-verbal. There is texting, Facebook, chatrooms, e-mail and internet gaming instead of face-to-face communication, and that may leave some young people unable to express their feelings when they experience the difficult times that we all encounter.
It is therefore important for us all to recognise the signs in our family and friends which could signal that something is deeply troubling them—that they may have a problem. People need to know that they are not on their own and where they can get help. We need to be more aware, to ask, “Are you okay? Do you want to talk?” and, of course, to be there for them when they desire to talk. I remember a young man at 2 o’clock in the morning in a hospital bed, saying to me, “I wanted to talk, but nobody wanted to listen.”
The end of personal relationships and the breakdown of the family unit all take their toll in today’s society. Depression, suicide and self-harm are issues that do not discriminate; they affect everyone and touch whole families and entire communities. Suicide occurs in persons of all ages and backgrounds, but certain groups of people are at an increased risk of suicide attempts. These include persons with a psychiatric illness and those with a history of attempted suicide.
Almost 1 million people worldwide die by suicide each year. That is more than in all the wars that take place throughout the world. Every year there can be anywhere from 10 million to 20 million suicide attempts, making suicide the 8th leading cause of death in males and the 16th leading cause of death in females. Those statistics are most prevalent among teenage boys aged 15 to 19 years old and men of 20 to 24 years of age. The devastation that it creates makes it a public health issue.
In Northern Ireland last year, 59 people died on our roads, yet 313 people died by suicide. What if that had occurred on our roads? What would the professionals, the politicians and the general public have to say then? Suicide is not universally preventable, but it has been estimated that up to 80% of suicide victims display some warning signs or symptoms.
Many turn to the internet to seek the comfort and guidance that they cannot find in their daily lives, but, although we must recognise the internet as an important resource in today’s society, we must be mindful of the fact that there are websites and chatrooms which encourage the vulnerable, the lonely and the depressed to consider taking their own lives.
Many young people talk about “catching the bus” when they refer to seeking information on the internet about suicide. Organisations such as PIPS believe that, when certain terms are used to access information on suicide or self-harm, a “pop-up” should appear, informing the individual of the help and support that is available. A gatekeeper or guardian should be in place to monitor websites, and they should have the power to forward information to the appropriate authority with a view to having the website closed down. A complaints procedure should also be in place. I feel that as young people today are becoming more insular and relying more on computers to interact socially, that would make a significant contribution to lowering the levels of suicide and of self-harm which are sadly prevalent in today’s society.
In conclusion, there is no single approach to suicide prevention. It requires a co-ordinated approach and a combined effort not only from public services and organisations, but from the private sector, voluntary groups and individuals. I believe, however, that this Bill can represent a significant step in addressing a complex issue that devastates too many families and claims too many young lives. The challenge is now before this House and this Government to do something in response to the call for action. For too long, too many have passed on by because the sorrow and grief of suicide has not touched their particular family. I have pleasure in presenting this Bill to the House.
Question put and agreed to.
Ordered,
That Dr William McCrea, Ian Paisley, David Simpson, Lady Hermon, Ms Margaret Ritchie, Naomi Long, Kate Hoey, Fiona Bruce, Andrew Percy, Mark Pritchard, Paul Goggins and Mr Frank Field present the Bill.
Dr William McCrea accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April and to be printed (Bill 333).
Civil Aviation Bill (Programme) (No. 2)
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I beg to move,
That the Order of 30 January 2012 (Civil Aviation Bill) (Programme) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration and proceedings on Third Reading shall be taken on two days in accordance with the following provisions.
Consideration
3. Proceedings on Consideration shall be taken on the first day and shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
Third Reading
4. Proceedings on Third Reading shall be taken on the second day and shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement.
If the House agrees to the programme motion, consideration of the Bill will be taken today, and Third Reading will take place after the Queen’s Speech and last for up to two hours. The reason why Third Reading will take place on another day is that this is a carry-over Bill, and, if it is to be successfully carried over, this House must retain ownership of it until after the Queen’s Speech and pass it on to the other place in the next Session.
The proposals in the Bill were subject to extensive consultation, and to pre-legislative scrutiny by the Select Committee on Transport, for which I am grateful. The Bill also received very thorough scrutiny in Committee, and I thank Members for that. I also welcome the extent of cross-party support for much of the Bill, and I am confident that today’s debate on Report will maintain the high standards and the well-informed contributions that we have seen in the House throughout the Bill’s consideration.
Question put and agreed to.
Civil Aviation Bill
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:35 - The House divided: - Ayes: 205 / Noes: 269 - Question accordingly negatived.
18:48 - The House divided: - Ayes: 204 / Noes: 274 - Question accordingly negatived.
19:01 - The House divided: - Ayes: 203 / Noes: 273 - Question accordingly negatived.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
Amendment 8, page 13, line 17, clause 18, at end add—
‘(3) A licence must include an obligation on licence holders to procure and publish annual surveys of passenger satisfaction, including but not limited to—
(a) baggage handling services, and
(b) arrangements for delays affecting air passengers.’.
Amendment 9, page 13, line 17, at end add—
‘(3) A licence must include provisions requiring the holder of a licence to develop passenger welfare plans.’.
Amendment 10, page 13, line 17, at end add—
‘(3) A licence must include provisions requiring the holder of a licence to provide support for stranded passengers at airports.’.
Jim Fitzpatrick
Mr Speaker, it is a pleasure to see you still in the Chair. I think we can promise you a quieter ride than you experienced earlier in this session—[Interruption.] And it is a pleasure for me to welcome Mr Deputy Speaker to his place. It is nice to know that Mr Speaker left as a happy individual.
New clause 2 and amendments 8, 9 and 10 relate to the passenger experience and to the licensing system. On the Minister’s words about the programme motion, I note the great consensus on the Bill. There are still a few areas of disagreement, but I am sure that the House will generally welcome the Bill; Opposition Members certainly do.
New clause 2 deals especially with those with disabilities, and its provisions were ably spoken to in Committee by my hon. Friend the Member for Scunthorpe (Nic Dakin). The Civil Aviation Authority’s briefing on Report was sent to us by its Government relations officer, Ms Sandra Webber, and it states:
“The licence regime should minimise the distortions associated with regulatory intervention. In response to a request for advice from the Secretary of State, the CAA published an indicative licence to assist Parliament in its scrutiny of the Bill. It illustrates, for example, one possible approach whereby a licence could include provisions aimed at strengthening airports’ operational resilience to ensure they are much better prepared to avoid the passenger disruption previously experienced during severe weather.”
We very much agree with that approach.
My hon. Friend the Member for Scunthorpe, as I have said, led in Committee on the provisions of new clause 2, and we heard a number of moving speeches by colleagues on both sides of the House, relating to the embarrassment, difficulties and indignity experienced at airports here and abroad by constituents with disabilities, and encouraging the Government to address those issues and to ensure that best practice is rolled out right across the piece.
Amendment 8 states that a licence
“must include an obligation on licence holders to procure and publish annual surveys of passenger satisfaction”
on “baggage handling” and “arrangements for delays”. We included the words “but not limited to” because in Committee, the Minister rightly drew attention to the fact that the UK Border Agency is subject to the Home Office and would therefore have been outwith the scope of our original amendment. We have omitted that suggestion. However, we hope that the phrase
“including but not limited to”
will give licence holders the opportunity to collate the data that the hon. Member for Amber Valley (Nigel Mills) said it would be appropriate for the CAA to publish on behalf of airports or for airports to publish on their own behalf because they would be of interest.
Nigel Mills (Amber Valley) (Con)
I am grateful to the hon. Gentleman for reminding us of the long debate that we had in Committee. Does he agree that recent news stories about delays at Heathrow have only strengthened the argument that it would be in the airports’ interest to publish those data, so that passengers know whose fault the delays are?
Jim Fitzpatrick
I could not agree more. I will discuss previous experience, but, as the hon. Gentleman says, recent experience underscores the expectation that the Government, the authorities or the airports will have to deal with the experience of passenger delays. The horror stories that are starting to come out about passengers experiencing delays of some hours because of shortages of immigration staff and the article in The Daily Telegraph on Monday or Tuesday of this week in which the previous chief executive of UKBA offered some analysis of the problem underscore the fact that there is an important matter to be addressed.
Amendment 9 is the generic proposal. It states:
“A licence must include provisions requiring the holder of a licence to develop passenger welfare plans.”
That is an all-encompassing proposal that we think would cover all the matters that passengers would expect airports and airlines to deal with, including stranded passengers, resilience, delays and all manner of difficulties that passengers might experience. Amendment 10 looks specifically at the position of stranded passengers and suggests that something should be done for them.
Graham Stringer (Blackley and Broughton) (Lab)
As ever and as was the case in Committee, I am following the logic of my hon. Friend’s contribution. Will he expand a little on why it should be the owners of airports who provide provision for stranded passengers and not the airlines, as has previously been established in law?
Jim Fitzpatrick
I am grateful to my hon. Friend for raising that point. Amendment 9 states that it should be incumbent on the licence holder to “develop passenger welfare plans”. That does not necessarily mean that the licence holder has to be totally responsible for delivery. There should be engagement with the airlines and a collective approach to that matter. Obviously, the CAA and the Government should be involved in that. I was not narrowing down the responsibility in the way that I misled my hon. Friend to believe.
Passenger welfare plans were a recommendation of the Select Committee on Transport in its pre-legislative scrutiny of the Bill. In Committee, the Minister did not give a good reason why she does not believe that those plans should be included in the licences for airports. She said that the CAA will draw up the licences and that it will be a matter for that organisation. We do not think that that provision is strong enough. Given that the primary duty of the Bill is to the passenger, as we have discussed for some months, we believe that the development of passenger welfare plans would reinforce the focus on giving passengers the best experience possible at our airports. They have clearly not had that in previous winters.
The Transport Committee also stated in its pre-legislative scrutiny:
“Where possible, airport licences should be structured so that they address key areas of passenger dissatisfaction.”
I do not need to repeat the statistics on the misery that has been experienced by passengers at difficult times over a number of years. The reports, particularly the Begg report, on what happened to passengers at Heathrow during the disruption of December 2010 make alarming reading, even if one looks only at the headlines. Nine and a half thousand people were sleeping in the terminal, passengers were seeking refuge in subways, a lorry carrying blankets for passengers had to turn back on the M25 because of traffic conditions and very few passengers were provided with water or refreshments. It was absolute chaos and confusion. I am not blaming anybody for that. It is matter of record and fact, and we all want to avoid it happening again.
I anticipate that the Minister will refer us to clause 83 on the collection of information and data, which we discussed extensively in Committee. We accept that clause 83 is drawn widely enough to include the proposals in new clause 2 and amendments 8 and 10, because the airports could be responsible for providing the relevant data. However, given the experience of recent years, we believe that amendment 9 should be a basic licence requirement. The fact that the CAA has suggested that such a requirement could be incorporated and has included it in the example for the Heathrow licence suggests that it thinks that it will do that anyway. We think that the Government should make it a duty on the CAA to make passenger welfare plans a licence requirement.
Nigel Mills
Presumably, the hon. Gentleman accepts that clause 83 will apply to all airports and not just to the three that are likely to have a competition licence. Amendment 9 would not be of any use to a load of passengers who do not use Heathrow, Gatwick or Stansted.
Jim Fitzpatrick
I accept that point. I suggested in Committee that there should be a delineation of the differences between licensed airports, given that all airports have a licence of some description. Given that the most difficult passenger experiences of recent years have been at Heathrow, given that an indicative licence has been published for Heathrow and given that Heathrow is the market leader and our only hub airport, whatever Heathrow does will be examined by everybody else. If the CAA says that it expects Heathrow to do something, that might be adopted by other airports. We therefore do not think that it would be inappropriate to include this requirement in the licence, even if it applies only to Heathrow, because it would be copied as best practice by the other first-class airports around the country.
We all want to ensure that there is a good passenger experience, especially for those with disabilities, as was discussed in Committee and as is outlined in new clause 2. We hope that the situation will be better as a result of the Bill and are confident that it will be. We congratulate the Government on bringing it forward. However, we think that it would be much better if, in addition to more and clearer data being published on the passenger experience, there was a simple licence requirement, as outlined in amendment 9. We will seek the view of the House on that if the Minister is not able to reassure us in the course of the debate.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
This group of amendments draws attention to the importance of the passenger experience. The Transport Committee has looked at that theme a number of times over the years. Some improvements have been made, but there are still major questions, some of which are raised by the amendments.
Overriding the specific points made by the amendments is the general question of who speaks for passengers. The previous organisation, the Air Transport Users Council airport consultative committee, stopped being responsible for airing passengers’ views. It was suggested that Passenger Focus might take up that responsibility, but that did not materialise. When the Transport Committee questioned the CAA in our pre-legislative scrutiny, it told us that it was setting up a panel. When we asked what form the panel would take, how its members would be chosen and how it would operate, the answers were unclear. There is still a big question mark over whether there is effective representation for air passengers. Such representation does not seem to be enshrined in the Bill. I would like to hear the Minister’s comments on that.
Graham Stringer
My hon. Friend is making a very good point about who represents passengers. Does she agree that a flaw in the Bill is that it does not state not only who represents passengers but what the interests of passengers are? If that major flaw is not corrected today, I hope it will be corrected in the other place.
Mrs Ellman
I thank my hon. Friend for drawing attention to some important points. I agree that the matter needs further thought, and I hope that the Minister can respond on it.
The Select Committee’s work also drew attention to some problem areas in the allocation of responsibility for looking after passenger experiences. Key passenger concerns, particularly about passport and immigration issues, the time it takes people to get into the country and baggage handling, are not necessarily the responsibility of the airports, but they are, in reality, seen as responsible for them. We have heard examples recently of long queues, which are the responsibility of the UK Border Force, yet happen in the airport and are part of the air passenger’s experience. There do not seem to be any means of addressing that dual responsibility in the Bill, and that needs attention.
My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) referred to the Select Committee’s earlier work on the implications of bad passenger experiences and the need for passenger welfare plans. The problems that air passengers experience at times of disruption during otherwise fairly normal periods are a long-running issue, and there has also been the near-breakdown of the service in situations such as very bad weather. We produced a report drawing attention to the matter and Ministers told us, or certainly implied, that the new licence conditions could contain requirements for passenger welfare plans to be put into practice, so that there would be clear responsibility for looking after passengers and giving them information in times of severe disruption. That does not seem to be happening in the Bill.
I know that the Civil Aviation Authority, in laying down what I think it calls its indicative licence conditions, has said that passenger welfare issues are part of the licensing process. However, it is extremely unclear whether the conditions will be enforceable, how clear they will be and whether there is to be a further consultation period before any such conditions are laid down. That is another area of concern.
All the points that I have made relate to the amendments, and I will be interested to hear the Minister’s response. The experience of passengers travelling by air is extremely important, and it is time that it became a focus of our attention.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I wish to make a few comments, mainly about Edinburgh airport, which is obviously of particular interest to the residents of my constituency and has recently been purchased by a new operator following the earlier competition decisions. It has been taken over by the operator of Gatwick and London City airports among others.
By and large, the passenger experience at Edinburgh airport is good. Most of the time, people can move fairly smoothly through the airport. Nevertheless, the points that my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) made apply at certain times of the day. My constituents frequently enter the UK at Heathrow or other airports in the south and then travel up to Edinburgh, and I know from personal experience about difficulties such as long queues at immigration and at security. Sometimes only one or two search points seem to be open even though eight or nine are available. We all experience that, and if the Bill can make the situation better, I will certainly welcome it.
Such problems are not generally the experience at Edinburgh airport, but two aspects of passenger welfare standards need to be addressed there and elsewhere. The first is the issue of international flights in particular arriving late in the evening, when either the UKBA facility or the airport handling facility is apparently unable to cope with arrivals, particularly if planes are slightly delayed. As a result, I have had many complaints about people having had to wait for long periods before they could get off the plane or get past a locked door into the terminal building. I hope that the Bill will lead to an improved service for passengers, both in general and through the new standards that it will bring into effect.
Pat Glass (North West Durham) (Lab)
I say at the outset that overall, this is a good Bill. It was drafted by the previous Government and taken forward by the current one, and I agree with much that is in it, but I still have some concerns about a number of issues, one of which is passenger welfare. I was a member of the Public Bill Committee and I raised the issue, but I did not receive sufficient assurances from the Minister that the Government were taking it seriously enough in the Bill.
The Minister was unable to satisfy me on three key issues: first, whether airports will be required to take seriously enough the issue of passenger welfare when things go wrong; secondly, how the Government will routinely measure passenger satisfaction; and thirdly, how, having measured passenger satisfaction, they will make systemic changes to improve passengers’ experiences.
The Transport Committee has recommended that the Government structure licences specifically to address key passenger satisfaction issues, including those relating to immigration and baggage handling. We are all familiar with the frustration, anger and stress that can be caused at airports when our luggage is lost or sent to a different airport, or when we are close to missing a flight because of a long queue at security. I was able to relate to the Public Bill Committee an occasion when I was held in a long queue at security. As the flight time got closer and closer, the anxiety that that caused me was made much worse because I was travelling alone. In the current economic situation, many families are having to prioritise what they can afford and consider whether their finances will stretch to an annual holiday. When they have saved hard all year for a well-earned break, they deserve better treatment and a better experience at our airports.
The Government have cut 6,500 staff from the UK Border Agency, with 1,500 going from the UK Border Force, including more than 800 this year alone. We have heard the concerns that have been raised about the relaxation of security checks at our borders to avoid chaos at security. The chaos at the UKBA last summer meant the abandonment of checks on potentially hundreds of thousands of people, and we—least of all the Home Secretary—still do not know who came in through our borders. The relaxation of controls was a direct consequence of the reduction in the number of staff, and although that is primarily the Home Secretary’s responsibility, it has a significant negative impact on the passenger experience. The public rightly expect proper immigration controls to be in place, and passengers expect there to be sufficient staff to prevent massive delays at airports.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
I am, of course, very interested in matters related to the UKBF, but if the Opposition are so concerned about the issue, I am puzzled that they did not table an amendment on it.
Mrs Villiers
If the hon. Lady was so unhappy with the response given in Committee, I am surprised that an amendment has not been tabled for consideration today.
Jim Fitzpatrick
Does my hon. Friend agree that the Opposition took the Minister’s advice that UKBA matters were for the Home Office, which is why we have decided to focus on passenger experience and welfare? As we have said, Mr Deputy Speaker, we would like to press those proposals to a Division if the Minister cannot reassure us. That is why UKBA has not been mentioned, and I am sure it is also why my hon. Friend did not table an amendment on UKBA.
Pat Glass
I said earlier that although UKBA cuts are primarily a matter for the Home Secretary, they have a significant negative impact on the passenger experience.
I agree with the premise in the Bill that the passenger must be put at the heart of the regulatory regime. The Bill is right to give the CAA a primary duty on air transport users. The Bill is not specific enough on how that objective will be met, whereas the new clause and amendments would provide such specificity.
Delays caused by UKBA checks, baggage handling and adverse weather cause huge passenger dissatisfaction and are made that much worse in times of crisis, whether that is caused by adverse weather conditions for which there should have better planning, or by volcanic ash—in the last such crisis, the needs of passengers hit an all-time low.
An Office for National Statistics omnibus survey conducted in February 2010—it came hot on the heels of the crisis caused by adverse weather conditions at Heathrow—revealed that although most passengers are largely satisfied with their experience at airports, they have different views on different aspects, and were not equally satisfied with all aspects of service. The aspects of least satisfaction included information provided on bringing goods into the UK, on which there has been some improvement; information on destinations served by the nearest airport; baggage collection; and the cost of flights.
The CAA discovered in its own survey of passenger satisfaction at airports that waiting at immigration was a concern. Fewer than 70% of passengers at London’s three major airports were satisfied with immigration services, and 8% of surveyed passengers waited more than 20 minutes. That impacts on our international reputation. I agree that the primary duty should be to promote the interests of passengers, but passengers are telling us that that does not always happen; that it happens better in some aspects of the service than in others; and that it can break down completely in times of crisis.
Following the Transport Committee inquiry into the failure of both the Government and the industry adequately to prepare and respond to the severe winter conditions in December 2010, the absolutely appalling experience faced by many passengers, particularly at Heathrow, demonstrated the need for the sector significantly to up its game in relation to passenger welfare. The Bill fails to deliver on that.
“Keeping the UK moving”, the excellent Transport Committee report on the impact on transport of the winter weather in 2010, recommended that airports
“be required to develop passenger welfare plans and to provide”
sufficient
“support to stranded passengers during periods of disruption.”
It is disappointing that the Government do not take the same view. Is the Bill not a perfect opportunity to ensure that airports provide assistance to passengers, even if only for elderly or disabled passengers, or for those travelling with small children, who could be stranded in airports for days at a time?
The UK’s reputation was damaged by scenes of thousands of stranded passengers in airports over Christmas 2010, and equally damaged by the aftermath of the Icelandic volcano eruption. I was contacted by a number of constituents, as I know other hon. Members were, who were trying to get back from airlines the vast amounts of money that they had been forced to spend while stranded. Members of the Bill Committee will remember that I entertained them with my family’s experience. I was trying to help my elderly and disabled parents who were stranded in Barcelona. Their experience was perhaps extreme, but it was by no means unique, and the Government need to ensure that in future, passengers—disabled or not—do not experience such a shocking lack of care.
In the light of such fiascos, the Bill is an opportunity to place obligations on airports to provide help for stranded passengers in similar situations, and to prevent a repeat of the past. The need for early, decisive action on whether to cancel services is particularly important. There has been some improvement in that respect. I was due to fly out of Heathrow a couple of months ago when planes were again stranded by snow. I got a text and then a phone call from the airport telling me that my flight was cancelled, which saved me trailing up to the airport and standing around all day. We should recognise that vast improvement. The value of knowing sooner rather than later whether a flight is cancelled should not be underestimated. It could mean that fewer passengers are forced to endure hours, and possibly days, in an airport. If they know earlier, they can make alternative, more comfortable arrangements.
The problems also included the supply of de-icing and anti-icing products, and road salt. We should ensure better liaison over the treatment of the appropriate public road network between airports and local highways authorities. There has been some improvement on that, too. In 2010, my local authority properly prepared for the winter weather. It bought and arranged delivery of salt, but at the last minute, in an absolute panic, the Government effectively took salt that had been paid for by local authorities and transferred it to parts of the country that had failed to plan. However, we must accept that there has been some improvement on that situation.
During the 2010 crisis, the then Transport Secretary, the right hon. Member for Runnymede and Weybridge (Mr Hammond), promised urgently to legislate to penalise airport owners for bad service, but passengers are still being left without the added protection such reforms should have brought. Airlines and airports are quick enough to take passengers’ money, but much less keen to step up and help in times of crisis. Damage has been done to our international reputation and to the needs of the air-travelling public, whether they are disabled or not, and it is time for the Government to step in and put passengers first.
Jim Shannon (Strangford) (DUP)
I want to make just a couple of comments. I congratulate the Minister and the shadow Minister on how well the Bill Committee was run. All members of the Committee contributed to the Bill and the best way forward.
As an elected representative for Strangford in Northern Ireland, I have been contacted by three airports in Northern Ireland—Belfast City, Belfast International, and Londonderry—because they want to ensure that the regulatory system is efficient. Some perceive inefficiency and say that the regulation is burdensome, and that the system clearly needs reform. In some ways, the Bill Committee tried to ensure that we can provide an efficient, flexible system that works well. If we have done so, it is good news.
New clause 2 refers to an
“annual report on disabled and reduced mobility air transport passenger experiences”.
Many hon. Members have been contacted by constituents —this point was made in Committee—who have particular and specific, but not unique, personal medical and health circumstances. They might have had an operation and now carry a colostomy bag, or they might have had metal inserted into their body to protect their spine or shin. As a result of wars all over the world, many people have lost limbs, and many soldiers and civilians have prosthetic limbs, yet when it comes to improving their experience in airports, we find that the process seems to be inflexible. I have heard complaints on that.
The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) introduced a ten-minute rule Bill on such problems, so the matter has been talked about before. I would like to know how we can improve the experience of airports for those people, who have made it clear to me as an elected representative—I suspect they have made it clear to other hon. Members—that their experience was not the best and asked how we can make it better. I believe that we can. I know that the Minister will assure us on that matter, and I look forward to her comments.
Nigel Mills
I had not planned to speak to the new clause and amendments, but I was tempted by the exchange on border services to relive some of our Committee debates.
I cannot support the shadow Minister’s amendments. I am not convinced that the licence dealing with the economic regulation of airports is the right place to impose conditions that ought to apply to every airport. I would hope that all airports operating in the UK would recognise that all these extremely sensible and worthy things were natural obligations that they ought to fulfil anyway, and that we should not need to legislate for them. If we do, though, we should legislate for them all, not just the one, two or three airports that happen to be economically regulated.
Clause 18, to which the amendments relate, allows—possibly even instructs—the Civil Aviation Authority to include conditions it thinks
“necessary or expedient having regard to the risk that the holder of the licence may engage in conduct that amounts to an abuse of…market power”.
If it was felt that an airport such as Heathrow was giving a particularly poor passenger welfare service because it could away get with it—because it has market power and people have to fly from there on certain routes—it would be perfectly fair for the CAA, recognising that risk, to impose conditions. We would all want the CAA to do that, if it saw those risks to any part of the passenger experience.
I want to touch on the experience of getting through passport control. Having been through four UK airports this week on Northern Ireland Select Committee duties, I was obviously spared having to go through passport control both in Northern Ireland and at Gatwick on Monday evening, so I have no recent miserable experiences to recount. However, this issue is becoming a reputational risk with people arriving in the UK on holiday or business, so we need to get it right. There is no particular magic to getting it right. The airports and the UK Border Force all have a role to play. As was said, it is a matter of getting resourcing to match the volume of passengers and flights, knowing when passengers are coming from jurisdictions that could make border control more complicated, and making available all the facilities that the Border Force needs, such as rooms near the passport checking station and so on. Airports could invest in electronic scanning devices as well. We need to encourage airports and the UKBF to work together pragmatically to make the service the best it can be.
The Minister asked why no amendments were tabled on this for Report stage. I moved one in Committee, of course, and I was tempted to bring it back on Report to get the wider view of the House, but I was not sure that the Whips would welcome my being tempted down that line. Nevertheless, we need to find a way of getting the UKBF to recognise its responsibility and to publish all the data on the length of queues by airport so that passengers and airports can know what the situation is likely to be. When the transparent data are made available, all involved will have the motivation to get those queues as short as possible by making the most effective use of the resources available.
Julie Hilling (Bolton West) (Lab)
It is interesting to follow the hon. Member for Amber Valley (Nigel Mills). He said that he could not support the Opposition’s amendments because airports should be doing these things anyway. If they were, we would not need the amendments, but because they are not, the amendments are important. That is particularly so for UK plc, given that, so often, the first and last impressions that overseas visitors get of the UK is of the airport.
Nigel Mills
For clarification, my point was that all airports should be doing this but that the amendments would apply the measure to only three UK airports.
Julie Hilling
I thank the hon. Gentleman for his clarification. I absolutely agree that all airports should be doing it, but the Bill enables us at least to put the obligation on some; we would then hope that the others would follow. If airports want to attract business from passengers and other businesses, their standards need to be as high as those of the others. It is important, therefore, that we set down what we expect from our airports and airlines.
As we heard, the Transport Select Committee undertook the inquiry “Keeping the UK moving: The impact on transport of the winter weather in December 2010”—a very long title. That in-depth report looked into all elements of transport—not only aviation but the road network and how transport links together—and recommended that passenger welfare should be at the heart of airport operations. It also agreed with the recommendation of the Begg report that Heathrow and other airports should develop welfare plans for passengers during disruption. The report stated:
“Passenger welfare should be at the heart of airport operations. We concur with the recommendation of the Begg report that Heathrow should develop a welfare plan for passengers during periods of disruption: other airports should do the same. It is unacceptable that such plans do not already exist. If airlines fail to meet their obligations to accommodate stranded passengers, airports should be prepared to step into the breach. We would support measures by which airport operators could reclaim the costs of providing support to stranded passengers from airlines which had not discharged their legal responsibilities and we recommend that the CAA investigate how this can be achieved.”
The Government responded:
“However, the legal responsibility to provide care and assistance to passengers remains that of airlines. It is important that any initiatives to bolster the provision of passenger welfare during periods of disruption, for instance through passenger welfare plans, do not create any uncertainty in this area.”
The Committee welcomed the Bill, about which the Government response said:
“The CAA would have a new primary duty that would put the interests of passengers unambiguously at the heart of the regulatory regime.”
It is disappointing, then, that on Report we are still urging the Government to put in the Bill the obligation for airports to develop welfare plans.
Mrs Villiers
I hope that I can reassure the hon. Lady. Our concern is not about the amendments’ content but that we can trust the CAA to put these kinds of issues in the licence system. The best way to ensure effective regulation is to give the regulator the decision on exactly how to focus on passenger welfare. The hon. Lady can be confident that even if the amendments fall today, the CAA will ultimately put exactly this sort of thing in the licences, on which it will consult as soon as the Bill becomes law.
Julie Hilling
I thank the Minister for her intervention, but I have to say that I am not reassured, because if we believe that those things are fundamental, I do not see why we should not put them in the Bill. She reassures us that the regulator will ensure that those things are in place, but let us tell the regulator. Let us say, unambiguously and up front, that we expect those things to happen and that the regulator will ensure that, rather than allowing the regulator to make those decisions for itself.
I want to talk, as others have, about what happened at Heathrow in the winter disruption of 2010. The point is worth reiterating, because the Begg report made alarming reading. Let us look only at the headlines: 9,500 people sleeping in the terminal; passengers seeking refuge in subways; a lorry carrying blankets for passengers having to turn back on the M25 because of the traffic conditions; very few passengers provided with water and refreshments; absolute chaos and confusion. As the Begg report found:
“Confused and contradictory messages caused incorrect signals to go to airlines, to passengers, and from airlines to passengers”.
Passengers were given laptops to try to rebook their flights—the laptops were around the terminal. That is fine for regular travellers and regular internet users—perhaps they could find their way around the system—but many passengers would clearly not have had the first clue about what to do. There seems to have been an absolute lack of care and concern for passengers at that point. Indeed, there was no contingency plan in place to ensure that those with medical conditions, who are more vulnerable—for instance, those with diabetes—had access to food, water and other things they needed. There must be a system in place and a channel of support for those who need medical support at times of disruption.
It is true that we all get those messages on the television or radio: “Do not travel unless your journey is absolutely essential.” Unfortunately, the vast majority of us always believe that our journey is indeed absolutely essential. People set out in their cars or other modes of transport when, if they had stopped to think about it, they would not have done so. Airports face that difficulty in dealing with us—that even when it is snowing or there is thick fog, we believe that our flight is going to take off. Airports have to accommodate themselves to the fact that we are not always sensible. Living in a country that does not often have severe weather, we are perhaps more naive about when we should travel and when we should not. However, we also have to recognise that many of those travelling to airports set out the day before or when it is not apparent that there will be bad weather later. Again, we have to consider not only human nature, but the fact that people will set out before conditions worsen. That is particularly true when we think about volcanoes erupting and other things that can happen unexpectedly.
Going back to the winter problems, particularly at Heathrow—I acknowledge that other airports dealt much better with the weather—it is unacceptable for passengers to have such an experience. It unacceptable not only for them, but for UK plc. Our airports are our gateway to the rest of the world. We need airports with first-world standards, not standards one would expect in a developing country.
There did not seem to be a huge amount of improvement at Heathrow this year. Perhaps I could be criticised for saying that not enough information was given on previous occasions, but when there was a threat of snow, a quarter of the flights were cancelled. The report states that flights should be cancelled and information given in advance if such disruption is feared. Perhaps the Minister has better information than I do and will be able to respond, but four inches of snow were threatened—the threat was of snow being dumped, rather than falling long term, over days or hours. Considering that we are supposed to have had this great investment in snow clearing and other things to keep our airports moving, cancelling a quarter of the flights feels like a knee-jerk reaction.
Yes, airlines are responsible for the treatment of passengers, but it is not good enough for different airports to have separate passenger welfare plans. A passenger needs to know what support they will get at any airport, because it is the airport, not the airline, that will be blamed if there are problems. Whether a passenger has booked with Virgin, British Airways or whoever, they will blame Heathrow, Manchester or Gatwick for their bad experience and lack of support, rather than the airline that should be providing that support. Airports clearly need the power and responsibility to have concerted passenger welfare plans, and the CAA needs the authority to ensure that that happens.
Mrs Villiers
It is a pleasure to see you in the Chair this afternoon, Mr Deputy Speaker. I would like to echo the comments of the shadow Minister for aviation to the effect that our experience in the Chamber today shows something of a contrast. It shows the great strengths of this Parliament—that we can embrace both the aggressive exchanges that we heard earlier and the detailed and considered scrutiny of legislation that we are undertaking now.
I also very much welcome the words of support that the shadow Minister has expressed—both today and throughout the scrutiny of the Bill—for the broad thrust of the framework put before the House. This is a Bill that started its life under the previous Administration, so although it is being put forward by a coalition consisting of Conservatives and Lib Dems, it owes much to our Labour predecessors. That degree of cross-party involvement has strengthened the Bill, as have the extensive consultation done by the previous Government and the further work with stakeholders done by the current Government.
Before I deal with the amendments in detail, I want to make a general point about the passenger experience. I completely agree that a key aim of the Bill is to ensure that we improve the passenger experience at our regulated airports, because it is important both for passengers and for our economic competitiveness, the quality of our airports and making passengers the central priority of our regulated airports. That is essential. Although Opposition Members have expressed concern and called for changes in the Bill to reflect that, I hope they will agree that what is already in the Bill will be a significant overall improvement on the current system, which essentially leaves the CAA with few levers at its disposal in the five-yearly price control process. That process is important, but the Bill enables the regulator to opt for real-time regulation, so that it can intervene when passengers need it, in a flexible and targeted way, to address just the sort of issues that so many hon. Members have raised today. Although we may differ on the precise drafting of the Bill on some issues, I hope that we can uniformly agree that it will be a significant step towards achieving a better experience for passengers at our airports.
Let me deal first with the amendments; I will come to the new clause in a moment. There can be no doubt about the importance of these issues, whether it is baggage handling or the protection and safeguarding of passengers in the event of disruption. I have huge sympathy with all the passengers who were subjected to hassle and inconvenience during the various incidents outlined by hon. Members today. It is clear that the aviation sector as a whole needs effective means to deal with passenger welfare during such incidents. The hon. Member for Blackley and Broughton (Graham Stringer) gave us a timely reminder that this is not just a matter for airports, but that airlines have a number of important and legally binding duties in respect of passenger welfare. However, it is clear that airports have an important role to play as well.
Although I can understand and agree with the sentiment behind much of what has been said today and the general aims of the amendments, I cannot recommend accepting them. The Bill provides a far more effective means of protecting passengers in relation to the matters raised. Clause 18 and the licensing regime will give the CAA the flexibility to tailor licence conditions to the specific circumstances facing individual airports. That flexibility is important as a means of minimising distortions associated with regulatory intervention and ensuring that the action taken by the CAA is proportionate and tailored to individual circumstances. As I said in response to the hon. Member for Bolton West (Julie Hilling), giving the independent expert regulator flexibility and discretion in deciding the content of the licence is a more effective way to protect the interests of both present and future passengers. If Parliament chooses to use the legislation to hard-code certain points into licences, that would constrain the regulator’s freedom to decide what priority should be afforded to different passenger concerns and what costs should be allowed for the delivery of competing consumer priorities.
The amendments would make the licence system unbalanced because there is a wide range of different issues that passengers care about. Moreover, a prescriptive approach in the Bill is likely to make it more difficult for the regulator to adapt its approach to the changing concerns of passengers. If we adopted the amendments we would risk obliging the Civil Aviation Authority to give greater weight to the factors listed in the amendments than to matters that might become equally or, indeed, more important to passengers in future.
I hope that I can provide some reassurance to hon. Members on the matters that they have raised. They can be confident that the CAA would use the new licensing powers proposed under the Bill to address the issues that they have raised in the amendments. As we discussed in Committee, in response to a request for advice from the Secretary of State, the CAA has published an indicative licence to assist Parliament in its scrutiny of the Bill. A copy was sent to the Library and, at the request of the Department for Transport, the draft licence includes provisions on operational resilience which, I agree, are crucial for an airport to be effective.
The proposals in condition 7 would require the licence holder to operate the airport efficiently and to use its best endeavours to minimise any detriment to passengers arising from disruption. It would also require the airport to draw up, consult on and gain the CAA’s approval for an annual resilience plan setting out how it would secure compliance with its obligations under the condition. The licence holder would then be obliged to comply with commitments it made in its resilience plan. I hope that reassures hon. Members, including the hon. Member for Bolton West (Julie Hilling).
Gavin Shuker (Luton South) (Lab/Co-op)
Will the Minister confirm that if the amendments are not accepted, the current insufficient resilience safeguards might be something dealt with in a licence issued by the CAA?
Mrs Villiers
If I understand the hon. Gentleman correctly, yes, it is clear that the Bill provides the CAA with flexibility to include provisions in the licence on baggage handling and passenger welfare. Our rejection of the amendments should not be taken as an indication that matters are not sufficient; it is simply that the Bill already provides the tools for the CAA to deal with those them.
Gavin Shuker
I am extremely grateful to the Minister for giving way again. She it talking about the provisions positively. Is it her view that the CAA should issue licences with provisions on those particular points?
Mrs Villiers
As I believe I said, the previous Secretary of State had already indicated to the CAA that resilience and passenger welfare were issues that should be addressed in the licence.
Nigel Mills
Something that is missing from the indicative licence is a requirement to measure or try to improve people’s experience at border control, although that is understandable, given that it is not within the remit of the CAA to deal with that. Has the Minister had any discussions with the Home Office, given the recent problems at Heathrow and elsewhere, to see whether more data can be published to try to improve that experience?
Mrs Villiers
I am very much aware of my hon. Friend’s interest in the UK Border Force, and I shall come on to those matters. However, on various occasions, I have had discussions with Home Office colleagues on those matters.
Mrs Ellman
On the same topic, how will passport control matters, which are the responsibility of the Home Office, be addressed under the licensing regime?
Mrs Villiers
As I shall come on to explain, I do not believe that the licensing regime is an appropriate mechanism to address issues relating to border controls.
The CAA sought initial views from industry in drafting the indicative licence. However, Parliament has not yet concluded its consideration of the Bill, so the CAA has not yet begun to consult on proposed licence conditions for each airport that will be subject to regulation. Until consultations have taken place no final decisions will be taken about what goes into the licence. However, if the Bill is passed as drafted the CAA will consider the extent to which it is necessary to include conditions on resilience and passenger welfare in the licence. The CAA expects activities that may be part of the new licence regime to include taking into account other obligations on service quality standards, and the success of codes of conduct and voluntary arrangements adopted by the industry. As the body with the relevant operational expertise, the CAA is well placed to determine appropriate and effective licence conditions. The amendments could undermine our goal of giving the specialist regulator a flexible toolkit to protect the passenger, so I hope that the Opposition will not press them to a vote.
Graham Stringer
I am grateful to the Minister for giving way. As ever, she is generous with her time in answering questions. My question is slightly rhetorical. Does she accept it is much more difficult for such airports as Heathrow, which operates at 99% capacity, to be resilient?
Mrs Villiers
Whether in our rail system or at our airports, there is a trade-off between capacity and resilience. If a system is intensively used, it is often more difficult to maintain appropriate reliability, but I pay tribute to the work done at Heathrow in recent years to improve reliability. In my opinion, its record stands up strongly in comparison with that of its European competitors.
On new clause 2, the Government of course agree that it is hugely important that airlines and airports should be sensitive to the needs of disabled people, and that they comply with the regulation that has been introduced to protect the interests of people with disabilities. I agree about the benefits of publishing information on compliance with obligations relating to disabled passengers. However, I do not support the new clause.
My first concern is a practical one, as the provision is so drafted that it would put the obligation to produce an annual report on the Secretary of State and the CAA jointly. I have significant doubts about linking the CAA and the Secretary of State in that way. The aviation regulator and the national enforcement body for European aviation consumer legislation are separate from the Secretary of State in respect of ensuring compliance with EU law, and the amendment could be seen to compromise the CAA’s independence in that role. I am concerned, too, about the impact of the provision, and I believe that there are effective mechanisms already in place to secure the result that it is intended to achieve.
The CAA publishes an annual report and corporate plan, and it makes a considerable amount of consumer information available on its website. An extra annual report on a specific area of legislation, on top of those more wide-ranging reports, seems disproportionate. The CAA is committed to the principles of better regulation, and it aims to be as transparent as possible in all its work, including in relation to compliance and the enforcement of legislation relating to consumers and disabled passengers.
Jim Shannon
Further to that point, and to what I said earlier, I am aware of many people, particularly people with disabilities, who are subject to a strip search every time they go to the airport. Is it necessary to go to that extreme every time someone who clearly has a disability appears at the airport?
Mrs Villiers
The airports have an important obligation to ensure that all security checks are carried out appropriately, but it is enormously important that they do so as sensitively as possible, particularly in relation to the needs of disabled passengers. I have a great deal of sympathy with the point made by the hon. Gentleman.
The CAA continues to develop capacity to help consumers, and is at an advanced stage of setting up a new consumer advisory panel to act as a critical friend of the regulator as it proceeds to put the consumer at the heart of its regulatory effort. I hope that those provisions give the hon. Member for Liverpool, Riverside (Mrs Ellman) the reassurance that she seeks. The new consumer panel, which will replace the Air Transport Users Council, is a step in the right direction. It will provide the CAA with an important insight into how it can best serve the consumer’s interest. It will have internal independence from the CAA, which will enable it to provide an effective challenge. It will have the scope to make public statements and it will publish an annual report.
Jim Fitzpatrick
Those who have been listening to the debate will realise that the Minister and I are not a million miles apart on the new clause and the amendments. Clearly, we have the joint objective of improving and protecting the passenger experience. However, as the hon. Member for Amber Valley (Nigel Mills) said, the UK Border Agency and UK Border Force experience has not improved over the past few months and years. I recognise that that is a Home Office matter and is not covered by the amendments, but we accept that clauses 83 and 84, which cover the CAA’s requirement to procure information and publish the data on the passenger experience, could deal with the matters that we have raised in new clause 2 and in amendments 8 and 10.
My hon. Friend the Member for Blackley and Broughton (Graham Stringer) said in an intervention on the Minister that resilience was absolutely critical at airports such as Heathrow that operate at 99% capacity. The CAA has published the indicative licence—a copy is in the Library of the House—and it incorporates a requirement to address resilience and passenger welfare plans. That completely satisfies us that the CAA understands that it ought to be part of its requirement to monitor those elements, and that requirement should therefore be part of the licence. Given the experience of recent years, we do not believe that our proposal would be over-burdensome in terms of bureaucracy or application. It should therefore be incorporated into the Bill. We will seek leave to withdraw new clause 2, but we are unconvinced that the Minister has given us adequate reassurance on amendment 9, so we shall take the view of the House on that at the appropriate time.
Clause, by leave, withdrawn.
New Clause 3
Risk-based aviation security regime
‘(1) The Secretary of State may direct the operators of airport areas to implement an outcomes-focused, risk-based aviation security regime to govern the exercise of their functions in relation to aviation security.
(2) When making directions under this section, the Secretary of State must by order set out the framework for the introduction of the outcomes-focused, risk-based aviation security regime.
(3) An order under this section must be approved by a resolution of each House of Parliament.’.—(John Woodcock.)
Brought up, and read the First time.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 11, page 49, line 31, clause 80, at end insert—
‘(2A) The CAA may also provide advice and assistance to such persons in connection with security checks performed on users of civil air services who have religious clothing requirements in order that their dignity be maintained without compromising the rigour of those security checks.’.
Amendment 13, page 51, line 10, clause 82, at end insert—
‘(3A) Before making a scheme under this section the Secretary of State must review the impact of such transfers on the security functions of the CAA.’.
Government amendments 17 and 18.
John Woodcock
I am pleased to have the opportunity to raise a number of issues relating to aviation security. This is an immensely important subject, and one on which the Bill before us has something to say, but we believe that additional safeguards are strongly in the public interest. There are questions that my hon. Friend the shadow Secretary of State raised on Second Reading, and that I and other Labour Members raised in Committee, to which we have not yet had satisfactory answers. We believe that this proposal provides an opportunity for increased safeguards and scrutiny, and that is why we seek to amend the Bill today.
The UK has a relatively strong record on aviation security. The current arrangements have evolved to meet the threats that have faced the UK from Lockerbie onwards, through the various plots that have emerged since the 9/11 terrorist attacks. As terrorists have increased the sophistication of their efforts to cause death, destruction and disruption, so the UK aviation security system has, generally, shown an ability to adapt and stay one step ahead.
The Bill proposes a major change in the security regime, shifting responsibility for overseeing security arrangements from the Department for Transport to the Civil Aviation Authority. A number of issues flow from that. The first involves staffing. Although the move has broadly been welcomed by the industry, we raised concerns in Committee regarding the transfer of specialist security staff from the Department for Transport to the CAA. The Minister has not yet fully addressed those concerns, but I hope that she will do so shortly. Under the terms of the Bill, 85 members of staff will be transferred from the Department for Transport to the CAA. There is concern that some will choose not to transfer, and will instead leave public service. That could represent a serious loss of expertise in an area where finding suitable replacements could be difficult. To ensure the security of our airports and planes, we need to retain that experience.
On Second Reading, the shadow Secretary of State asked the Government to consider seconding at least some staff, rather than transferring them. The Transport Committee has also made that recommendation. In Committee, the Minister told us that it was possible that some staff would be seconded. Our amendment 13 would require the Secretary of State to assess the impact of staff transfers before she gave the go-ahead to move responsibilities to the CAA. I hope that the Minister will take this opportunity to inform the House of the Government’s current position on secondments, and to tell us whether they have got beyond the stage of simply hoping that staff will not walk away.
We have also tabled new clause 3, because we again want to give the Government the opportunity, which they passed up in Committee, to subject to parliamentary scrutiny their proposed shift to an outcome-focused, risk-based approach to aviation security. Without our new clause, the move to risk-based security would not be mentioned in the Bill at all. We should be clear about what the reform will entail. Under the Government’s proposed new security regime, rather than directing specific measures that airports must undertake in order to maintain security, Ministers will instead specify a number of key risks that need to be mitigated. It will then be for the airports themselves to undertake their own risk assessment. They will be tasked with analysing their local vulnerabilities, and with designing and implementing appropriate mitigating measures. I know that the Minister will agree that this represents a major change to the UK’s aviation security regime.
Gavin Shuker
My hon. Friend presents a picture of changing security regimes under this Government, but does he accept that there are also changes coming through from Europe, particularly on issues such as liquids? Is not the best way of looking at security and exercising correct parliamentary oversight of it to look at the issues in more detail as the picture becomes clearer after the Bill has been introduced— exactly as the new clause outlines?
John Woodcock
My hon. Friend makes an excellent point, and I intend to touch on Europe shortly.
Carrying out such an approach presents a challenge to the industry. Directions from Europe, with which any UK regime will have to comply, usually mandate a blanket approach. As my hon. Friend says, that may well be changing. Through the new clause, we seek to require parliamentary scrutiny and approval before Ministers are permitted to undertake what would be one of the most significant reforms to aviation security in the past two decades.
In Committee, the Minister suggested that Labour Members have set our face against moving towards a risk-based approach. That is not the case. We simply believe that any such move is serious enough to require parliamentary scrutiny—at the point and in the circumstances where the Government seek to make it.
The Government’s impact assessment predicts significant reductions in regulation and costs. If they were to emerge in practice, they would, of course, be welcome—provided they did not result in security being compromised. There is support for such a reform from airlines and airport operators, and we have listened carefully to their opinions.
Graham Stringer
My hon. Friend accurately relates what the Government’s regulatory impact statement says. Will he acknowledge that, as we debated in Committee, Manchester and other airports strongly dispute those figures and believe that there will be a huge increase in the regulatory burden on airports?
John Woodcock
My hon. Friend raises a good point and accurately reflects some of the concerns that cast doubt on the impact assessment, which I know will have been thoroughly engaged in and scrutinised by Ministers and others across the whole Department, as it is now in Whitehall. There was much debate in Committee over whether the assessment thus far made presents an accurate picture.
On an issue that is literally a matter of life and death, it would be deeply irresponsible to make such a major decision on the grounds of cost and regulatory burden alone. Ministers must make it clear how such a move would enhance Britain’s capacity to keep aviation secure.
In their impact assessment, Ministers have argued that a move to a risk-based regime is consistent with the principles of better regulation. The drive to improve and lessen regulatory burdens, where appropriate, is one that we pioneered in government and continue to support now. However, moving away from the current “direct and inspect” regime for aviation should not automatically follow from that. Requiring specific parliamentary approval for this reform would give Members the opportunity for more detailed probing of some of the claims made by Ministers for this change, and how they would fit with EU directions at the time the change is proposed.
In Committee, we did indeed question the reliability of the predicted costs of the reforms—supposedly £23.7 million over 10 years. Parliament should have the opportunity to consider the reliability of those figures in the light of consultation responses. Furthermore, adopting a risk-based approach will inevitably create variation within security procedures adopted at different airports—again a major step change from the present.
Jim Shannon
One thing brought to my and perhaps others’ attention is the different focus on security at different airports. Security might be frustrating for some, but it is necessary for us all. Does the hon. Gentleman feel that with the legislative changes ahead, the focus on security will be similar across all the airports, which is vital?
John Woodcock
Of course the aim of the Government’s reforms is to have a similar focus on security. It might be carried out in different ways, but it will maintain the same effect—that we keep the country and our passengers secure. The cause of our questioning these measures and of our seeking extra scrutiny of the process is that the Government have not yet been able adequately to make the case that that effect will follow.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
As a regular traveller, like my friend from Northern Ireland, the hon. Member for Strangford (Jim Shannon), I know that the inefficiencies of the service are such that there is a crying need for a universal approach to security. In circumstances where the airport that passengers go through has a different regime in place, should not the regulation be attached to the idea of having uniform security across the whole of the airport system of the United Kingdom?
John Woodcock
My hon. Friend has a lot of experience in this matter. One issue that the Government have not yet set out—and if they do not accept the new clause, they might not be required to do so before the House—is how the changes they seek to implement will not lead to increased fragmentation and a potentially less effective system as well as a more burdensome one for passengers.
Nigel Mills
But would the hon. Gentleman not accept that having every airport doing exactly the same thing all the time might be quite risky and that we might be better off having airports doing things a little differently, using different processes and techniques, which would make it harder for people trying to break the system to know exactly what they will be subjected to?
John Woodcock
As I have said, we have not set our face against the idea of a risk-based approach, but the Government have not yet done enough to set out how it would work in practice or how it would fit in with a potentially conflicting or contradictory approach from Europe. Ministers are not saying that they want to move to this approach now; they say they want the freedom to do so at some point in the future. At this stage, we do not know what the regime emanating from Europe will be. If the Government seek to press ahead with such a move, it is right to debate and scrutinise it at the time it comes into force when we should know what the European regime is likely to be. That is better than its going forward without scrutiny, which has been the position up to now. I hope that the Minister will seek to change what has been her preferred option.
Those who seek to disrupt, maim and kill users of air transport and innocent people on the ground are constantly testing the defences that the country has put up. That is why we need Ministers to explain to this House the basis for their confidence in individual airports’ ability to assess and counteract risks adequately. In moving away from the current one-size-fits-all approach to security, we cannot permit there to develop a soft underbelly of smaller airports, where defences are lowered because they self-assess their risk to be low. Those intent on doing us harm will always look for opportunities. We currently see that on our television screens daily in the testimony from Oslo. We know from bitter experience that Britain is a nation with a heightened risk of terrorist attack. There can be no grounds for complacency, and I know the Minister agrees.
We also need real consideration of the ability of a risk-based system to implement the necessary response to specific and sudden threats, such as the example of the liquid bomb plot in the summer of 2006. The discovery of this credible threat led Ministers to take the decision to ban liquids, and for a while most hand luggage, from flights to and from the UK. There is no suggestion that Ministers would lose the ability to take such steps in an emergency if they considered that to be necessary, but questions do arise about whether the ability of airports to carry out such emergency procedures might be hindered by their abandonment of uniform security provision. If each of more than 60 airports in the UK operates its own security regime, how straightforward will it be to ensure that emergency measures are adopted with uniformity, rigour and speed should circumstances render that appropriate?
Major changes in aviation security policy cannot be undertaken lightly. I know that the Minister will cite the broad support of airlines and airports for the proposed shift, but it would be wrong if this were Parliament’s only opportunity to debate such a major change in the context of an Opposition amendment, and to seek ministerial assurances.
The Minister will, I am sure, agree that cost and the principle of lessening regulation are not in themselves sufficient justifications for a root-and-branch reform of aviation security. The public rightly expect their elected representatives to maintain their security and safety in the skies. Ministers are proposing not a mere technical change, but a major overhaul. New clause 3 would require them to explain their proposals to both Houses, and to secure approval for a change when they wish to make it. I urge Members to support this extra safeguard.
I want to say a little about amendment 11. The subject of ensuring the dignity of passengers with specific religious clothing requirements was touched on in Committee, and I am pleased that we have an opportunity to debate improvements now. I am well aware that the subject has been of particular concern to the Sikh community, and that Members on both sides of the House have pushed for guarantees of better treatment for their constituents. I am particularly grateful for the way in which my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and my right hon. Friend the Member for Warley (Mr Spellar) have pursued the issue in recent months.
Aviation security is always paramount, and we make that clear in the amendment, but we believe that it is possible for a rigorous security regime to exist alongside dignity for passengers with specific religious clothing requirements. The way in which security staff treat the Sikh turban is a particularly good example. In 2010, the European Commission introduced requirements for religious headwear to be subject to manual searches. It has been suggested that, given that the UK is the only EU member state with a substantial Sikh community, Europe failed to understand the specific sensitivities of the turban: that it should not be touched by another person, and that its removal should not be required.
The UK reached an agreement with the Commission enabling airports to opt into a trial allowing the swabbing of turbans for explosive residues, a compromise that was broadly welcomed by the Sikh community. However, a number of UK airports have chosen not to opt into the trial, which has caused significant distress and anger among Sikhs. We want to see a more consistent approach which would ensure that people with specific religious requirements, whatever their faith, are treated with dignity.
Gavin Shuker
My hon. Friend is making some compelling observations about the Sikh community and security, with which I entirely agree. Does he agree with me that—as is demonstrated by, for example, 1970s legislation on motor cycle helmets—political leadership is sometimes required to bring about action on issues that are vital to communities represented in constituencies throughout the House, and that bureaucrats may not always be able to make the necessary judgments?
John Woodcock
As ever, my hon. Friend has made an excellent point, and the amendment presents an opportunity for such leadership to be shown.
Mrs Villiers
Perhaps I can illustrate that by reminding the House that as soon as the problem began to emerge, when the new EU rules were introduced, the former Secretary of State for Transport instructed airports to stop applying the EU rules and revert to the old rules until a trial was developed. He took decisive political leadership then, and we will continue to adopt that approach.
John Woodcock
The Minister is right to point out that action has been taken in this regard. The point that we are making today, with which I hope she will agree, is that some airports are still not applying sensitivity as we would wish them to do. That remains an issue, but we now have an opportunity to do something about it.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am grateful to my hon. Friend for raising an issue which I think is understood by Members on both sides of the House. On Sunday a constituent told me that, at a European airport, her husband had been asked to remove his turban in front of others, which caused great distress to him and his children. What does my hon. Friend think could be done to ensure that people are treated with dignity, not just through processes but through staff training and the increasing of awareness?
John Woodcock
Training is an excellent example. We believe that the amendment would empower and encourage the Civil Aviation Authority to take the necessary action in its regulatory role. Too often we find that airports are lacking in this regard, owing mostly to ignorance.
Gavin Shuker
My hon. Friend is being extremely generous in giving way. Can he confirm that if new clause 3 and amendment 11 and were not passed today, the House would have no further opportunity to express its views about the security regime in relation to particular items of religious headwear?
John Woodcock
I believe so. That is why it is so important for our amendment to be accepted, and for the Minister to provide substantive reassurances.
Mr John Spellar (Warley) (Lab)
As my hon. Friend has pointed out, the UK, for historic reasons, has the largest Sikh community. That confers a particular responsibility on Ministers and officials in the Department for Transport to ensure that these sensitivities are understood in European discussions. Does my hon. Friend think that the passing of the amendment would reinforce their ability to ensure, in such discussions, that other countries with less experience of the issue appreciate its significance?
John Woodcock
My right hon. Friend is absolutely right. Passing the amendment would send a strong signal to our European neighbours that the UK attaches great importance to the issue, and would empower our Ministers and officials to go out to Europe and secure the necessary safeguards.
Our amendment seeks to write into law the role of the CAA in providing airports with advice and assistance on ensuring that dignity is maintained. Any move to a risk-based system reducing the uniformity of security provision between airports would make that all the more important. I hope that the amendment will be supported by Members throughout the House. If our aviation security regime is to command the confidence of all communities in this country, we must do more to ensure that they can be certain of being treated at all times with fairness, dignity and respect. This is a simple amendment, which I believe will help to achieve exactly that.
Karl Turner (Kingston upon Hull East) (Lab)
On a point of order, Mr Deputy Speaker. I have heard today that the Deputy Prime Minister may be planning to visit my constituency. That has caused me to make various inquiries. I began by ringing the Deputy Prime Minister’s departmental office and I was told that if he is visiting Hull East tomorrow, it will not be on ministerial duties. I then received a phone call from Lib Dem HQ, telling me that they were very sorry and that there had been some sort of mistake as the Deputy Prime Minister will, indeed, be in my constituency tomorrow.
Karl Turner
I wonder whether you can advise me on this matter, Mr Deputy Speaker.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Heaton-Harris, you should know much better, as you have many years of experience in Europe in addition to your time as a Member of this House. I am sure the point of order is coming to an end, and when it does I shall give a quick ruling.
Karl Turner
I am always very glad to welcome the Deputy Prime Minister to Hull East. Indeed, if he is visiting in order to campaign, I am sure he will do very well for the Labour party. What is the convention of this House, however?
Mr Deputy Speaker
Let me say that it is a customary courtesy for any Member visiting another Member’s constituency to inform them of that visit. There may have been an oversight in this instance, and I am sure that that is now in the process of being corrected, perhaps via the Deputy Prime Minister’s political office, and that the hon. Gentleman will be contacted sooner rather than later.
Mr Spellar
On a point of order, Mr Deputy Speaker. I have huge regard for your qualities, and the abilities you bring to your office. I was therefore astonished at the recent intervention by the hon. Member for Daventry (Chris Heaton-Harris), seeming to imply that you would not know whether a Member was in order. I hope the hon. Gentleman realises that, and that in future he will treat your office, Mr Deputy Speaker—and, indeed, yourself—with greater respect.
Mrs Ellman
Security was one area on which the Select Committee expressed concerns and raised questions. Some of those concerns are touched upon in some of the amendments. The change in security arrangements—responsibility in part moving from the Department to the CAA—is linked to a change to an outcome-focused, risk-assessment regime, but that basic change of policy has not been fully debated. The Committee did not address the subject in depth; instead, we looked at certain specific issues, which are in the Bill.
The shift in responsibility from the Department to the CAA will result in increased costs to the industry. While industry generally supports the changes in the Bill, it is concerned about costs. It has been stated that the cost will be £5 million a year, but I understand that, in fact, the figure could be a great deal higher.
Another issue is how the division of responsibilities will operate in practice. Under the proposed changes, the Secretary of State is to have responsibility for policy and the CAA is to have responsibility for operational matters, but it is unclear how that division will be made and how that would operate, particularly in emergency situations when swift decisions may be required.
That issue is linked to the concern we expressed about staffing, and the possibility of staff in the Department who have expertise in this area not moving to the CAA and therefore not being available to deploy their expertise where and when it is most needed. We have not received any clear answers on that. We suggested there might be secondments. I understand that the Department is not very supportive of that idea, and does not accept that it may solve the problem. We remain concerned about this possible loss of expertise.
I understand that the CAA will be undertaking its new responsibilities by 2014. That is not a long time in the future. It is important that the issues I have raised are addressed. There is also the question of whether the move to an outcome-focused, risk-assessment approach will, in fact, maintain—or, indeed, increase—vital levels of security.
Graham Stringer
I wish to make one general point and two specific ones. The Minister will know that although I accept the basic thrust of the Bill, I have never accepted the regulatory impact assessment and I believe that, throughout the Bill, extra burdens are being introduced for the aviation sector. I have been surprised and disappointed that she, as a Conservative Minister, has not explored more of the market-based solutions to some of these problems.
As my hon. Friend the Member for Barrow and Furness (John Woodcock) said, any assessment of the security costs is unlikely to be accurate, because many of the security regulations will be made at the European level. Making any such assessment is always going to be difficult, but it is close to impossible in this case. I am not going to repeat the discussion that we had in Committee, but I will say that Manchester airport is very concerned that the very expensive scanners that it has put in place may be outlawed by the new European regulations. That is the background to my position; I am unconvinced by the Government’s figures.
The first of my two specific points relates to security and follows on from what my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said. I am firmly of the school, particularly on security, that thinks, “If it ain’t broke, why try to fix it?” There is no evidence to suggest that TRANSEC is not doing a good job. It is integrated with other security services and, more importantly, for transport matters it is integrated with other transport areas apart from aviation. In short, it is doing a good job, and it seems to me that the real motive—the real driver—for moving security on to airports is primarily cost. That is not a good reason, particularly given that, as my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said, this will not have received the scrutiny that it deserves before the Bill goes through. Why take a risk? Why stand a chance of losing experienced and well-qualified members of TRANSEC, who may not want to move into airports? This proposal is unnecessary and the justification for it is weak.
I come to my second and final point. The Minister will recall that when I asked her in Committee whether other airports in the European Union had the costs of their security paid for by their Governments, she said that she thought they did. She then wrote to me and said something, and I followed it up with a parliamentary question, which she was good enough to answer fairly quickly. Her response showed that either she was not telling me—I do not believe that she would do that; I am sure that if she knew, she would tell me and other Members of the House—or, as I think, the Department did not know which countries and which airports paid for their security and which did not.
So not only are we being driven by cost, with a lack of scrutiny, to change a security system that works, but, as with other parts of the Bill, that is going to put a burden on UK airports that is not shared by some of their continental competitors. We know that the larger airports in this country—this does not apply to the tiny airports—such as Stansted, Heathrow, Gatwick, Manchester, Glasgow and Birmingham, and possibly some others, are competing as hubs for traffic throughout Europe, particularly for incoming traffic. Yet the Minister is unable to tell us, after a long debate in Committee and after a parliamentary question, whether we are being put at a competitive disadvantage, because she does not know which of those airports have their security paid for by their Governments. So I would like her to answer as thoroughly as she can on this matter. I do not believe that the case has been fully made, and I do not believe that the impact on the competitiveness and success of our airports has been judged properly and accurately.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I want to say a few things in support of amendment 11 on security checks. As my hon. Friend the Member for Barrow and Furness (John Woodcock) said, the amendment calls for maintaining the rigour of those security checks while carrying them out in a manner that preserves religious dignity. Obviously, we need strong security at our airports—of that there is no doubt. The terrorism threat is very real—we have had the shoe bomber and we have had the underpants bomber—and the travelling public expect the Government and the airport authorities to do all that they can to ensure their safety. It is therefore not a surprise that security is a high concern in the Bill and a strong concern at a European level.
I and a number of other MPs who have large numbers of Sikh constituents have had many representations about the matter over the past year or so. In particular, we received representations about the way in which new European rules were being implemented, a concern that focused on the question of the physical searching of the turban, or, as Sikhs call it, the dastaar. I believe that the Sikh community, like any other part of the UK, accepts the need for strong security and understands that there is a terrorist threat, but it wants security to be implemented in a way that maintains religious dignity, which is what amendment 11 calls for.
I thank the Minister for listening to the representations from MPs and organisations representing the Sikh community on this issue. As she said in her intervention a few moments ago, the Department for Transport, in response to those concerns when they were at their height, organised a trial using swab and wand technology at our airports. That trial is still in progress. I believe that it was due to finish this summer and I want to ask her a few questions. Following the transfer of responsibility for some of these matters from the Department for Transport to the Civil Aviation Authority, how will MPs make representations on such issues in the future? It is important for us to have direct access to Ministers and officials in the Department for Transport; will we still be able to reflect the views of our constituents in the same way under the Bill?
Will the Minister also tell the House what will happen when the trial involving the swab and wand technology comes to an end? Will there be a formal report or a statement to the House in written or oral form about how that trial has gone? Importantly, do the UK Government intend to report the results to the European Commission, which drafted the new rules in the first place?
My right hon. Friend the Member for Warley (Mr Spellar) said a few moments ago that the United Kingdom had by far the largest Sikh community in the European Union. That is true. It also has the longest experience of having a Sikh community and we have been through these arguments, whether they are about the right of Sikhs to wear their turbans when riding a motorcycle, the right of bus drivers to wear them or the right of serving police officers to wear them. We have been through the arguments time and time again and different UK Governments have proven to be responsive to the concerns, which has enabled us to reach an accommodation. As my Sikh constituents often say to me, if wearing a turban was good enough to fight in the trenches, why is it not good enough to be worn in other walks of life?
The flexibility that the UK has shown through the trial is to be commended. I am not saying that the trial is perfect. As my hon. Friend the Member for Barrow and Furness said, it has not been implemented everywhere. Has the Minister received representations about problems in airports that are not taking part in the trial? Importantly, the fact that the Minister has written to Transport Ministers in other EU member states to outline the British approach has been a good initiative, but problems remain, especially outside the UK. We have had a number of Sikh constituents reporting aggressive and highly distressing searches, particularly at Italian airports, which have shown little regard for religious dignity. Some of us have made representations to the Italian embassy about those.
Julie Hilling
I start by expressing concern about the “user pays” principle. We do not apply that to the police or other safety and security issues and services. I will expand on that in a moment, but first I want to express my concern about the outcome-focused, risk-based approach to security. The terrorist has only got to get through once; we have to be 100% successful at stopping the terrorist. I am still not convinced that a focus on outcomes will achieve the necessary ends. I therefore believe that the Government must be extremely clear about what they are saying about the risk-based focus. I am still not convinced that just specifying the end result will be adequate.
To return to the costs, the Government say that the freedom of airports to devise their own systems could lead to cost savings, and that worries me hugely. Will that mean that, potentially, airports will be looking at how they might cut costs, and therefore will cut corners? I am concerned that some airports might be less rigorous than others. Our biggest concern in the past few years has been around transatlantic services, which of course have high prestige for the terrorist. However, any attack on any airport or airliner—or, in fact, train, ship or anything else—would be significant and would produce that wonderful splash of publicity that terrorists want to see. If we do not prescribe what airports should include in their security services, is there not a risk that we shall not be able to monitor them properly? I am concerned that some of those smaller airports may then become soft targets for terrorists.
Bob Stewart (Beckenham) (Con)
When we are looking at security, we can take no shortcuts whatever. We say, “If it ain’t broke, don’t fix it,” but terrorists spend their time trying to work the system that they are viewing, so that approach does not work in security. We have to try and change the system to throw the terrorist. I think the hon. Lady probably agrees with me on that.
Julie Hilling
I thank the hon. Gentleman for that intervention because I absolutely agree with him. That is why I am very concerned that if cost is a driving force within security, airports may look to see how they can reduce costs rather than, as the hon. Gentleman says, continuing to be innovative. As he so rightly says, it is not enough to shut the stable door after the horse has bolted and say, “They got through there but we can stop them next time.” We have to stop them the first time—an incredibly difficult task.
Nigel Mills
Will the hon. Lady join me in welcoming the full body scanners that have been installed by Manchester airport? The evidence is that not only are they cheaper to run and much preferred by the passenger for being less intrusive—there is no need for the physical pat-down—but they maintain all the security features. That is the kind of security innovation that we would like to see, and it is a crying shame that there is a threat from the European Union that the use of those scanners will not be allowed to continue.
Julie Hilling
Clearly, the hon. Gentleman has already seen my speech. I shall go on to talk about Manchester airport.
We have heard about the profiling of potential offenders. I am concerned that people with brown skins are more likely than others to be pulled over for more rigorous security checks, and I am not yet convinced that that will not occur. We have seen what happened with stop and search on the streets. Will that be replicated in our airports? The percentage of black and minority ethnic people who are stopped and searched by the police is much higher than that for the white population, and the police can argue, as can any security service, that certain people are more likely to be involved in street crime and gang-related violence, but the result is the capturing of everybody of a certain colour or ethnicity, which can become very worrying.
My hon. Friend the Member for Feltham and Heston (Seema Malhotra), who is no longer in her place, spoke about the Sikh gentleman who was asked to remove his turban. We must ensure that people will not be targeted because of the way they look or because they come from a certain background. We need to ensure that people are treated the same and that people who meet certain criteria are the ones who are picked out.
Gavin Shuker
My hon. Friend mentioned the statistics associated with police stop and search. I am unclear about the current statistics in relation to people subjected to personal or invasive searches in airports. Does that not support the case for a full assessment of aviation security to be carried out by the House through a further instrument?
Julie Hilling
I thank my hon. Friend for that intervention and I agree with him.
We were told in the Select Committee and in the Public Bill Committee that risk-based security was based on an analysis of people’s behaviour—how they purchase tickets, what insurance policies they have, and so on—but a certain group of people are still more likely to commit an offence. I hope the Minister can reassure me and colleagues that the proposals will ensure that people are caught and are not able to commit atrocities in our skies.
Aside from the race element, there has been an increasing number of complaints from disabled people about how they have been treated at airports, especially from people with colostomy bags or other physical attributes, who have been subjected to pat-down searches. Again, we must consider how to ensure that disabled people are not discriminated against and that they are treated with no less concern for their dignity than other people, even if that means that they may have to go through another door for certain other investigations. Those investigations must not be intrusive or discriminatory or interfere with people’s dignity.
As we heard, at Manchester a scheme has been in place since 2009. Body scanners have been trialled that use backscatter X-ray technology which does not yet have EU approval. I am informed that the radiation from the body scanner is equivalent to cruising for two minutes at altitude and that the scanners have been approved by the Health Protection Agency. However, when the trial ends in October, unless there is an extension, the airport will not be able to continue using them.
The passenger approval rate is 95%. People much prefer it to the old-fashioned pat-down search, as do security staff, because it avoids the need to touch and the bending and stretching that they would otherwise have to do. Not everybody goes through the body scanner. Everybody goes through the first security phase, then a door opens and they either go through the body scanner or go straight ahead. The system has worked, but the concern is that if the EU does not approve it, the investment will have been wasted. More worryingly, what incentive will airports have to be innovative in future? As the hon. Member for Beckenham (Bob Stewart) suggested, we must continue to ensure that terrorists do not find any loopholes in our security system.
On the outcome-focused, risk-based approach, the Minister seems to be saying that the Bill gives airports the chance to innovate and look at other ways of reaching the same solution. That approach is not working for Manchester because it will not be able to continue using the scanners unless the Government can agree with the EU that the system should continue. Will airports be less likely to invest their own money? Even if the Government’s desired outcomes are achieved, a different input method would be used. My worry is that there is not a clear enough picture for how we achieve the outcome-focused, risk-based approach.
Of course, this is a worldwide issue. We need to ensure that passengers returning to and departing from the UK have stringent security checks. Whether across the European Union or globally, we need systems in place that we can all live and work with. I hope that the Minister will return to the issue. As I have said, I am not convinced that an outcome-focused, risk-based approach will allow innovation and ensure that our airports all have the same level of security.
Finally, I want to talk about the staff transfer issue. As hon. Friends have said, the trade unions, the Transport Committee and the Public Bill Committee have all expressed concerns about losing expertise through the transfer of staff from the Department to the CAA and fear that current employees will look for other opportunities in the civil service. The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), wrote to me on that point and stated that the Department could look at how secondments might be used but was committed to ensuring that the costs of regulation are transferred to users and away from taxpayers.
The Minister also said that seconding Department staff to the CAA, rather than transferring them with a function, is unlikely to help ensure that experienced staff remain with the CAA when secondments end. I feel that the Minister has missed the point. Many civil servants are seconded to outside agencies and the cost is transferred to those agencies. While the function that the civil servant fulfilled is transferred, they would stay with the agency within their role. It is not the case that they would be transferred for a fixed period of time and then come back; they are transferred with that function. That means that the individual would retain their terms and conditions and, most importantly, their pension rights. We know that that is of great concern to the employees and that that is why we are most likely to lose that expertise, because they say that they do not want to lose those things and so want to stay within the civil service to look for other opportunities. I hope that the Minister will rethink the decision and not risk the flight of staff and the loss of expertise and, with it, the resilience in our security system.
Mr Spellar
As a former Transport Minister, I particularly welcome amendment 11. It will also be very much welcomed by the Sikh community, especially, and fortuitously, at this time of the Sikh festival of Vaisakhi, which Members of Parliament from both sides of the House celebrated with the community last night here in the Palace of Westminster. As colleagues have said, the Sikh community has historically served this country very well and is now an enormously important and dynamic part of our community, both in business and in many of the professions.
The Sikh community have expressed their concerns, particularly about the handling of the turban at airports, but throughout these discussions—I was involved as a Minister in previous iterations—they have always made it clear that they fully accept the need for security and, therefore, ask, “How do we achieve that?” within the sensitivities of their religion.
Pat Glass
I wish to speak in particular to new clause 3.
We have heard that the Bill will move the responsibility for security functions from the Department for Transport to the Civil Aviation Authority, and new clause 3 in particular is concerned with another change in aviation security: the move from the current direct-and-inspect regime to an outcomes-focused, risk-based one.
My hon. Friend the Member for Barrow and Furness (John Woodcock) has already told us that Labour does not oppose the principle of a risk-based approach—an approach to reforming regulation that the party promoted in government and continues to support—but the life and death nature of aviation security means that such a significant shift must be subject to proper scrutiny to ensure that the necessary safeguards are in place. Although reductions in cost and in regulatory burdens are of course welcome, in aviation security, as perhaps in no other area, such decisions cannot be based solely on cost and on slimming down regulatory systems.
The Minister could and should have taken the opportunities presented by the Bill, which includes a major shift in security procedures, to guarantee parliamentary scrutiny of the move to a risk-based system. Under new clause 3, a resolution to permit the move would require the approval of both Houses of Parliament and give us the opportunity to consider several important issues. It would allow us here in Parliament to consider the reliability of the Government’s estimated cost of changing the regime, which stands at £23.7 million over 10 years.
As my hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is no longer in his place, pointed out, there are already concerns about whether the figure of £23.7 million over three years will allow for sufficient levels of training and staffing to fulfil security arrangements.
The new clause would give Parliament the opportunity to consider whether there is a risk that removing a one-size-fits-all approach to security creates the possibility of different levels of security at different airports, and the possibility at smaller airports of more lax security arrangements, which—ostensibly, given their lower threat level—terrorists could exploit.
The new clause would give Parliament the opportunity to consider whether there is a risk that the removal of the one-size-fits-all approach to security will create different levels of security at different airports, with more lax security arrangements at smaller airports, which ostensibly have a lower threat level, that could be exploited by terrorists. It would give Parliament the opportunity to consider how well the new aviation security regime will cope with emergency situations such as the liquid bomb plot of 2006. It would give Parliament the opportunity to consider whether the Civil Aviation Authority has demonstrated that it has the ability and resources to regulate a risk-based system effectively following the transfer of security functions under the Bill.
I repeat that Opposition Members are not against the move to an outcomes-focused regime in principle. However, this is a major shift in an area of high risk and it needs to be scrutinised properly by Parliament to give confidence not only to this House, but, more important, to the airline travelling public.
Gavin Shuker
It is a pleasure to speak to this group of amendments, because it is probably the most important one that we will discuss, other than that on environmental protections, which we will come to later.
To put the proposals in context, we are discussing a big shift in aviation security. This is not a peripheral part of the Bill, but a cornerstone. In Committee, we had robust debates about how best to arrange aviation security. I want to put it on the record that I do not believe that the Government wish to weaken aviation security. However, their ideological position is that it is important for the Government to withdraw, where possible, and to pass responsibility to other groups, whether they be agencies, third sector organisations or quangos.
Bob Stewart
I apologise for intervening for a second time and thank the hon. Gentleman. The key thing is that, whatever the Government do and whoever is responsible for the security at our airports, security is at least as good as it is now. It might be better or even different. Difference is a good thing in security, as long as the people are well-trained and have decent equipment.
Gavin Shuker
The hon. Gentleman goes to the heart of the issue. I agree with him completely that the regime that comes in must be as good as, if not better than, the one it replaces. That is why amendment 13 would require the Secretary of State to carry out a full assessment of the change. I hope that there will be support for that if it is pressed later.
The hon. Gentleman’s second point was that change is important. Change is essential in aviation security and in all aspects of security so that we do not get into the pattern of doing the same thing day after day and thereby miss the threats. This country has an advanced aviation security regime. There is good partnership between airports, the Department for Transport and the agency within the DFT to ensure that it is implemented. When I sat on the Transport Committee, I was pleased to accompany its Chair, who spoke earlier in this debate, to speak to the officials who are charged with our aviation security in the run-up to the passage of the legislation. It is clear that we have major expertise in this, which we can share across Europe.
The key issue is not whether the Bill will strengthen or weaken our aviation security, nor what operational procedures or equipment we should use, but the question raised by the hon. Member for Beckenham (Bob Stewart): will the regime be better? At this stage, I do not have the information that is needed to answer that question. More important, I fear that the House has not had an opportunity to explore and answer that question fully. The new clause seeks to bring about such an opportunity, which is extremely welcome.
When we consider what the role of the Government should be, we see that the public expect there to be a hierarchy of interventions. There are places where they do not want government at all, and there are places where it is very much required. Security and the protection of the people are at the top of that hierarchy. Although the change being made in the Bill is not in any way designed to push the matter off the Secretary of State’s desk, it is a change to a system that has by and large worked very well.
The change is very big, however, and as I said in an intervention, it comes in the context of changes that are happening around Europe. I visited Brussels two weeks ago to talk about a number of subjects, and the extent to which the UK has become a tarnished brand was clear. Ever since the Conservative party moved to a more right-wing grouping within Europe, and more recently because of the veto that the Prime Minister exercised—although many of us would question what it actually stopped—our Government’s ability to influence other national Governments’ policies on various matters that we should agree on as a bloc has been diminished.
Mrs Villiers
I think the hon. Gentleman would be interested to know that the last time I attended the Council of Ministers, the Danish presidency proactively raised the issue of security reform, drawing on a number of the principles that we were considering in the UK. There is already interest in Europe in what we are doing, and we as a country can take a leading role in the debate on how to deliver a much more effective and passenger-friendly security regime.
Gavin Shuker
I absolutely agree that we have great expertise to share across Europe, and I am pleased to hear that the Minister has been making that point in Brussels. If she were being charitable, though, I think she would accept that the atmosphere there has changed.
Gavin Shuker
No, she is not going to be charitable. Okay.
The Minister rightly gave the example of the ministerial team at the Department for Transport having acted in response to concerns about European guidance on security related to the Sikh community. The current system allowed her to take that action, but we are about to change that system.
Mrs Villiers
I can reassure the hon. Gentleman that the move to an outcomes-focused, risk-based system will not change the responsibilities in relation to directions such as that given by the former Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond). Under the new system, the Secretary of State will still have the power to make directions such as he did in relation to the problem of religious headgear.
Gavin Shuker
I am extremely grateful to the Minister for giving me that assurance, but I would like her to give it to the House in a full debate about aviation security. By 7 o’clock tonight, the House will have finished Report stage. My party’s Front Benchers made their arguments so forcefully that I am sure they will carry the day if the amendments are pressed, but if not, we will have to go on assurances from the Government, not on assessments such as those we call for in the amendments or on positive resolutions of both Houses such as could be made if new clause 3 were accepted.
I accept the Minister’s point about leadership and am pleased that she is being responsive on the matter, but we must not ignore the fact that a big change is being made to aviation security. The public will want us to be able to account for what we have done. The change should not be made lightly; it should be made with the full, cross-party support of the House.
John McDonnell (Hayes and Harlington) (Lab)
I apologise for coming into the debate somewhat late. I was at a ministerial meeting about issues to do with Heathrow, particularly deportation and the detention centres at Harmondsworth and Colnbrook.
I wish to make two simple points. The first is about new clause 3 and relates to an issue that has come up time and again in debates about airport security. Members may recall that I chaired the meetings at Heathrow after 9/11, at which we brought together all the companies, BAA, Ministers and others. Two things came out of those discussions. One was the need for training, which has been mentioned today. There was a lack of training at the time, particularly on lower-level perimeter security. The second was the difficulty of recruiting and attracting sufficiently qualified staff, largely as a result of the low pay levels. We sought to resolve that in discussions with the Government. We wanted not only to bring all the agencies together to improve training, but to have it recognised that pay levels for security workers at Heathrow, some of whom at best lived on just above the minimum wage at that time, needed to be addressed if we were to recruit and retain appropriate staff.
Mrs Villiers
Government amendments 17 and 18 have not had much attention so far, which is probably a good thing for Government amendments. They are minor and technical, and provide for a change to section 12(3) of the Aviation Security Act 1982 by substituting the words “that Authority” with “the CAA”, thereby removing any doubt that the CAA is the authority referred to.
Amendment 11 to clause 80 deals with religious headwear. Committee members will recall that I raised this matter to illustrate some of the points we were discussing. I am sure the House will agree on the importance of ensuring that passengers are treated with respect at all points during their journey through an airport and that our system of security checks is operated in a culturally sensitive way. I welcome the work of colleagues such as my hon. Friend the Member for Wolverhampton South West (Paul Uppal) and the right hon. Member for Wolverhampton South East (Mr McFadden) on this important issue.
Each passenger departing from a UK airport undergoes a standard security process, irrespective of their age, gender or ethnic background. The problems highlighted today relating to religious headwear emerged in April 2010, when new EU regulations came in that required a physical hand search to be carried out in relation to turbans. As hon. Members, including the hon. Member for Feltham and Heston (Seema Malhotra) and the right hon. Member for Wolverhampton South East, have mentioned, physical contact with the turban causes considerable distress and offence to Sikhs. That was a concern not only for passengers but for many members of staff, as Heathrow is lucky enough to draw many members of staff from the Sikh community.
The former Secretary of State for Transport, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), acted swiftly and instructed airports to suspend temporarily the application of the new EU rules. As I mentioned in response to the hon. Member for Luton South (Gavin Shuker), the ability to take such a decision will remain in place under the new approach, because the Secretary of State will retain responsibility for policy and directions.
Airports were instructed to revert to the old systems while consideration was given to how to resolve the concerns expressed by the Sikh community. After intensive work over a short period, a trial was put together with the assistance of members of the Sikh community and is now under way at almost all the UK’s major airports. It uses a combination of explosive trace detection and hand-held metal detectors as an alternative to a hand search of the turban. This technology is successfully deployed in the United States as part of their aviation security regime. The trial is going well and is being carefully evaluated, and we are keeping the European Commission up to date with the results.
I have also written to European aviation and security Ministers to highlight the importance of the issue and to draw their attention to the trial, conscious of the sort of points made today about the UK’s responsibility as a country with a significant Sikh community. We very much hope that the trial will provide a sound basis of evidence for the EU in deciding whether it is possible to change the European rules on security to meet the concerns of Sikhs and ensure that the rules operate in a culturally sensitive way. The trial runs for 18 months up until this summer, and we are currently engaging with the EU with a view to continuing to conduct searches in this way.
Mr McFadden
I am grateful to the Minister for updating the House on the progress of the trial. Has she received any indication from the European Commission about its willingness to adopt this approach more widely, if the UK Government conclude that it does not compromise airport security?
Mrs Villiers
As I recall, it featured in my discussions with Siim Kallas last time I was at the Council of Ministers. We get the impression that the Commission is interested and has an open mind, and, in respect of the immediate prospects, we will consider whether we need to start a further trial when the current one expires in July. We are considering various ways of solving the problem, because it is important that we find a solution that works for the community.
Mr Spellar
Given that the trial must have been running for about 12 months, will the Minister tell us whether it has been a success? Most of the evidence will have come in the first month.
Mrs Villiers
As I have said, we believe that the trial has been positive so far, but it would not be appropriate for me to pre-judge the results before they have been properly assessed.
By way of further reassurance on this issue, clause 80 secures the same outcome as amendment 11, by inserting a new section 21I into the Aviation Security Act 1982, which will require the CAA to provide aviation security advice to airports, airlines and other groups. That would, if the CAA considers it to be appropriate, include advice on security checks on passengers wearing religious clothing. Therefore, although amendment 11 has provided a valuable opportunity for the House to discuss the matter, the Bill already provides for the outcome that it seeks. The Government will continue to engage with both the Commission and other member states with a view to finding a long-term solution to this important issue.
Let me turn to an outcomes-focused risk-based security regime. I welcome the words of support in principle for that direction of travel which we heard from the hon. Member for Barrow and Furness (John Woodcock). We have put together a joint Department for Transport-CAA team with the relevant skills and knowledge to develop, trial and implement the new regulatory regime. We have consulted stakeholders and hosted several interactive events with industry to explain our position. A range of trials will be carried out applying the new regulatory approach. We are conscious of the importance of retaining staff, if we can, when the posts are transferred from the Department for Transport to the CAA. We are working to ensure that we retain those staff when the posts are transferred.
The hon. Gentleman has made points about secondments in the past. We do not see a major difference being made to the retention of staff when a secondment ends, although we certainly do not rule that out as part of our strategy for retaining expertise. To respond to the points that the shadow Minister made, we agree that we are talking about a significant change to aviation security. To respond to the hon. Member for Blackley and Broughton (Graham Stringer), we believe that this move could reduce costs for industry, but that is certainly not the driving factor. The paramount priority must be to ensure that aviation security remains robust at all times. I believe that moving to a more outcomes-focused and risk-based approach could well enable us to deliver higher standards than apply currently, as we will be giving the airport industry more opportunity to develop innovative ways to deliver security outcomes and apply principles of continuous improvement. We are absolutely certain that we must in no way allow the security standards applied currently to slip. We are confident that that will not happen with an OFRB approach, and we believe that the reforms we are proposing could make passengers in the air even more secure than they are today.
Bob Stewart
Training is crucial, and we have to ensure that it is as good as it possibly can be. Speaking as someone who has been involved in such security matters, I can tell my right hon. Friend that the real problem is that people lose focus if they do the job for a long time. Training can help with that. We must ensure that our training is good and that it includes keeping a focus on the job when it can sometimes become repetitive and boring.
Mrs Villiers
My hon. Friend makes a good point with which I completely agree. He also made an important point earlier, which is that some variation in the way security is delivered in different airports can assist in maintaining the highest standards of security, because it injects a further element of unpredictability, which can help us frustrate the evil intentions of those who would do us harm.
In addition, we also see an advantage to the aviation industry of moving to a system that it can run more efficiently and, we hope, in a more passenger-friendly way. When we respond to the consultation on such security, we intend to provide as much detail as possible about how the new approach will work. I cannot support the proposal in new clause 3 for the Secretary of State to be obliged to require the approval of each House before such measures could come into force. I fear that that would slow down reform and could jeopardise our ability to respond swiftly to security threats. The Secretary of State intends to take forward the reformed approach to aviation security under powers in part II of the Aviation Security Act 1982.
Part II gives the Secretary of State the power to give directions to industry for the purpose of protecting civil aviation against acts of violence. The Secretary of State's decision-making powers do not require the approval of Parliament before they can come into force. Changing that as proposed by the new clause could damage our ability to keep passengers secure. Directions from the Secretary of State often contain security-sensitive information which, if widely disclosed, could be used by people who mean to do us harm. Obtaining the approval of the House via secondary legislation inevitably takes time, even with the most efficient business managers in charge of Parliament’s agenda. Aviation directions sometimes have to be made quickly to respond to new threats—in some cases, within a matter of hours or days. For example, swift action had to be taken in response to the liquid bomb plot. If it had been necessary to recall Parliament so that the matters could be debated by both Houses it would have been impossible to respond effectively.
The House will also recall the printer bomb plot in October 2010, when it was necessary to place emergency restrictions on air cargo very swiftly. If the Secretary of State had not been able quickly to ban certain consignments, it could have left us exposed to similar attacks. I am sure that the Opposition would not want that, so I hope that they will consider withdrawing the new clause.
John Woodcock
In our mind, there is no question at all that emergency provisions such as those introduced after the liquid bomb plot would be subject to parliamentary scrutiny, so I do not understand why the Minister is suggesting otherwise.
Mrs Villiers
I am afraid that that is how I interpret the new clause. There would be a serious risk that it would have that result, although I am pleased that the hon. Gentleman has assured the House that that is not the intended outcome. He will appreciate that that would be damaging to our efforts to keep people safe.
Gavin Shuker
The new clause states:
“An order under this section must be approved by a resolution of each House of Parliament. ”
There is nothing in the measure, as far as I can see, that would prevent the existing powers of the Secretary of State “to direct” from being taken away. It is more about the transition from one regime to another.
Mrs Villiers
That may be the Opposition’s intention, but I am advised that the effect could prevent the Secretary of State from taking swift action on the sort of plots that I have outlined.
Turning to amendment 13, clause 82(3) requires the Secretary of State to consult the CAA before making a transfer scheme. Such a scheme would allow, for example, the transfer of relevant staff. I can assure the House that the Department has begun to work with the CAA on understanding how the transfer of staff and property to the regulator might impact on the delivery of the CAA’s functions, whether it is safety, economic regulation or new security functions. The Government’s priority is to ensure that our aviation security remains robust before, during and after the transfer to the CAA. We have begun work to assess the impact of the transfers, for example, to ensure that the CAA has access to the right information and knowledge on aviation security, and we are looking too at how best to integrate aviation security in the CAA, including synergies between safety and security. The CAA is considering how best to manage security at board level, as well as how it can be most effectively managed at operational level. We remain committed to ensuring that the CAA continues to conduct its regulatory functions to a high standard and that it fulfils its aviation security functions to an equally high standard. I therefore urge my colleagues to oppose the amendments and new clause, because I do not think that they are necessary to deliver the outcomes that they are intended to secure.
John Woodcock
I will seek the leave of the House to withdraw the new clause, but I hope that the Minister will continue to look at the staffing issue raised by amendment 13, given our concerns about the potential for problems further down the track. The Minister has given clear reassurances on religious clothing and headwear, and I hope that the strength of feeling expressed in today’s debate will strengthen her hand in achieving the necessary requirements.
On the issue of the parliamentary scrutiny of risk-based security, I continue to fail to see how our amendment could hold things up in an emergency, as the Minister suggests. We will withdraw the new clause, however. I simply urge the Government to continue to take the issue incredibly seriously, and to consider ways in which the House could properly scrutinise the issue, as and when she decides that a move would be appropriate and would enhance security. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 4
Accounts and audits
‘(1) Section 15 of the Civil Aviation Act 1982 (Accounts and audit) is amended as follows—
(a) In subsection (1), leave out paragraph (c) and insert—
“(c) to send copies of the statement of accounts to the Secretary of State and the Comptroller and Auditor General before the end of the November following the accounting year to which the statement relates.”.
(b) In subsection (2), leave out paragraph (a) and insert—
“(a) The National Audit Office shall examine, certify and report on each statement of accounts received under subsection (1) and shall lay copies of the statement of accounts and its report thereon before each House of Parliament.”.
(2) In the National Audit Act 1983, Schedule 4 (Nationalised Industries and Other Public Authorities) Part 1, leave out “Civil Aviation Authority”.’.—(Jim Fitzpatrick.)
Brought up, and read the First time.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
New clause 5—CAA general financial duties
‘In section 8 of the Civil Aviation Act 1982 (General financial duties) after subsection (4) insert—
“(5) It shall be the duty of the CAA to conduct its affairs in such a manner as to fulfil a general duty of efficiency in the use of its financial resources.”.’.
Amendment 2, page 2, line 11, clause 1, after ‘economy’, insert ‘, effectiveness’.
Amendment 1, page 3, line 8, clause 2, after ‘economy’, insert ‘, effectiveness’.
Government amendments 14, 15 and 19.
Jim Fitzpatrick
I do not expect to detain the House for very long on the new clauses, as they are primarily probing, but we are interested in Government amendment 19, which deals with clause 77. The apostrophe and full stop in the amendment look very curious indeed, and we look forward to receiving an explanation of their significance.
In Committee, the Minister teased us about our change of position on the Pilling report and on our support for National Audit Office oversight of the CAA. We said, in justification, that the world had moved on, and that evidence was coming forward, particularly from the British Air Transport Association at that time, in respect of the Government’s explanation of the CAA’s audit arrangements. BATA stated that it in fact involved a normal company audit to ensure that there was no fraud, whereas we were proposing an NAO audit examination of efficiency and value for money.
Only this week, Members will have seen the correspondence from Virgin Atlantic citing the example of the Financial Services Authority. The CAA will be run along similar lines to the FSA. Although the NAO is tasked with keeping track of taxpayers’ money, it has oversight of the FSA, which receives no income from the taxpayer. The CAA will be in the same position. There are clear parallels between the two organisations, so why will the NAO not have oversight of the CAA as well? Other industry-funded regulators are subject to NAO oversight, including Ofgem, which is funded by the energy companies, Ofwat, which is funded by the water companies, and Ofcom, which is funded by broadcasters, the media and communications providers. We are trying to address that anomaly in new clause 4.
Moving on to new clause 5, the Minister stated in Committee that she had written to the leadership of the CAA to say that she expected it to
“lead the Authority in such a way that it: is run efficiently and effectively, thereby minimising the cost on the aviation sector, and providing value for money”.––[Official Report, Civil Aviation Public Bill Committee, 13 March 2012; c. 344.]
We received evidence at the time, however, from British Airways, which stated that
“the CAA has scope to make significant improvements in efficiency”.––[Official Report, Civil Aviation Public Bill Committee, 13 March 2012; c. 342.]
That statement was referring to the CAA before it got its new powers and responsibilities, which placed even greater pressure on it. My hon. Friends the Members for Liverpool, Riverside (Mrs Ellman) and for Blackley and Broughton (Graham Stringer) raised this matter in Committee several times, and they might well try to catch your eye again today, Madam Deputy Speaker, in order to reinforce the point.
In Committee, the Minister pointed out the technical flaws in our original amendment, so we have tidied it up. We have taken her advice and ensured that the new clauses are more appropriately worded. She also said that she would reflect on the matters that we had raised in Committee, and we would be grateful if she would share her conclusions with the House today.
Chris Heaton-Harris
Before I start, may I say in passing how much I admire the rulings of the Chairman of Ways and Means? He is a great gentleman and I apologise for having been told off by him earlier.
The Minister will know that in Committee I raised one point about regulation. As she will recall, I raised the concerns of a very big business and a large industry in my constituency—DHL and the industry trade body, the Association of International Courier & Express Services—about the information provisions. I thanked the Minister then and I thank her now for the positive comments she made about the express services sector. As she acknowledged, DHL is a very significant employer in my constituency, and obviously a key player in the wider UK exports market.
As the Minister knows, the express sector as a whole is broadly supportive of the Bill and wants to work with the Government and the Civil Aviation Authority to ensure that the security aspects are implemented effectively and in consultation with all stakeholders. However, AICES members are concerned that express services have been incorporated into the information on services provisions, which they feel are not appropriate to the sector.
First, express services operate in a different and a very competitive marketplace, and failure to provide the necessary information to their customers would simply result in those customers moving their account. It is a very fluid market indeed. As the Minister acknowledged in Committee, this is mainly a business-to-business sector rather than a business-to-consumer sector, which makes it very different from passenger traffic on airlines. In consequence, the level of regulation required is also very different. I know that the Minister has acknowledged this key difference in the sectors being regulated—between air passenger traffic and express—and it would be helpful to know whether she believes that the CAA shares her views.
Secondly, as I said in Committee, Ofcom already has the relevant powers on the provision of information on express services under the enabling provisions of the Postal Services Act 2011. I was concerned about a possible duplication here. The enabling provisions under section 51 of the 2011 Act could further extend to cover under subsection (3)(d)
“the information that is to be made available by postal operators to users of their services about service standards and about the rights of those users”,
and under subsection (3)(e)
“anything else appearing to OFCOM to be necessary to secure effective protection for those users.”
That is effectively duplicated in information terms in the Bill. Under this particular section, express services constitute postal operators.
Ofcom has judged that there has been no market failure in the provision of information and that the powers in the Act are not required to be used at present. They are still there, however, so conferring the CAA with the same powers will lead to regulatory duplication. Existing legislation already provides for the required “future-proofing” that we talked about so much in Committee.
Finally, but crucially, the express sector is different from air passenger traffic because the mode of transport is not relevant to the consumer. The key factor is the time required to get a package from A to B. How it gets there is completely irrelevant. Most of the time it will be done by air in this particular sector, but sometimes it will be done by truck—and sometimes, perhaps, on public transport. Obviously, the same cannot be said for air passengers unless they are unfortunate enough to land on the wrong runway at Heathrow and want to get to terminal 4. That fact means that the consumer would expect Ofcom, not the CAA, to be the relevant regulator. Making the CAA the regulator for the provision of information services in the express sector would be confusing, and unlikely to bring any benefits to consumers.
I hope that the Minister will comment, will look again at the issue, and will perhaps even consider meeting me, along with representatives of the Association of International Courier & Express Services, to discuss the association’s legitimate concerns.
Graham Stringer
Amendments 2 and 1—that is the order in which they appear on the selection list—may be considered to be either relatively minor or the most important amendments to the Bill, depending on how they are interpreted.
This is the “minor” aspect. I asked in Committee why the word “effectiveness” was not included in clause 1(3)(c) and clause 2(4)(c), along with the words “economy” and “efficiency”. The Minister’s responses are always very courteous and comprehensive, but on this occasion, unusually, I was not satisfied that there was a good reason for the absence of the word “effectiveness”.
When I was more centrally involved in local government, we regularly spoke to the Audit Commission. It used to refer to the “three E’s”—effectiveness, efficiency and economy—and used to joke that “economy” was usually left out. That is not surprising in view of the dictionary definitions of all three words. “Effectiveness” apparently means
“to accomplish the purpose, producing expected results.”
The meaning of “efficiency” is self-evident:
“performing or functioning in the best possible manner with the least waste of time and effort”.
Those are clear and relatively objective terms. “Economic”, however, is defined as
“pertaining to the production, distribution, and use of income, wealth, and commodities.”
It is a much more general term, and it is the one that the Audit Commission used to say was left out. Why on earth do clauses 1 and 2 not state that the holders of licences should be effective, which is surely very important? Although I consider that to be the relatively minor aspect of the amendments, it goes to the heart of the Bill. As I have said on a number of occasions, although the Bill gives the CAA new responsibilities to look after the interests of consumers, it does not tell us either how that is to be done or what the consumer’s interests are.
The Bill states that the CAA must oversee airports to ensure that there is continuity, and that air transport services have regard to
“the range, availability, cost and quality of airport operation services.”
That in itself is fair enough, but the Bill does not give the CAA the overarching purpose of improving aviation and ensuring that it continues to form a major part of the United Kingdom economy.
Our demand for the inclusion of the word “effectiveness” highlights the strong deficiency in the Bill that we debated in Committee. No real political controversy is involved in changing the nature of the functions of the CAA, whether we are talking about the regulation of air space or the ensuring of economy and safety. That is not a matter of great debate between the parties. There is a great debate between Members and parties, however, about how aviation should develop and whether we should continue to be a leading country in aviation, and about whether our economy, which depends on aviation, should be hindered by not having the aviation facilities we deserve. I could make a very long speech about these matters. I shall not do so, but I do want to make a few important points.
I believe that many Conservative Members, and many members of the Government, want to improve our aviation facilities, including by increasing the capacity of airports in south-east England. Unfortunately, however, they are caught in a situation where the tail is wagging the dog. Indeed, there are two tails. Dogs with two tails are usually known to be particularly happy, but not in this instance. There is the Lib Dem tail, as the Lib Dems have for historical—and, I think, mistaken—reasons always opposed increasing airport capacity in south-east England. The Government tail is also being wagged by Boris Johnson, current Mayor of London, who believes he can win the mayoral election only by opposing the expansion of airports within the London system, and by proposing instead an absurd island airport in far east London—in the Thames estuary, in fact. That may be good for his chances in the mayoral election, but it is extremely bad for the country.
Mrs Villiers
I can assure the hon. Gentleman that the Government’s policy on airport capacity is not driven by tails or dogs or anything like that. It is driven by an understanding of the importance of ensuring that aviation has the space to grow, but also that it does so within parameters that address the local impacts of aviation, such as aircraft noise and air quality, which, as I am sure the hon. Gentleman will agree, can be corrosive. We also need aviation to play its part in our efforts to tackle climate change. Our approach is, and always will be, based on a sound and sensible assessment of the evidence on how best to have a growing aviation industry that also plays its part in addressing its environmental impacts.
Graham Stringer
The Minister makes a consistent case on that, but she will not be surprised to learn that I do not accept it. The noise around airports is diminishing as planes get quieter, and air quality is regulated by European regulations, with most of the pollution around airports being caused by cars and other road traffic. That needs to be dealt with, but the levels are set by European regulations, and those levels cannot be surpassed.
Those arguing against increasing airport capacity often say that that will help in our commitments to reducing carbon dioxide emissions. As we demonstrated in Committee however, that is not the case, because as a result passengers on intercontinental journeys often have to fly via other countries, so they have to take off twice, which produces extra pollution and extra carbon dioxide.
If the Government carry through their intention to put aviation into the European emissions trading scheme, as with the polluter on the ground, aviation will be dealt with on a Europe-wide basis, so we do not need an extra domestic policy to address the issue. The Government’s current policy is strangling the British economy.
Angie Bray (Ealing Central and Acton) (Con)
It is absolutely true that Boris Johnson, Mayor of London, has always opposed the third runway at Heathrow. I live in west London and represent a west London seat, and he is right to do so given the threat a third runway would pose to the health of west Londoners. Ken Livingstone, the Labour party candidate, has also always opposed expansion at Heathrow airport. Indeed, this is one of the few topics on which all three main parties in the London mayoral campaign agree.
Graham Stringer
The hon. Lady is right in what she says, but all three mayoral candidates are wrong on this matter.
It is completely legitimate for any constituency MP, including the Secretary of State, to oppose what they think their constituents do not want. However, it is also incumbent on any Government to consider the national interest, not just the interest of people representing west London. Exactly the same argument is used about High Speed 2, and the analogy is a good one. I chair the all-party group on high speed rail, but if somebody was driving High Speed 2 through my constituency, I would oppose it, because I would like to carry on being an MP and representing my constituents. That is a reasonable thing for an MP to do, but I also know that HS2 is good for the economy. Similarly, I know that constraining runway capacity in the south-east is extremely bad for the economy. It will do no good for the environment; it will just strangle the British economy.
Mark Reckless (Rochester and Strood) (Con)
The hon. Gentleman implies that there may be a tension between a constituency interest and the national interest, but the Government’s policy and the Conservative party’s policy of being against a third runway at Heathrow precedes the previous Secretary of State. It has really been this Minister, when in opposition and in her current role, who has taken on the vested interests and put forward a policy that protects the environment, as well as the national interest. I do not believe that there is any relevant constituency interest here.
Graham Stringer
I have great respect for the hon. Gentleman, and I agree with him on a number of policies, but he is in error in his understanding of the history of the development of the Conservative party’s policy. To be fair to the Lib Dems, they have always opposed the third runway at Heathrow. The Conservative party was in favour of it until Boris Johnson thought he had a chance of winning the previous mayoral election—that changed its national policy. The Labour party was in favour of a third runway. When the Conservatives became the Government, the shadow Secretary of State said that she would change the Labour party’s policy—I do not agree with this, but I can see why she did it—so that there could be a discussion about how to deal with the problem facing us.
That problem—this is the final point I wanted to make—is that Heathrow is losing destinations and business, and not just because of the capacity on runways. We face at least a double whammy: air passenger duty is having an effect, too. The situation is directing passengers to airports in Europe that have added extra runways, such as Madrid, to where British Airways has moved much of its operations, and Charles de Gaulle. The hon. Member for Daventry (Chris Heaton-Harris) was talking about integrators. The two main centres for freight in the aviation industry are Brussels and Charles de Gaulle; we have already lost out on those issues. Passengers are going to Madrid, Charles de Gaulle, Schiphol and Frankfurt, and, increasingly, to Copenhagen, at the expense of London. That is damaging not only the London economy, but the UK regions, because of the decreasing number of routes from the regional economies into Heathrow, in particular, and into the whole of the south-east system.
Jim Shannon
The hon. Gentleman has hit on a very pertinent point. Four countries in the world are expanding their economies at the moment and doing well: Brazil, Russia, India and China. Is not the hon. Gentleman’s point that if we want to increase our trading with those four countries, we need better airport contacts? Is that not the very issue on which we seem to be losing out?
Graham Stringer
I could not agree more. Before the debate, I looked up on the internet how many cities in China have a population of more than 1 million—the size of Birmingham. There are 160 cities that are bigger than or the same size as Birmingham and five cities that are bigger than London, three of which are not very well known. The biggest, Chongqing, has a population of 31.4 million, but how many air routes do we have to Chongqing? There are routes to Shanghai from London but from nowhere else in the UK. The others are Beijing, Guangzhou—or Canton, as most people would know it—and Tianjin. Those cities are all bigger than London and there are very few routes to them. The hon. Member for Strangford (Jim Shannon) mentioned India, Brazil, Russia and China. This country wants to be the centre of the financial world through the City of London and, as Europe gets itself into a mess with deflation, our future must increasingly rely on trading with the growing economies of the world. However, at the same time, we are cutting off our links.
Mrs Villiers
I can reassure the hon. Gentleman that he should not necessarily believe all the propaganda he reads on the posters in Westminster tube station. If flights to Hong Kong are taken into account, Heathrow delivers more services to China than any of its continental rivals. London is one of the best connected cities in the world. We have five highly successful airports serving the south-east, six if we count Southend.
Graham Stringer
Since the second world war, as the Minister will know, Heathrow has been the largest international airport in the world. Soon it will no longer be that. It is still bigger than Frankfurt as regards its international destinations, but—I do not have the figures in front of me—the number of destinations served by Heathrow has gone from something like 220 to 180. Increasingly, the passenger numbers are going up because larger aeroplanes are going to fewer and fewer destinations.
I wanted to make both that small point about why the word “effective” is not in the first two clauses and the larger point that I would like not only the words to be in the Bill but there to be an effective aviation policy, which the Government do not have. On this issue, although not necessarily on others, the Government’s policies are anti-business and anti-growth. They are damaging the UK economy and they need to change them. Changing the wording of the Bill would help.
Mark Reckless
It is a pleasure to follow the hon. Member for Blackley and Broughton (Graham Stringer). First, let me respond to what he said about Heathrow and China. We all see the adverts in Westminster tube station, but there is a fundamental inconsistency in the line being pushed by BAA and the Mayor of London, among others, that Heathrow is essential as a hub but that we do not have enough point-to-point flights to different places in China. The model used by BA and its oneworld alliance relies not just on Heathrow as a hub but on Hong Kong, too. It is deciding that it is more effective to use Hong Kong as a hub, for all the reasons given by the hon. Gentleman and others, and to fly to all those Chinese cities with greater frequency and service out of Hong Kong. I do not accept the argument that a lack of point-to-point flights from Heathrow to cities in China makes the case that Heathrow needs a third runway to be a hub airport. The very economies of the hub and of the Heathrow and Hong Kong dual hub model for service for China lead to the system that we have.
Graham Stringer
The hon. Gentleman is making a very sensible point about where hubs develop in the world. Hubs developing in the middle east are doing a similar job in serving parts of China and there are also hubs in south-east Asia. A better measure of the failure of Government policy is the number of airlines that want to get into Heathrow from all parts of the world but cannot do so. A number of those airlines, some from China and some from other developing countries with large growth rates, have applied but cannot get their aeroplanes into Heathrow. Does he not agree that that is a better measure?
Mark Reckless
The reason there is unsatisfied demand for Heathrow and people who would like to fly from there but cannot is that landing slots at Heathrow are still cheaper than those at other airports and certainly cheaper than they could be. BA uses most of those landing slots, has capitalised the value and does not sell many of them on, partly to ensure that there is only limited competition so it can maximise its profits. I will return to that point, but I have quite a lot of sympathy with the hon. Gentleman’s arguments that the regulator should look to ensure that licence holders—airports—are effective as well as economic and efficient.
I also have considerable sympathy with the shadow Minister’s new clauses on National Audit Office oversight. However, I understand that those are only intended to be probing. I hope that that will also be the case with his amendments, because ultimately I trust the Minister on this issue. I do so for the ultimate reason that, in so many areas of public policy one can pretty much know what the policy will be by looking at where the money is—where the vested interests lie—and at what the civil servants are pressing. Too often Ministers merely oversee that policy solution. In this area I believe that it is the personal, political intervention of the Minister, both as shadow Secretary of State in opposition and now as Minister responsible for aviation policy, that led to, and kept, the Conservative policy against a third runway at Heathrow.
Gavin Shuker
Twice now the hon. Gentleman has referred to the blocking of a third runway as a policy, as in an aviation policy that could deliver some outcomes. Does he not accept that that is not a policy—it is just saying no?
Mark Reckless
No. I think we need a basket of options. I am delighted to hear that at Luton, in the hon. Gentleman’s constituency, there are such significant plans for expansion. At Gatwick, too, there is significant expansion, even of the one runway, and the possibility of a second runway from 2019. I wonder whether one option might be rail links between Heathrow and Gatwick and/or Luton, and whether the charges could pay for those. I am interested in hearing about the Northolt options and what the impact might be if Northolt were linked in to Heathrow. I very much believe that Birmingham airport, in terms of being half an hour from Old Oak Common or 40 minutes from Euston on High Speed 2, can become a very significant player in the south-east aviation market.
Mark Reckless
I will finish the point, if I may. I do not understand why so much aviation demand from the north and the midlands has to come all the way down to Heathrow when, perhaps, Birmingham or Luton could satisfy much of that.
Gavin Shuker
All those potential options with different airports are hugely interesting. Unfortunately, we have not heard from the Government what their policy is—their strategy. The options have to fit into some kind of framework, and still as we speak, two years into the term of this Government, none exists.
Mark Reckless
The policy is for a south-east airports consultation. The previous Government sought to conduct such a consultation, and would not even consider as an option a second runway at Gatwick until I, along with Medway council, Kent county council, the Royal Society for the Protection of Birds, and Essex county council, backed a judicial review which overturned that policy.
Pat Glass
Will the hon. Gentleman accept that now only two regional airports in this country have flights into Heathrow? Therefore, if we are travelling to New York, South Africa or Australia from the regions in this country, it is far easier to go to Charles de Gaulle, Frankfurt or Schiphol. That is not good for Heathrow, it is not good for the British economy and it is certainly not good for business in the regions.
Mark Reckless
I strongly support our policy of promoting High Speed 2 for inter-regional transport within the UK. I recognise the value of transfer passengers at Heathrow for the provision of the network it has, but I do not ultimately see how it is a disaster for the British economy if some people from the regions transfer at a European hub for some flights, rather than always coming to Heathrow. What I would like to see at Heathrow are high value flights that produce the best outcome for the country as a whole. Having Heathrow operated effectively would be very sensible. It has significantly increased its landing charges in order to pay for the third runway and, under the quinquennial review, Heathrow-BAA has carried on raking in that money, even though it is not investing in the third runway that that money was meant to fund. I do not see how that makes sense.
Most people refer to the CAA as a good and effective regulator, but how will it remain so? What certainty do we have about that? That is why a role for the NAO, expectations that it should be efficient in its management, and a role in ensuring the effectiveness of licence holders are, in principle, sensible things to ask for. I hope the Minister, the Department and in due course the CAA will listen to Members and ensure that those things happen.
The point made by my hon. Friend the Member for Daventry (Chris Heaton-Harris) about freight transport—that the consumer is indifferent to the mechanism used for that freight transport—may also apply to Heathrow. As an economist, my assessment is that the end user, the consumer of flight services through Heathrow, may be indifferent to the level of landing charges—to the extent that the price of tickets is set by the scarcity and the monopolistic pricing at Heathrow, rather than on the basis of the cost of using Heathrow. Therefore, just as I previously suggested that there might be a great deal of investment in Heathrow, which could be good for consumers without pushing up prices for those end users, so, if the CAA were to be a flabby and inefficient regulator that was putting its own charges on the industry, it could do that without the statutory constraint of acting in the interests of the users of those services.
We have seen that the scarcity at Heathrow has become capitalised in the costs of slots. When they are traded, it can be £5 million or £10 million now per pair of take-off and landing slots, to the great benefit potentially of BA, but to who else’s benefit? That has happened not through a decision of the House, and not even through the development of the common law, but through the development of European jurisprudence in this area. There is very significant value there. The CAA could transfer that value from BA to BAA with little, if any, impact on the consumer, or it could allow for significantly greater investment, or it could be quite flabby and inefficient or, to the extent that Government policy influences this and we have air passenger duty which is higher for the south-east or particularly higher for Heathrow, that might raise money to help the Government close the deficit, without having a negative impact on the users of Heathrow. All these are significant points that need to be considered, along with the value for money and the effectiveness propositions.
I should like to address briefly the issues raised in Government amendment 19 in relation to the market power determination. I support the Bill and the Minister, and I will defer to her judgment on this, but I am nervous about the extent to which we are giving power to the CAA to make this market power determination. It used to apply to Manchester; it no longer does. I have heard arguments with respect to Stansted and to Gatwick as to why it should not apply. The risk with Stansted, I would have thought, is not so much that it would shove up the prices massively, but that Stansted may not be competing effectively with Heathrow as it would if it were under separate ownership.
We have just heard comments about flights to Asia and emerging markets, but we have recently seen significant openings of routes into and out of Gatwick to places such as Vietnam and South Korea. There may be the prospect of significant further movement in that direction. But larger airlines—A380s and so on—currently do not have particularly good service at Gatwick, and it is difficult for Gatwick to invest to service the A380s and to have people transferring straight from the plane into the terminal, because of the significant cost involved and the need at least to bring along the current airline users of the airport and the great difficulty of putting through the investment if they are fighting it tooth and nail.
If Gatwick feels that it should invest significant sums of money in better terminal facilities in order to service the A380s and the type of airline that flies them, and allow the sorts of routes to high-growth markets in Asia that we so strongly support, I see no strong reason why it should be prevented from doing so and charging what the market will bear. I believe that that could be to the benefit of the consumer. The CAA might be a good regulator and take that into account, but at least the idea, in principle, of allowing freer competition and having less regulation and fewer airports with the market power determination—it is only really Heathrow where there is clearly substantial power—might lead to a more competitive system in which Gatwick and Stansted were free in the way Manchester now is. I am not certain, but it might do so. Under the Bill, it will now fall to the CAA to make that decision, unless this is reconsidered before the Bill is passed. I would like to pay my regards to the Minister and say that I trust her position on this and hope that the CAA will make the right decisions as well.
Mrs Villiers
I thank my hon. Friend the Member for Rochester and Strood (Mark Reckless) for his kind words and contribution and all Members who have taken part in the debate on this group of amendments. I was grateful that the shadow Minister expressed an interest in amendment 19 and am delighted to talk the House through the Government amendments; like those in the previous group, they are very dull and technical.
Amendment 14 rectifies a drafting omission in clause 63 by specifying that the functions captured by the references to “relevant 1998 Act functions” in clause 63 are the functions specified in clause 62(2). Amendment 15 enables further clarification of how clause 70 will operate. Clause 70 provides that two or more persons are joint operators of an airport where they jointly have overall responsibility for the management of all the area. It is important to be able to identify the operator or joint operators so that there is clarity about who is appropriately subject to regulation.
Concern has also been expressed, for example by British Airways, that the test could draw some companies into the regulatory system in a way that is not intended, for example when an airline is involved in running the terminal from which its flights take off. Amendment 15 provides that the Secretary of State has the same powers to make regulations when two or more persons are to be treated as having overall responsibility for the management of an area, as she already has for sole operators under the Bill. If unforeseen problems emerge, further clarity could be provided by secondary legislation.
On Government amendment 19, the intention of clause 77(5) is to exclude persons carrying out exempt Crown functions from economic regulation under chapters 1 and 3 of the Bill. The Bill already provides that the UK Border Force and the police, who currently carry out exempt functions on behalf of the Crown, are not subject to the prohibition on levying charges in clause 3. Amendment 19 ensures consistency, removing the possibility of the CAA being required, in response to a request under clause 7(2) to make a market power determination in respect of a core airport area operated by a person exercising exempt Crown functions. It also disapplies the requirement under clause 14(4) to treat persons carrying out exempt Crown functions as having applied for a licence if there is a positive market power determination.
After the excitement of Government amendments, I now turn to new clause 4, which relates to the National Audit Office. I fully agree with Opposition Front Benchers and others about the need for the CAA to be efficient in carrying out its functions, but I am afraid that I am not persuaded that the NAO would deliver more effective scrutiny than the current mechanisms by which the CAA’s functions are audited and scrutinised.
Moreover, the CAA is overwhelmingly funded by the aviation industry, whereas the NAO’s role is to scrutinise public spending on Parliament’s behalf, and the income the CAA receives from the industry is not classified as public spending. Parliament recognised that by removing the NAO’s role in 1984. As the shadow Minister acknowledged, the issue was considered by Sir Joseph Pilling in his 2008 review of the CAA. He concluded that there was no need for NAO involvement, and that recommendation was accepted by Ministers under the previous Government, and I have yet to see convincing reasons why they were wrong.
There are other examples of industry-funded regulators that come under the scrutiny of the National Audit Office, as the shadow Minister said, but most either are non-ministerial Government departments or rely on Government funding for a significant amount of their income. Others, such as the Financial Services Authority and the Office of Rail Regulation, are funded by industries that receive or have received significant taxpayer support—distinguishing them, again, from the aviation sector, where such indirect taxpayer support is not present.
To provide reassurance in response to the concerns that have been raised, I shall highlight the strength of the current scrutiny arrangements. The Secretary of State appoints the CAA’s external auditors; she presents the CAA’s accounts to Parliament by placing the annual report statement in the Library; she is involved in the development of the authority’s corporate plan; with the Treasury’s consent she approves the national loans and sets the CAA’s required rate of return on capital; and she will continue to approve the pay of the chairman and the non-executive members of the CAA board. That oversight, combined with the work of the CAA’s independent auditors, gives a strong incentive to secure value for money and offers accountability to Parliament.
I also advise the House that the CAA has implemented the Pilling recommendation on establishing a programme of value-for-money audits. The CAA also consults on its charges and fees, giving stakeholders the opportunity to raise any concerns that they have—they are always robust in making their views known—and the Bill makes such consultation an explicit legal requirement.
There are therefore already effective mechanisms in place to ensure that the CAA acts efficiently. As the shadow Minister said, however, when we considered a similar new clause in Committee, I undertook to reflect on these issues and whether additional reassurance could be given on them. I am therefore today announcing a change to the CAA’s accounting direction, which I hope will provide some further reassurance.
Every year the DFT issues a report direction and an accounts direction to the CAA, specifying the matters that should be addressed in the authority’s annual report and accounts. The Secretary of State intends to make an addition to the accounts direction for 2013 and succeeding years which will for the first time require the CAA to include an efficiency statement in the annual report. The CAA has also agreed to do so for its activities in the current financial year.
The efficiency statement will be subject to validation by the external auditors, whose statement in the annual report will contain a summary of their findings on it, and the Department for Transport will approve the terms of reference for this work. Industry representatives on the CAA’s finance advisory group will be given an opportunity to discuss the statement.
One advantage of such action over the Opposition’s proposed change is that it strengthens the existing annual process of scrutiny, with transparency in relation to industry and to Parliament when the Secretary of State presents the accounts, whereas the NAO’s focus on the CAA would inevitably be less frequent than any annual one. Our approach also enables the CAA to continue to pursue value for money through the selection of its external auditor by tender.
Although I agree with the Opposition about the sentiment of new clause 5, which would impose an explicit efficiency duty on the CAA, I think its adoption is unnecessary because the authority is already subject to such a duty in all but name. The CAA’s strategic plan contains the objective
“to ensure that CAA is an efficient and effective organisation which meets Better Regulation Principles and gives value for money”.
Subsections (3) and (4) of clause 1 already require the CAA to carry out its economic regulation functions under part 1 of the Bill transparently, accountably, proportionately and consistently. To meet its statutory obligation to act proportionately and to target activity only on cases where it is needed, the CAA is obliged to act efficiently and to have regard for the costs and benefits of its activities.
Moreover, the Legislative and Regulatory Reform Act 2006 provides that all statutory regulators
“should be accountable for the efficiency and effectiveness of their activities”.
The Secretary of State for Transport writes to the CAA chair setting objectives for its term, and the most recent such letter makes it very clear that the Government expect the CAA to operate efficiently and to minimise the cost to industry. That oversight, combined with the work of the CAA auditors, gives a strong incentive to secure value for money and offers accountability to Parliament. Over the past 10 years, the CAA has reduced its operating costs in real terms by more than 20%.
I turn now to the points made by the hon. Member for Blackley and Broughton (Graham Stringer). I will not trespass on your patience, Madam Deputy Speaker, with a broad-ranging discussion of aviation capacity, given that that was the subject of a new clause that was not selected, but I reassure the hon. Gentleman that we take this issue seriously and that our approach on a third runway at Heathrow is driven by the evidence on the impact that such a project would have. We believe that it is essential to find an alternative way to meet the long-term capacity needs of the UK economy.
Building a third runway at Heathrow would have a significant noise impact. People who live near Heathrow account for about 70% of the people in the UK and more than one in four of the people in Europe who are exposed to an average noise from airports of more than 55 dB. Thousands of people live with a plane going overhead every 90 seconds on a daily basis, not to mention the planes that wake them up at 4.30 in the morning. The quality-of-life impact of a third runway, which would mean 220,000 more flights every year over a densely populated part of London, would be significant. There is no technological solution in sight to ensure that planes will become quiet enough quickly enough to make the burden tolerable.
Mr Donohoe
Just to put it on the record, is the Minister saying that there is no possibility of expansion at Heathrow or near Heathrow, say at Northolt?
Mrs Villiers
What I am saying is that we are opposed to a third runway and that we believe it is essential to protect the quality of life of the communities who would be affected by it.
Dr Julian Huppert (Cambridge) (LD)
Is the Minister aware of the paper by the Aviation Environment Federation for WWF UK on capacity across the country? It found that there was space for
“a 52% growth in passengers”
and a twofold increase in air traffic movements with existing capacity. Does that mean that there is less need for the expansions that the Opposition seem to be keen on?
Mrs Villiers
I warmly agree with my hon. Friend that it is essential to make the best use of the existing capacity in the south-east and around the country. We will explore that in the process that we are undertaking on the future of our aviation capacity needs.
Gavin Shuker
I agree with the Minister that we need to make better use of the capacity that we have. Of course, Luton airport in my constituency has more capacity and we are willing to share it. Does she not accept that we have a problem, in that there is no proper UK aviation hub at present?
Mrs Villiers
As I said, London is one of the most well connected cities in the world and arguably the most well connected. It has five or, depending on one’s definition, six successful international airports that serve our economy very well. We need this debate to be based on evidence, not on the propaganda that one reads on BAA posters.
As I said, that matter is not, strictly speaking, germane to the motion, so before I try your patience, Madam Deputy Speaker, I will turn to amendments 1 and 2 tabled by the hon. Member for Blackley and Broughton. His intention is that “effectiveness” should be construed as spending wisely. Imposing such an obligation on the CAA could pull it into an inappropriate management role over regulated airports. I am sure that that is not his intention, given that he is rigorous in opposing disproportionate regulation.
My concern is that it is one thing to specify an output that is required, but quite another to specify the manner in which the operator should meet that obligation. The Bill gives the CAA the power to ensure that airports with substantial market power do not impose unreasonable charges on their customers or exploit them. The amendment might oblige the CAA to start telling an airport how to run its business in the most effective way. That outcome would be disproportionate.
The current wording in clause 1(3) is broadly understood by the stakeholders who are affected by the regime. Inserting the word “effectiveness” at this stage might undermine the clarity of the duties to which the CAA is subject, when clarity is one of the most important goals in the Bill.
My hon. Friend the Member for Daventry (Chris Heaton-Harris) is a staunch defender of the air freight industry, and it is always a pleasure to hear his contributions. I repeat the comments that I made in Committee about my admiration for the efficiency and success of that industry in the UK, and I reassure him again that in exercising its information powers in relation to the freight industry, the CAA is obliged to take a proportionate approach. The degree of intervention required in a business-to-business market may be less than is appropriate in the consumer market, and I am sure the CAA will take that on board in ensuring that it takes a proportionate approach.
Jim Fitzpatrick
We are very grateful to the Minister for her reassurances, and we certainly welcome the strengthening of the auditing arrangements for the CAA that she has outlined. We will be very keen to get the views of those who lobbied all the members of the Public Bill Committee to ensure that the CAA became even more efficient. From her explanation, it sounds as though it has been recognised that it needs strengthening. With the reassurances that she has given, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 6
Compensation for noise pollution
‘The CAA must ensure that airport operators establish and implement a scheme to compensate persons residing in or occupying business or community premises in an area designated in the licence conditions for the noise pollution arising from activities within the airport area, including the landing and taking off of aircraft.’.—(Seema Malhotra.)
Brought up, and read the First time.
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following: amendment 3, in clause 1, page 2, line 17, after ‘Chapter’, insert—
‘(ea) the need to work with NATS, the Secretary of State, the Committee on Climate Change and air transport service providers towards meeting the United Kingdom’s greenhouse gas emission reduction obligations as set out in the UK’s Carbon Budget, including the UK’s share of international aviation emissions’.
Amendment 4, page 2, line 17, after ‘Chapter’, insert—
‘(ea) the effect on the environment and on local communities of activities connected with the provision of airport operation services and air transport services at the airport to which the licence relates,’.
Amendment 5, in clause 2, page 3, line 10, leave out ‘and’ and insert—
‘(ca) the effect on the environment and on local communities of activities connected with the provision of airport operation services and air transport services at the airport to which the licence relates, and’.
Amendment 7, in clause 83, page 51, line 22, at end insert—
‘(d) greenhouse gas emissions resulting from both domestic flights and flights to European Union Member States, with greenhouse gas emissions for an equivalent journey via rail or coach.’.
Government amendment 16.
Amendment 6, in clause 84, page 52, line 11, at end insert—
‘(d) greenhouse gas emissions resulting from the use of international air transport services from a civil airport and domestic air transport services to or from a civil airport.’.
Seema Malhotra
The new clause is intended to ensure that airport operators establish and implement a noise pollution compensation scheme for residents and organisations around an airport.
I welcome the Government’s recognition of the need to address the environmental impact of aviation, which the Minister has expressed on many occasions. In Committee, I moved an amendment with similar intentions to those behind the new clause. I asked the Minister about the possibility of adding to the Bill a provisional compensation scheme for noise arising out of licensed activities affecting persons residing in, or occupying business or community premises in, an area designated in the licence conditions.
The Minister responded that the meaning of “licensed activities” was not entirely clear, and that if I intended to refer to the definition of airport operation services as licensed activities in clause 68, the amendment could not be accepted, as the clause expressly excluded air transport services from that definition. She added that a more substantive reason for her opposition to the amendment was that she believed that
“environmental protection measures should not depend on whether an airport happens to be subject to economic regulation. If there is a case for environmental regulation, this should depend on the airport’s environmental impact, regardless of whether the airport happens to have substantial market power and fall within the scope of the economic regulation framework set out in the Bill.”––[Official Report, Civil Aviation Public Bill Committee, 6 March 2012; c. 216.]
New clause 6 is intended to deal with some of those issues.
We all recognise the need for aviation to support our economy and the vital importance of airports in providing local employment. I may well recognise that more than many others, as my constituency borders Heathrow airport, which supports more than 110,000 local jobs—approximately 22% of total local employment—and provides gross value added of £5.3 billion. It is a vital national economic asset, but for Hounslow’s quarter of a million residents and the residents of neighbouring boroughs, the daily environmental impact of Heathrow includes flights overhead every 60 seconds. The majority of the borough is located within the 55 dB(A) Lden aircraft noise contour.
New clause 6 has the support of my local authority—the London borough of Hounslow—and of neighbouring MPs. In essence, it seeks provision relating to a compensation scheme for noise pollution. The measure would support local residents, business and community premises to be insulated according to a formula based on geographic zone or noise level, which could be decided or kept under review by the Secretary of State as a minimum level of the airport’s responsibility to its local area.
All hon. Members know that noise impacts on health and well-being. That debate continues. For example, the secondary analysis of the London Heathrow sample of children from the RANCH project—the EU project on road traffic and aircraft noise exposure and children’s cognition and health—examined the effects of daytime aircraft noise exposure at home and at school. It concluded that aircraft noise exposure at school had a significant effect on children’s cognitive development, and that schools needed to be an important focus for the protection of children from aircraft noise.
I have drawn on examples from my local area, but aircraft and aviation noise is a national issue that affects neighbourhoods in every airport location. The good practice guide on noise exposure and health from the European Environment Agency states that 27% of people in the 55 dB(A) Lden areas are highly annoyed by aircraft noise, and there are implications for irritation, anxiety and stress. However, one set of stakeholders whose needs are not sufficiently well recognised or reflected in the Bill or the CAA’s environmental consultation documents are local residents who live around airports and are exposed to aircraft and other noise that results from licensed activities such as aircraft taking off and landing and surface transport.
The CAA is the regulator of aviation activity in the UK, but its responsibility for the environmental impact of aviation continues to be the subject of debate, not least today. The new clause seeks to ensure that the CAA has authority to help to control the effects of noise and the quality of insulation and noise mitigation schemes that each of the major UK airports operates in the interests of local residents and the local work force. The idea is particularly relevant in respect of a change in our airport infrastructure that could mean multiple operators at a single airport. That could result in confusion over who has responsibility.
Dr Huppert
The hon. Lady makes an interesting argument. Will she help me by saying how many people and premises would need to be given compensation according to the new clause?
Seema Malhotra
That is an interesting point. I have mentioned that compensation could be determined by geographical zone or noise level. In Hounslow, all households have been assessed, as have households further afield, on where they sit within the noise contours. That minimum standard should be kept under review. If a person has had access to insulation measures in the past, they might not need them again, notwithstanding any new developments. We know that the third runway is off the agenda, but we should not have such conversations only as part of a new planning application on a new development; the matter should be kept under review all the time.
The idea is not without precedent. For American airports, airport-related noise-insulation schemes are not only regulated but administered by the Federal Aviation Administration. The UK, on the other hand, has implemented only a voluntary system of noise insulation for communities affected by aircraft noise. In Heathrow’s case, BAA administers a voluntary scheme that provides noise insulation grants. There is a review of its adequacy and we await the results of the response.
In Committee, I welcomed the CAA’s reporting of environmental impacts, and I do so again here, because it will lead to greater consistency in monitoring and a more robust evidence base to support a dialogue between local authorities and airports. However, residents who live near airports need clarity about who will be responsible for negotiating with local authorities and the formula under which different operators may have different levels of responsibility.
In my initial amendment in March, we argued that, in addition to a passive reporting role, the CAA’s role should include those of adviser and referee—although not necessarily of policeman and woman, as referred to by the Minister—and that the airport operators’ responsibilities to communities should be clearly referred to as part of the licence conditions under which they operate. That would help to provide greater clarity about, and consistency in, the principles of noise mitigation schemes, which may vary, as needs vary, across the country. Clear minimum standards should be set, however, and local authorities be given the tools and support needed to negotiate effectively for the needs of their local communities.
A process should also be in place to help if there is disagreement between airports and communities. I understand that the Minister might disagree with our proposal, but currently there appears to be no clear route for compensating for and minimising noise pollution, other than under section 78 of the Civil Aviation Act 1982, which gives the Transport Secretary powers to regulate noise. That has tended to focus on night flights and to be implemented on a voluntary basis, but it does not give adequate protection to local residents and is not future proof. In the future, the situation might be different, so we need a process and some form of regulation to guarantee the rights of local communities.
Dr Huppert
Those who served in Committee will know that I am passionate about environmental concerns and their effect on the aviation industry.
We should remember that air travel is a wonderful thing: air freight is great, it benefits business and tourism, and allows families to keep in touch. There are wonderful aspects to air travel, but it also has damaging consequences, such as noise, as we have just heard. It affects those who live nearby. Roughly one quarter of those in Europe affected by heavy aircraft noise live under the Heathrow flight path into London. It also has huge effects on the environment. Carbon dioxide and a range of other contaminants are released as a result of aviation. This is a huge, international problem that does not only affect, and cannot only be controlled in, the UK. As the former chief scientific adviser to the previous Government, Professor Sir David King, said, climate change is the greatest threat facing mankind. Aviation is a large and growing component of that, and one that is particularly poorly dealt with around the world.
We need a balance between aviation and reducing the harm it does. The CAA is already doing some work and is better now than it was a couple of years ago at taking account of environmental issues. I very much welcome that. However, I would not like to see what we heard earlier about trying to provide as much as is demanded. I am pleased that new clause 1, tabled by the hon. Member for Blackley and Broughton (Graham Stringer), was not selected. It would lead to unlimited growth and expansion, which would be extremely worrying for us all. I hope to hear from the Opposition Front-Bench spokesman that Labour dissociates itself from such a policy, but if not, we must assume that it supports it. I look forward to hearing the answer.
The policy in new clause 1 would, however, be consistent for a party that pushed for the third runway at Heathrow and the second runway at Stansted, despite the fact that the latter is operating at about only 50% of its capacity—what it really wants is a better railway line. That policy would lead to mass expansion and mass destruction around the world. And it is simply not needed. The Committee on Climate Change has come up with a climate budget for how much we can afford to increase capacity by. It estimates that it can cope with a 60% increase in passenger numbers by 2050. Conveniently enough, as I referred to earlier, the Aviation Environment Federation did some work for WWF UK showing that existing capacity will give us 52% increases by 2050—almost the same the figure, but then we do not know exactly how big the planes will be. A number of airports are already able to use bigger planes—Stansted is already set up to use A380 aeroplanes, which are code F, I think—so there is simply no need for the vast expansion that was pushed for by the Labour Government. Indeed, a number of Labour MPs still seem to be pushing for it. It would be great to have some clarity on exactly what the Opposition’s position is, as their Front Benchers seem to differ from their Back Benchers.
I was quite taken by the comments we have heard about noise pollution generally. I was interested in the numbers, because I am concerned about how such a scheme could work. I have to say that I am not persuaded that I understand how it could operate, although I would be happy to hear what is said later and see whether I can be persuaded. For example, HACAN Clear Skies—from the Heathrow Association for the Control of Aircraft Noise—estimates that about 1 million people are currently affected by noise under the Heathrow flight path, which would clearly impose too big a load when it comes to serious compensation. I would be happy if there were some way of developing further some semblance of that concept, but I am not persuaded. If the hon. Member for Feltham and Heston (Seema Malhotra) puts new clause 6 to a vote, I am afraid I will not support her, although I recognise where the idea comes from and I find it an interesting one.
Seema Malhotra
In response to the hon. Gentleman’s point about how we might determine such a scheme, there are existing processes in place, which operators such as BAA use to measure where the noise is greatest, so that they can then respond with a proportionate scheme. I see no reason why that principle could not be applied to something more comprehensive in future.
Dr Huppert
I hear with interest what the hon. Lady says, although if that is already happening, I am not quite sure what her new clause would achieve. Perhaps a worked example to give some sense of the numbers and costs involved would make the case more persuasive for me. Perhaps there will be time later—at a future date, as the Bill progresses—to understand exactly what is proposed. I would personally be interested to understand that, but at the moment I do not feel I have enough of a handle on it to support the hon. Lady’s proposal.
Graham Stringer
I do not suppose that the hon. Gentleman and I are likely to agree on this, but I would like to understand his position a little more thoroughly. Is it his contention that constraining capacity in the south-east will reduce the number of flights, or will it in fact increase the number of flights—as is my contention—as people fly to other European hubs?
Dr Huppert
The hon. Gentleman is quite right that we will agree on very little in this area, other than on the fact that we will disagree quite strongly. At the moment, we have a number of people travelling to the south-east, by road and all sorts of other means, in order to fly out. We can use some of the capacity in other areas, in the north. My contention is that by not expanding capacity in the way the previous Government wanted to, we will see less environmental degradation and we will better be able to stay within our carbon budget, which we can afford for the good of the rest of the world as well as ourselves. However, I do not think the hon. Gentleman and I are going to agree on this one, however many times we discuss it.
Turning to the amendments that deal with environmental issues, let me be clear what I would like to see. I would like to see lower emissions at every airport in the country. Some of that can be done technologically. Planes are coming out that are more and more efficient, which I very much welcome. I have mentioned some of the excellent work being done by Rolls-Royce, and some research has been done in my constituency specifically to enable that, which I very much welcome. I would also like to see more public understanding of the effects of climate change, and of what aviation does and how it compares with other things. I would also like to see some certainty that airports will be able to reclaim when they implement environmental measures—a point that was made very clear to me by AirportWatch, along with others concerned about a lack of certainty.
We had a number of discussions in the Public Bill Committee about the exact nuances of the amendments and their technical aspects. It is important to get things right for the longer term, rather than jumping to agree to half-baked or 99%-baked amendments. Although I recognise the spirit in which the shadow Minister will, I presume, be pressing some of his amendments, I do not think we are quite there yet. I hope that he will accept that concern, and I am sure he will take a different line when we come round to it.
Amendment 3 is definitely much improved. I am much more persuaded by it, but there is still the problem that it would apply only to the regulated airports. I am sure that the shadow Minister would accept that that is a concern, and if we could do something that affected all airports, that would go further—I will return to that point later. The same thing applies to amendment 7. I find it an interesting amendment, and I would be supportive of it, were it not for the fact that clause 84 already requires the same information to be published—I am sure that the Minister will correct me if I am wrong about that. That information should be published, as clause 84 says, so we do not need to move it to clause 83 merely to solve a problem. In Committee, I praised the Minister’s environmental credentials. She turned her party towards the Liberal Democrat position of supporting high-speed rail and opposing a third runway at Heathrow and a second runway at Stansted. She did a good job, and I again pay tribute to her. She made strong arguments that were more persuasive for Conservatives than those that we made.
It is not clear that the Opposition have made that leap, and I seek clarity as to why many Labour Back Benchers argued against the position adopted by shadow Ministers and why they are still hung up on providing more capacity and more runways across the south-east. When I raised that with the Minister she agreed to look further at what environmental benefits could be achieved. I am grateful to her for doing so, and for the time that she has spent with me discussing the matter. She understands quite well what I am trying to achieve.
My ideal is something that has not yet been included in the Bill, because there are some problems with the wording of my proposal, which was recommended by the Aviation Environment Federation. In paragraph 31 of its submission to the Bill Committee, it said that what it would most like to see was an
“amendment to section 4 of the Civil Aviation Act 1982 to clarify that CAA has a duty to the general public, rather than only to the aviation industry or its consumers, and that environmental impacts are as important a determinant of aviation policy as consumer demand”.
That is something that I would love to see. I understand that there are some technical problems with the precise wording of the proposal, which is why I have not been able to table a detailed amendment that I could persuade the Government to accept. I should like to get these things right for the longer term, rather than put on a small show now. However, I hope that such a proposal would be considered, and I look forward to hearing from the Minister as to whether there is any prospect of her doing so.
A key issue made clear to me by AirportWatch and others was the need for certainty for airports. We all agree that we do not want any predatory airlines—I will not suggest any that might fall into that category—to exploit a lack of clarity to avoid paying what we all believe they should pay towards environmental improvements at airports. I believe that the Minister has received legal advice that the Bill provides such certainty, but I hope that she accepts the concern expressed by AirportWatch, the AEF, others and me that there is a lack of clarity. If there is a risk that the Bill is not absolutely water-tight legally, I hope that the Government will table an amendment in the other place to ensure that we do not encounter that problem, as we all agree that we do not want to have that concern. I look forward to hearing the Minister’s thoughts.
How do we achieve the overall environmental progress that we would like? I believe that the Government will shortly publish a draft aviation policy framework. We expected them to publish it in March, but it has taken time to get it right. We welcome the fact that such work has been undertaken, and I hope that the framework looks at the possibility of environmental regulation across all airports. That would be the best solution, rather than fitting the measure into one particular route, and applying it only to regulated airports. I hope that the Minister will be able to confirm that the aviation policy framework, which we all anticipate with great excitement, will deal with those environmental concerns.
There is a prospect of the Bill doing some very good things by improving the information flow and making the CAA more aware, and by making sure that we deal with risks to airports. I hope that the aviation policy framework will offer a visionary solution that ensures that we have a sustainable aviation future.
Jim Fitzpatrick
It is a pleasure to follow the hon. Member for Cambridge (Dr Huppert), who will not be surprised to learn that he features quite strongly in the opening passage of my speech. I perceive that he has an eye problem, and I am sorry if that is the case. I hope that he is not in too much discomfort: we would not wish to see anyone in pain.
This is probably the key debate of the afternoon, because the subject of whether an environmental duty should be included in the Bill invited the most disagreements in Committee. The amendments take account of our discussions in Committee. I am grateful to the hon. Members for Amber Valley (Nigel Mills) and for Cambridge for their advice on drafting amendments, and to the Minister for the guidance that the Government have given to the Opposition about how to address those issues.
In Committee, my hon. Friend the Member for Scunthorpe (Nic Dakin) said of the hon. Member for Cambridge:
“He seems to be arguing for an environmental duty, but he does not like the amendment.”
No change there, then. The hon. Gentleman does not like these proposals either. My hon. Friend went on:
“He has not tabled any amendments of his own”—
the hon. Gentleman was having difficulty writing one in Committee, and he is still having difficulty six weeks later—
“but he is looking for the Minister to come up with an alternative. Is that correct?”
The hon. Member for Cambridge replied:
“That is an extremely good summary of my position. I would like to see an environmental duty and I hope we will be able to work across all parties to find one that delivers the aims that we share. I have faith in the Minister’s ability to find that.”––[Official Report, Civil Aviation Public Bill Committee, 28 February 2012; c. 119]
Sadly, no such measure has arrived today, so he is going to have to wait.
The hon. Member for Cambridge criticised our proposal in Committee, just as he has done today. At that time, he said:
“First, it does not mention what the shadow Minister himself mentioned at the beginning of his speech—the Committee on Climate Change. It is a great shame that the amendment does not talk about working with it; it advises the Government on setting and meeting carbon budgets and has already done a huge amount of work.”––[Official Report, Civil Aviation Public Bill Committee, 28 February 2012; c. 117.]
The hon. Gentleman went on, rightly, to congratulate the Committee on Climate Change. I am sure that most Members would do the same. I would have hoped that our new amendment 3 would adequately address the points that the hon. Gentleman was raising.
A key recommendation of the Committee on Climate Change’s report on international aviation and shipping, which was published this month, states:
“Our report concludes that international aviation and shipping emissions need to be formally included in carbon budgets. Emissions from these sectors were initially left out of carbon budgets…when the Climate Change Act became law. However, they have been informally included in the 2050 target…Under the Act, a decision on the inclusion…is required by the end of 2012. Formal inclusion of these emissions will ensure a more transparent, comprehensive and flexible accounting framework under the Climate Change Act and provide more certainty for the future.”
I would have hoped that amendment 3, which now makes reference to the Committee on Climate Change and to greenhouse gas emissions, would cover the points that the hon. Gentleman was unhappy with in Committee. Amendments 4 and 5 cover issues similar to those that were so ably raised by my hon. Friend the Member for Feltham and Heston (Seema Malhotra).
Dr Huppert
I thank the hon. Gentleman for praising my consistency. I have made the same arguments throughout our proceedings. As I think I said earlier, the amendment that he has tabled today is a significant improvement on the one that he tabled in Committee. I think that we agree on the reasons for that. Does he accept, however, that it would still affect only the economically regulated airports, and not all of the rest of them? Does he accept that that is a genuine concern for those of us who wish to see the environmental regulation of all airports?
Jim Fitzpatrick
It is almost breathtaking that, when we are proposing an environmental duty that would cover the busiest airport in the UK, the hon. Gentleman should say, “No, let’s not do that. Let’s wait till we get Southend right.” That just does not make sense. We are arguing for the introduction of an environmental duty now. He is arguing that, although he wants one, this one just does not fit the bill. I was not praising him for his consistency, by the way, and just because he is consistently wrong does not mean that I agree with him.
Mrs Villiers
I do not think that the hon. Gentleman is in a position to lecture my hon. Friend the Member for Cambridge (Dr Huppert) on consistency. In theory, Labour opposes a third runway, yet every time one of its Back Benchers mentions the subject, they tend to be very supportive of the idea.
Jim Fitzpatrick
The Minister knows full well that the shadow Secretary of State made our position on the third runway quite clear when she invited Members to attend cross-party talks on the subject. To date, as far as I am aware, my hon. Friend has not even had an answer from the Secretary of State. Our position is clear.
Jim Fitzpatrick
I want to make some progress, given that other colleagues want to speak in the debate.
In Committee, the Minister said of environmental requirements:
“Such requirements should come with the sanction of Parliament and Ministers, rather than being delegated to the CAA in its capacity as economic regulator.”––[Official Report, Civil Aviation Public Bill Committee, 28 February 2012; c. 137.]
It is our view, however, that the CAA should have an environmental duty, given the new powers and duties that it is taking on. Why is no such duty being proposed? We would have put an environmental duty in the Bill. The initial drafting included an environmental duty, although I am not sure whether the hon. Member for Cambridge would have supported that one.
Mrs Villiers
It is important for the hon. Gentleman to appreciate that the difference with those bodies is that a universal jurisdiction applies across an entire sector or industry, whereas we are dealing with a situation in which economic regulation applies only to a few airports. That is why this is not the appropriate or right way to deliver environmental regulation.
Jim Fitzpatrick
I hear what the Minister says. In our Committee discussions, those we are having today and in discussions outside, transport consistently appears as a big contributor to greenhouse gas emissions. Aviation continues to grow. In a recent speech, I believe to The Times transport conference, the Minister quoted the statistics showing that transport will, year on year out to 2030 and beyond, make a bigger contribution to those emissions, simply because the sector is growing. It cannot be right not to address the question of having an environmental duty at a time when we are we are introducing the new powers and duties and the new regulatory authority through the Bill. Surely now is the appropriate time for it.
Julie Hilling
Does my hon. Friend agree that although the majority of the Bill deals with economic regulation of some airports, it also includes other measures, such as those on security, that affect all airports? It is thus a little disingenuous to say that the Bill cannot include environmental duties on those grounds.
Jim Fitzpatrick
I am grateful to my hon. Friend for her intervention, and I entirely agree that seeking to place an environmental duty in the Bill is in no way inappropriate. We think it is entirely in keeping with the new powers to confer on the CAA a duty to take cognisance of the environmental impact of aviation.
Concerns were raised in Committee about the inclusion of the regulatory asset base, and the Gatwick Express was mentioned, along with other aspects. The Opposition believed that stronger powers were needed—and that they were needed on the face of the Bill.
We ask the question once again: why is there no environmental duty for the CAA as a regulator? The Government say that they want to be “the greenest Government ever”—fine words. The Minister proudly says that she will “yield to no one” on environmental protection. I congratulate her on that, as these are more fine words. The Lib Dems say that we were not tough or focused enough and that our words were not appropriate—more fine words, if they mean anything. The time to take action, however, is now, because we have the opportunity to do so now.
With new clause 6 and amendment 7, we think that seeking to inform passengers about the environmental impact is wholly appropriate. The Minister agreed with the principle when she said that she shared with Opposition members of the Committee
“the goal of harnessing consumer power in our efforts to reduce the environmental impacts of aviation.”—[Official Report, Civil Aviation Public Bill Committee, 13 March 2012; c. 314.]
We all know that the tools exist commercially. Travel companies produce information on the environmental impact of different modes of transport, and this is advocated by the Department for Environment, Food and Rural Affairs and by the Department of Energy and Climate Change—so why not by the Department for Transport?
We heard powerful evidence in Committee to suggest that passenger choice is based not on green issues—if that were the case, it would be welcome—but on the location of the airport, whether it serves their destination and on the convenience of getting there, as well, of course, as the cost. It is not based on the environment, but the environment does matter, and it will matter increasingly in the years ahead. Now is the time, and here is the opportunity, to encourage that type of decision making on the environment by including information about environmental impacts on ticketing and the CAA could do that. We will therefore seek to test support for new clause 6.
Yesterday my hon. Friend the Member for Garston and Halewood (Maria Eagle), the shadow Secretary of State, said:
“The Government has refused to recommit to the targets on reducing emissions from aviation set by the previous Labour government and has yet to respond positively to the Committee on Climate Change’s recommendation that this should be extended to include the UK’s share of international emissions, which is explicitly covered by the amendment.”
I look forward to the Minister’s comments on that. I cannot repeat what my hon. Friend said about the Liberal Democrats, unless the hon. Member for Cambridge (Dr Huppert) wants me to. [Hon. Members: “Go on.”] Well, she was not very kind to the Liberal Democrats. She said that they were “meekly” following the Government in rejecting our amendments. Clearly she anticipated their exact response, which is entirely inconsistent with their pre-election stance on dealing with the environmental impact of aviation.
We think that the Government should be bolder, cleaner and greener, and should accept the principle of environmental duty. If we do not receive the reassurance that we seek from the Minister—and I do not expect that we shall—we will seek to divide the House on amendment 3 and new clause 6.
Let me end by quoting recommendation 38 of the Transport Committee’s report. I see that the highly regarded independent Chair of the Committee, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman)—for whom the whole House has regard—is present. Her Committee said:
“Without giving the CAA a supplementary duty on the environment in relation to its economic regulation role, there is some risk that airports may be reluctant to invest in improving environmental performance. Whilst, as the Minister says, there may be ‘absolutely no doubt’ about measures taken to comply with statutory environmental obligations, there remains a doubt about whether the costs of discretionary measures, such as improved public transport access, can be recovered by airports in charges to airlines.”
That is one recommendation that we solidly support, which is why we wish to press the new clause and amendment to a vote at the appropriate time.
John McDonnell
I support all the new clauses and amendments, and I am sure that when the Minister has explained what her amendment is, I will support it as well.
I thought that Members throughout the House had learned as a result of the debate on the third runway and overall aviation strategy that—as the Select Committee has said—it was necessary for proper account to be taken of the environmental impact of the development of aviation, and of airports in particular. As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) pointed out, this evening we have been presented with an opportunity to ensure that that happens.
Let me explain why this is important to my community. Tonight I am to attend the annual general meeting of the Harmondsworth and Sipson residents association, which will also be attended by representatives of each of the Heathrow villages, including Longford, Harlington and, I hope, Cranford Cross. The issues that will concern them are the issues in the amendments. They will be concerned about the noise from the airport itself and about the environmental impact of air pollution, but also about the future of their villages. In other words, they will be concerned about the overall impact of the airport on their local communities.
New clause 6—to which my hon. Friend the Member for Poplar and Limehouse has spoken so eloquently, both today and in Committee—highlights the fact that the measures taken so far to address the problem of noise pollution from the airport have simply not worked. There has been some improvement, but nothing like the improvement that we want as a local community, and certainly nothing that is acceptable. There is a voluntary agreement at Heathrow purely and simply to provide insulation for a limited number of properties—private houses, and some public buildings—but although that is welcome, it is a voluntary agreement and has had no impact in bearing down on the noise from the airport. I believe that posing the threat of a compensation scheme will focus the minds of the airport authorities and the aviation industry, and will constitute a promise to local residents of at least some compensation.
The hon. Member for Cambridge (Dr Huppert) asked how such a scheme could be devised. We arrived at the idea of the insulation scheme and devised it during our debates, and although there was no actual consensus, at least we secured agreement in some form. I am sure that we can use that as a model for our scheme, which is being consulted on at present. It is not beyond the wit of man or woman to devise an appropriate scheme and build upon it for the future.
A group of my constituents live in the most air-polluted area of the whole country, along with the City of London. That is reflected in the incidence of respiratory conditions and cancer in the area. We have been designated an air quality management zone, but that has had no effect whatever on the level of air pollution in the area, because of the increase in aviation. Therefore, I support the amendments that place a responsibility on the CAA and the Secretary of State to look at environmental impacts, including air pollution and emissions. They contribute to climate change as well.
The Bill provides us with an opportunity to make this a cross-party priority. That will send the aviation industry the message that we must address these issues. Air quality management zones and all the other policies of the past 20 years have had very little impact.
I welcome the amendments that would place a duty on the Secretary of State and the CAA to take into account the overall impact of aviation activities on local communities. That is important for my community. BAA and the aviation industry have taken no account of the impact of their activities on the village of Sipson. They have blighted the Heathrow villages for almost 20 years as a result of threats of expansion. They have brought in a bond scheme whereby they have bought up the village of Sipson, even though the Government have now said there will be no third runway, for which I thank them. The Labour Opposition have said exactly the same; we are opposed to a third runway now. There is cross-House consensus on this, therefore. I am not completely sure that that is written in blood, but it will be if there is any going back on the commitment.
However, BAA is still not giving up those properties. In fact, this month it has bought more, and it has housed people in them on a temporary basis—for 12 months or two years. That has destabilised Sipson.
Kwasi Kwarteng (Spelthorne) (Con)
I am sure the hon. Gentleman appreciates that aviation is vital not only to this country, but to the community he represents, and certainly to the community I represent. I therefore want to understand the drift of his comments. Is he saying that BAA should cease to operate and that Heathrow should shut down? What exactly is he proposing?
John McDonnell
I wish I hadn’t bothered now! We must not go back to that level of debate. The hon. Gentleman is one of the most intelligent new Members of the House, and I have even started to read his books. We must not get dragged down into such trite debates. We will meet separately and work together to develop a strategy to enhance the economic benefits of Heathrow for both our communities, as I did with his predecessor. The debate is not about whether to close Heathrow; it is about how to strike the right balance between enhancing the employment benefits and protecting the environment, and that is all that these amendments do. They simply say to the Secretary of State and the CAA, “You need to take into account the environmental implications and the effects on local communities.”
What has happened in Sipson has not been taken into account. BAA is still buying properties and letting them out on a short-term basis. The community is therefore continuously blighted. There is no compensation for the local businesses—the butcher, the hairdresser, the local post office and pub. Their loyal clientele is now gone, and some of those businesses are closing down while the others can no longer earn a living.
We have met BAA and I have met Colin Marshall. I pushed the boat out and took him for a coffee in central Hayes. I sought to see whether at least some support could be devised for those local businesses to tide them over while they build up the loyal base again as best they can. The answer was no. Only two weeks ago, the board rejected that request. What is happening now? It is offering a small element to try to tart up the front of the shops—that is all.
That is the sort of blight that has occurred as a result of the activities of BAA—well not BAA, but Ferrovial, the Spanish company founded by a fascist under Franco that has now exploited my community to maximise its profits and ship them abroad to prop up the construction corporation, which is now having financial trouble. So I welcome the opportunity that these amendments would provide to place that duty on the CAA and the Secretary of State to ensure that the impact on local communities is taken into account. If these duties were in place now, BAA would have to introduce a compensation scheme for those local businesses in Sipson; it would have to stop blighting the overall area; it would have to introduce a scheme to compensate my constituents for the noise pollution they are experiencing; and it would have to drive down its operations that are producing such air pollution in my area.
I finish by saying that some of my local schools around Heathrow have a box into which children put their pumps when they go into class in the morning. They do so because they suffer from such a range of respiratory conditions, particularly asthma. In Hillingdon, we now specifically train our teachers on how to deal with asthma attacks in class; this is as a result of the air pollution, particularly that from the airport itself. The amendments are some of the most significant in terms of attempting to affect the environmental impact of aviation in this country that we have seen for many a year, and they should be treated seriously. New clause 6 should be treated seriously, because the noise affects not only people’s enjoyment, but their health, as has been shown in recent research. I am pleased that new clause 6 is being put to the test in the House tonight. Even if the Government cannot accept the other amendments, I would welcome it if they would think again, as we go into this consultation on aviation overall, to see how we can build in better environmental protections for the local communities against the expansion and operations of aviation overall.
Julie Hilling
I will not speak for long, but I wish to express the enormous disappointment, among not only the green groups, but the many people who live near airports and are affected by them, at the fact that the Government did not put an environmental duty in the Bill. I accept that the amendments that we are proposing do not go as far as we would have wanted this Bill to go. However, the speech made by my hon. Friend the Member for Hayes and Harlington (John McDonnell) demonstrated exactly why we need at least to include these amendments in the Bill and to continue to work for the future to ensure that those measures operate across all airports.
There is great concern worldwide about air travel’s effect on the environment and the damage it can do to the ozone layer, but many more people are concerned about what happens day to day. They are concerned about the effect of airports on their daily lives. Noise is the most obvious issue we talk about when we debate airports and although it is, of course, a very serious issue, it affects a smaller group of people than other environmental concerns.
Similarly the actual flight makes up only a small part of the carbon footprint of any journey by air. We also need to consider: the environmental costs of getting people to the airport by road and rail; the cost of road congestion, which is a huge issue in my community in Greater Manchester; and the cost to the environment of the car parking spaces that seem to spread across the fields, particularly around Heathrow and Gatwick, where we seem to grow cars instead of crops.
Of course the industry faces competing priorities. Its main priority has to be getting passengers to their destination in the most profitable way possible. Profits—or at least costs—are even more important for regional airports, many of which are struggling to survive at the moment. For airports it is about having as many flights as possible. Airports such as Heathrow are having to work out how to squeeze them into the restricted air and ground space. It is about getting passengers to the airport in the easiest way possible because the operators need to ensure that passengers choose to travel with them in the future. To believe that operators will consider environmental issues out of the goodness of their hearts seems somewhat naive.
Manchester, my local airport, does what it can to be a good neighbour. It has invested greatly in rail links and other mitigating measures and it is now investing in Metrolink to bring more people to the airport. I do not believe, however, that a vague requirement, rather than an absolute duty, is enough.
As was discussed in Committee, I do not believe that passengers make a choice because of the green credentials of their airport. I am sure that other passengers, like me, work out where they want to go, what price it will be and how easy it will be to get to the airport. Deciding whether to fly or catch a train might be my one environmental consideration, but I do not make any further considerations in choosing where to go. Furthermore, as has been said, other regulators, such as the Office of Rail Regulation, have a duty as regards environmental concerns. It seems a bit perverse when we are considering new duties for the CAA not to say that it should have an environmental duty.
We must say to the aviation industry that the environment is a big issue, both in terms of its carbon footprint and for those who live near airports, who are extremely disappointed that the Government have not used the Bill as an opportunity to consider the problems and do something about them. Yes, the amendments are not all that we would want, but they are a start. I urge hon. Members on both sides of the House to support them, particularly those people who have argued long and hard about their environmental concerns.
Pat Glass
At the beginning of the debate, I said that I felt that the Bill was essentially a good one with a number of omissions, and perhaps the most glaring omission of all is the statutory environmental duty. That statutory duty was part of the Bill when it was drafted by the previous Government, and it is not clear to me why the “greenest Government ever” would remove it.
In Committee, the Minister told us that the Bill is about economic regulation and that there is therefore no room for a statutory environmental duty. However, the Bill is about much more than simply the economic regulation of the CAA. If it was just about economic regulation, it would not include safety or security or an extension of the air travel organisers’ licence. It is not a clean and simple Bill about economic regulation; it is a long overdue consolidation and updating of regulations covering a wide range of issues in which those sections dealing with a statutory duty on environmental issues should have been included but have been deliberately expunged.
I could perhaps understand the Government’s reluctance to include the environmental duty if the CAA was the only economic regulator to have such a statutory duty placed on it. We have heard the Minister say in response to that point that the Bill only covers certain airports, but as my hon. Friend the Member for Bolton West (Julie Hilling) has said, in some areas, such as security, it covers all airports.
Pat Glass
May I finish this point? I will then be happy to give way.
Even if the Bill covered only certain airports, would it not be a good start to begin with the biggest airports in the country? The Minister has also said—I am sure she will say it again when she intervenes—that other economic regulators, such as Ofgem and Ofwat, have universal jurisdiction, but that is not true. Ofgem does not have universal jurisdiction. Huge areas of this country, particularly rural areas, are off gas and are therefore not covered by Ofgem. I know that because I and other Members of the House have consistently campaigned to extend Ofgem’s jurisdiction to make it universal. I am sorry, but the Minister’s argument is just not correct.
Mrs Villiers
Both the hon. Lady and the hon. Member for Bolton West (Julie Hilling) made points about parts of the Bill covering all airports, and that is undoubtedly true, but the amendments relate to economic regulation. So the amendments seek to use economic regulation as a means of achieving environmental objectives. That is one of my fundamental objections. If we are going regulate for environmental purposes, we need to do it across the board in a proportionate, targeted and efficient way, not via economic regulation.
Pat Glass
And I would agree if we had before us some regulation that would cover all airports, but we do not. So I am sorry: we have to start somewhere.
Moving on to the impact of the statutory duty, I cannot believe that anyone would argue that it is not needed. I appreciate that aviation emissions currently make up 6% of UK emissions, but we all know that that is expected to rise to as much as 25%, even if the Government stick to the current targets and even if those targets are met. But as we heard today, environmental issues around airports and air travel go much further than concerns about emissions. They include air quality around airports and in the wider environment, they include noise pollution at and around airports and they include surface transport links and access. As we heard today from my hon. Friend the Member for Blackley and Broughton (Graham Stringer), a recognised expert in this area, most pollution around airports does not actually come from planes; it comes from vehicles going to, from and around airports. Those living around and close to airports are naturally concerned about air quality and noise pollution, and they will be very unhappy to see the Government remove the statutory duty from the Bill.
Finally, I want to move on to the issue of emissions, which are of concern to us all. We all need to know that the CAA will pay proper regard to playing its part in meeting the 2015 targets, in a world in which emissions from aviation are going to increase, and in which the emissions challenge will simply get harder and harder. I do not understand, in this situation of increasing challenge, why the Government are choosing to remove the statutory duty.
I was not surprised that Conservative members of the Bill Committee voted down environmental safeguards, but I was particularly disappointed and surprised that Lib Dem members of the Committee did so too. Listening to the nice warm words today from the hon. Member for Cambridge (Dr Huppert) only increases my surprise and disappointment. I recall that in Committee, he said that he was not supporting our amendment because it was not strong enough. We have had six weeks. He had an opportunity to table much stronger amendments himself, both in Committee and today, and what have we seen? Nothing. All we have seen is the hon. Gentleman turning himself almost inside-out in an attempt to face both ways at the same time. However, all is not lost. He and his Lib Dem colleagues do have an opportunity to salve their conscience, and to have the courage of their convictions by voting for a statutory environmental duty in the Lobby this evening.
Mrs Villiers
I would like to assure the House that the coalition takes the environmental impacts of aviation very seriously—both its constituent parties. We take seriously both its global impact in terms of carbon emissions and its local impact in terms of noise and air quality. I welcome the contributions made by so many hon. Members this afternoon about the significance of those impacts—the hon. Members for Feltham and Heston (Seema Malhotra) and for Hayes and Harlington (John McDonnell), and my hon. Friends the Members for Ealing Central and Acton (Angie Bray), for Rochester and Strood (Mark Reckless) and for Cambridge (Dr Huppert). Although I have some sympathy with the underlying purpose of the amendments, there are a number of important reasons why I cannot ask the House to support them today.
I do understand the concerns expressed, by, for example, my hon. Friend the Member for Cambridge and groups such as HACAN—Heathrow Association for the Control of Airport Noise—and AirportWatch. I know that my hon. Friend is looking for further clarity on environmental investment and I hope I can provide some reassurance today on that and on how the Bill will work. I will also say to my hon. Friend and others who have expressed a view today that the Government will continue to listen with great care to the concerns raised on environmental matters, including those set out in the debate today. We shall continue to reflect carefully on whether further clarity needs to be provided in the Bill, and no doubt there will be another opportunity to consider this matter in the other place. The aviation policy framework that we shall publish next spring provides another key opportunity to address the full range of the environmental impacts of aviation and establish the best way to deal with them.
In the Government’s view, the Bill as currently drafted allows the CAA to authorise reasonable investment in measures that mitigate environmental impact, even where they are voluntarily undertaken. Where environmental measures benefit users of air transport services in the provision of airport operation services, the Bill gives the CAA the power to allow for its costs in the regulatory settlement.
The CAA made clear in its evidence to the Public Bill Committee that a system that safeguards the interests of end users and seeks to replicate a functioning market, as this system does, can and does embrace investment in environmental measures and surface access improvements. Iain Osborne of the CAA pointed out in his evidence that unregulated airports across the world invest in environmental measures. For example, although its noise mitigation scheme is now mandated as part of a planning agreement, Birmingham airport operated a voluntary scheme from 1978 to 1996. Since 2003 the airport has also operated a voluntary scheme to provide roof protection for properties affected by roof damage from aircraft vortices. Other examples include East Midlands airport’s investment in wind turbines and Bournemouth airport’s investment in solar panels. We firmly believe that it will continue to be possible for environmental investment to be authorised under the regulatory system proposed in the Bill. I hope that that provides some clarity and reassurance.
Seema Malhotra
I thank the Minister for her comments. I appreciate having the opportunity today to air these issues, particularly the concerns of local residents in my constituency of Feltham and Heston, and thank my hon. Friend the Member for Hayes and Harlington (John McDonnell) for his poignant description of the problems children face, particularly the impact of pollution and noise on their quality of life. Having listened to the debate, I welcome the Minister’s recognition of the need for greater clarity on who will be responsible and how we will mitigate local pollution and noise impacts. This is not the end of that debate, but I realise that there will be value in waiting for the Government’s strategy on a national sustainable aviation framework to see how we might be able to move forward through that route. On that basis, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Clause 1
CAA’s general duty
Amendment proposed: 3, page 2, line 17, after ‘Chapter’, insert—
‘(ea) the need to work with NATS, the Secretary of State, the Committee on Climate Change and air transport service providers towards meeting the United Kingdom’s greenhouse gas emission reduction obligations as set out in the UK’s Carbon Budget, including the UK’s share of international aviation emissions’.—(Jim Fitzpatrick.)
Question put, That the amendment be made.
Robert Flello (Stoke-on-Trent South) (Lab)
On a point of order, Mr Speaker. Herman Henry Diaz, a leading Fensuagro Colombian trade union activist, is suspected of having been forcibly disappeared a few days ago. He was organising a delegation of activists from the Putumayo department. He was last seen in the Puerto Vega area, a heavily militarised region, which raises real concerns that he may have been detained, or worse, by the Colombian army, which has form on this. I have personally met Mr Diaz. Mr Speaker, may I ask, through you, whether the Foreign Secretary would be prepared to make immediate representations calling for his release and for the Colombian authorities to guarantee his safety?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I cannot speak for the Foreign Secretary on this matter, and I have no knowledge that the Foreign Secretary is present in the House today, or no certain knowledge to the contrary. However, knowing the way in which these things work and the efficiency of Foreign Office mandarins, I confidently predict that the content of the hon. Gentleman’s point of order will wing its way to the Foreign Secretary or his officials very soon. More particularly, in the interim, the hon. Gentleman’s concern is on the record, and I thank him for raising it.
Police and Crime Commissioners
(12 years ago)
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Mr Wayne David (Caerphilly) (Lab)
We on this side of the House were not in favour of the introduction of police and crime commissioners, but Parliament agreed that they should be introduced and the first elections will be held on 15 November. It is imperative that, in the run-up to the elections, every effort should be made to familiarise the electorate with the role of PCCs, with the candidates and with the electoral system that will be used—namely, the supplementary vote.
Members will recall that the elections for PCCs were originally planned for May this year, but the Government decided to delay them until November. The Home Secretary explained to the House that more time was needed before the elections to ensure that the general public were aware of the role of commissioners and of who would be standing for election in their local area. All well and good, we might think, but here we are, less than seven months before the elections, and as far as I can tell, the Government are making painfully slow progress towards deciding what measures will be put in place to facilitate them. It is vital that such measures be put in place as soon as is humanly possible, to ensure that the elections are part of the democratic process.
It is a well established principle that all the necessary secondary legislation should be in place at least six months before a poll. We are moving close to 15 May, so will the Government make a firm commitment that the necessary secondary legislation will be in place by that date?
Mr David Hanson (Delyn) (Lab)
My hon. Friend might also wish to ask the Government whether it is indeed the Cabinet Office that—
Mr Speaker
Order. May I say gently to the right hon. Gentleman that it is not customary or desirable for Members to intervene from the Front Bench in these Adjournment debates? I gave an indication in response to a point of order yesterday of the distinction between an intervention and a speech in other people’s Adjournment debates, but that ruling referred to Back Benchers. This is a very unusual practice, and the right hon. Gentleman is not normally given to unusual practices, as far as I am aware.
Mr David
That is absolutely correct, Mr Speaker. My right hon. Friend is not known for unusual practices in any shape or form. I think that he was about to make a fair point, however. It is strange that the Minister who is to respond to the debate is not from the Home Office, when it is the Home Office that has responsibility for the matter under consideration. Instead, we have a Minister from the Cabinet Office. Perhaps he will explain the reason for this when he responds to the debate.
The Minister—although he is from the Cabinet Office—will be aware that genuine concern has been expressed by Members in this House and the other place that the Government do not intend to have a publicly funded mailing or booklet distributed locally, giving details of the candidates standing in the elections for police and crime commissioners. Like the Electoral Commission, I believe that the Government have failed to recognise the importance of such material.
Mr Mark Williams (Ceredigion) (LD)
The Government’s assertion is that there will be a central website on which all our constituents can readily access information about the candidates. Has the hon. Gentleman examined the difficulties that that could pose, certainly for my constituents in Ceredigion and across the Dyfed-Powys area who have no internet provision?
Mr David
The hon. Gentleman makes a fair point, and I agree with him completely. In the last Government, I was, among other things, the deputy Minister with responsibility for digital inclusion. I know only too well that some 7 million adults in England—excluding London—and Wales do not have internet access and have not used the internet at all in the past 12 months. Sadly, those people will not have the same access to information as those individuals who have digital computer access. The hon. Gentleman is correct to say that it is people in rural areas and the elderly who will be disadvantaged, as they will not have the same access to the kind of information that I believe they should have.
Jessica Morden (Newport East) (Lab)
Does my hon. Friend agree that having a website is not bad in itself, but that it is a radical departure from how we usually run elections, particularly when the elections are new and are taking place at a different time of year under an unfamiliar voting system?
Mr David
Yes, my hon. Friend makes entirely valid points. Nobody is against having a Home Office website with information about the candidates, but that must be as well as, not instead of, other forms of information. I think that the Government have made a mistake here.
The Government have, albeit wrongly, set their face against this proposal, so in the brief time available, I will not go over old arguments. Instead, I want to focus on a number of areas in respect of which I hope the Government will listen and improve their draft legislation. Before I go on to those points, I would like the Government to assure us that the website will be accessible to all and that the information on it will be provided in minority languages. In particular, as a Welshman, I would hope that a Welsh language version of the website will be available and that Welsh language speakers will be available for the helpline. Perhaps the Minister can provide information about that. I also hope that the information will be provided in alternative formats—in Braille or in large print, for example. I shall now move on to focus on other areas where the Government could improve their draft legislation.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman feel that the election of a police or crime commissioner should be based not on popularity alone, but on experience, ability and years of service? Does he have any thoughts on how that could be brought into the process in such a way that the bright person gets the job because they have the ability to do it well?
Mr David
I think it is important that the electorate know what the position involves and the job entails, as well as the qualities of the individuals being put forward. I am a democrat; I have faith in the electorate to make the appropriate decisions, provided, of course, that they have been given the appropriate information on which to base their decisions. That is why I believe this debate is so important.
To return to the specifics of the draft legislation, under the Government’s plans, police area returning officers—PAROs for short—will accept or reject material from candidates standing for election on 15 November. They will check and approve the material they receive, and then pass it on to the Home Office so that it can publish that material on its website. It is pretty clear to me that this will be a sensitive role for these officers, so I urge the Government to ensure that the criteria by which PAROs have to assess the material are set out clearly and in detail—much more clearly, I would suggest, than in the draft secondary legislation.
Secondly, the Electoral Commission will, to its credit, produce a booklet for every household where PCC elections are taking place. This is particularly important because the elections will take place at an unfamiliar time of year in November, as my hon. Friend the Member for Newport East (Jessica Morden) has said, and using a voting system—the supplementary vote system—that most people will not have used before. May I have an assurance from the Government that sufficient resources will be provided to the Electoral Commission for this information dissemination work to be carried out properly?
Generally, it is essential that guidance for candidates, agents, campaigners and returning officers is provided well in advance of the elections in November. The Government should note that the Electoral Commission wants most of these guidelines in place very soon so that they can be published and disseminated widely three months before the start of the regulated period. Of particular concern is the need to publish the limits on the amount of money that PCC candidates can spend during the last few weeks of the campaign, and I would hope that the spending limit for each specific police area—not a complicated calculation and a formula—is set out on the face of the secondary legislation. That is the way to ensure clarity.
Roger Williams (Brecon and Radnorshire) (LD)
The hon. Gentleman makes some good points. What worries me is that there will be no publicly funded mailing, and that individual candidates will be able to issue their own literature. That, surely, creates the possibility that the person who can afford the most literature will win the election, which is profoundly unfair.
Mr David
The hon. Gentleman’s point reinforces the need for clearly defined limits to ensure that there is no confusion or ambiguity, and that every candidate in every police area is aware of the limits that apply to him or her. There should also be stipulations governing third parties to prevent candidates from receiving indirect financial support.
I am acutely aware that, in all probability, mayoral elections will take place on the same day as the PCC elections in some parts of England. Obviously no one can foretell what will happen in the elections that will be held in a number of English cities, but the odds are that they will take place concurrently, and I know that the two sets of elections will be overseen by two separate Departments, the Home Office and the Department for Communities and Local Government. Indeed, it is possible that a third will be involved. My right hon. Friend the Member for Delyn (Mr Hanson) mentioned the Cabinet Office earlier. How will it be involved in all this? That is yet another ingredient in the mix.
Both the mayoral and the PCC elections will use the supplementary vote system, and I hope that voters will be presented with two differently designed ballot papers. That is important, because, as I have said, at least two Departments will be directly involved in running these concurrent elections. Government co-operation and a joint approach will be necessary, so that the electorate are not confused by the process. There will also be room for considerable confusion if PCC candidates are expected to communicate with voters through a website while mayoral candidates rely on locally distributed booklets, given that the elections will take place on the same day. Whether we like it or not—and I consider the position to be very unsatisfactory—there will inevitably be some confusion, because the basic means of communication will be provided through different mediums. I am keen for those difficulties to be minimised.
It is possible that the Home Office will find all this work a little too much. We are all aware of the difficulties that it is experiencing. I respectfully ask the Minister to suggest to his colleagues in the Home Office that they should consider having a word with the Deputy Prime Minister to see whether it would be possible to bring in some Cabinet Office experience. Being entirely objective, the Minister knows a heck of a lot more about these issues than the Home Office—which is supposed to be conducting the elections—and I suspect that that is why he is here tonight.
Huw Irranca-Davies (Ogmore) (Lab)
One issue that has not yet been clarified is the future of Victim Support, some of whose representatives visited me in my constituency last week. They expressed concern about what the implications for the expertise of the existing 7,000 volunteers, and about possible costs, bureaucracy and fragmentation of the service. Perhaps the Home Office will consider that as well.
Mr David
That is a fair point. Similar representations have been made to me. There is genuine concern among people involved in Victim Support about the fact that the police commissioners will have that responsibility in addition to their other responsibilities. We are, after all, talking about finite resources, and the possibility that moneys allocated for one purpose will be used for another purpose as well is causing concern. However, I am sure that the Minister will be able to allay the concerns expressed by my hon. Friend and, indeed, others outside the House.
It is essential that the PCC elections on 15 November are successful. There must be a good turnout, therefore, and the electorate must be well informed. That is why this debate is important, and I hope the Government will get a move on and get the draft legislation made into final proposals that they then put before the House so everybody is clear where we stand and we can make genuine preparations for successful democratic elections on 15 November.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
First, let me say that unlike in the previous Government, Ministers from different Departments in this Government speak to each other. We work closely. I am here tonight because I work closely with my colleagues in the Home Office. The Cabinet Office has overall responsibility for electoral policy—owned by the Deputy Prime Minister—and I work closely with Home Office Ministers. My officials in the Cabinet Office work very closely with Home Office officials. We are a very joined-up operation. That may be a new notion to the hon. Member for Caerphilly (Mr David), as he served in the dysfunctional last Labour Government where the Prime Minister and Chancellor could not bring themselves to speak to each other, but things have changed since the last election.
Mr David
I am saddened, and rather surprised, that the Minister should make a factional and crudely political point in a debate that is about democratic involvement and popular participation.
I am also surprised by what the Minister said about the Home Office. Taking his logic to its conclusion, he or one of his departmental colleagues should answer questions on PCC elections at Home Office questions, but that is not the case.
Mr Harper
The Home Office leads on policy on PCCs, but that also involves elections. The situation is just the same as in respect of the Department for Communities and Local Government: I work closely with my colleagues in that Department, and its officials work closely with my officials. We have joined-up policy across the Government. That is sensible.
As the hon. Gentleman raised the issue of departmental responsibility—and the right hon. Member for Delyn (Mr Hanson) tried to raise it—I thought it was worth making that initial point in response. I was also going to say that I am grateful to the hon. Gentleman for his very complimentary words about me; I wish to be suitably gracious about what he said.
The directly elected PCCs represent a radical reform of policing. The hon. Gentleman’s party was not initially in favour of them, but I am glad that now that Parliament has passed the legislation, it is participating in this process. Indeed, many prominent Labour figures will, perhaps, be candidates in these elections, including Lord Prescott, who has now been converted to the merits of PCCs and the importance of giving more power and control to the public—letting the public choose the people who set policing priorities, rather than their being set by the Home Office.
The PCC elections will be very valuable, and the public will be very interested in them. The police.uk website has had 47 million hits. The public are interested in local crime matters and how police officers conduct their work and how they are deployed. I know from conversations with my constituents and chief constable that people are very interested. I therefore think people will get engaged in this process, despite the fact that the elections will be held in November. There will be a decent turnout, I believe.
Mr Harper
The hon. Gentleman who secured the debate spoke for just over half the time available, so let me address at least some of his questions before taking interventions from other Members.
Our view is that top-down control, with chief constables looking upwards to the Home Office, did not work particularly well, so we want locally democratically accountable figures setting policy. However, operational matters will, of course, remain the responsibility of the chief constable. There will be police and crime panels to ensure that there is scrutiny and transparency.
The hon. Gentleman made a number of points about the elections themselves and I shall deal with some of them in turn. As I said, I am pleased that so many Members of this House and the other place are stepping forward and that we are seeing candidates from across the country. I think we will have a good slate of experienced people. To pick up on the point made by the hon. Member for Strangford (Jim Shannon), I believe that a number of people who have had experience in the criminal justice system, some of whom are former police officers but others of whom have been involved in that system, have put their names forward. So I think that the public will be offered a good range of candidates—people with practical experience and people with policy-making experience. Like the hon. Member for Caerphilly, I trust the public to be able to sort out the qualities that they want in police and crime commissioners and to make the right decisions in November.
The Government agree that it is important that candidates get their message out. To pick up on the point made by my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), candidates obviously have a responsibility to do that themselves. Of course it is not the case that candidates can spend a limitless amount of money; there will be limits on expenditure, which will be broadly proportionate to those for other types of election. So candidates will be able to spend some money, but they will not be able to spend limitless sums. We thought carefully about how we could assist candidates in doing that, and provisions will be made in the draft legislation to enable candidates, as the hon. Member for Caerphilly said, to publish information on the centrally funded website.
In addition, if the public are not able to use the website, they will be able to call a freephone number and request, on demand, printed information to be sent to them directly. We recognise that this is a novel approach, but we think that that blend of online and on-demand information will be very helpful. The website and the print-on-demand phone number will be printed on polling cards sent out in advance of the election.
Mr Harper
If my hon. Friend will forgive me, I will adopt the same stricture as I did in respect of Labour Members. Let me deal with the points that the hon. Member for Caerphilly raised, as it is his debate, and if we have time, I will be happy to take further interventions.
Polling cards will contain this information, so it will be widely distributed to voters. The Electoral Commission, with which we are working closely, will include that contact and access information in its own literature—indeed, this will be in the booklet that it is distributing to households, which will provide some information about the elections and the supplementary vote system.
The hon. Member for Caerphilly raised the issue of internet access. Although 77% or so of the population can use the internet, we recognise that there are people who cannot; my hon. Friend the Member for Ceredigion (Mr Williams) referred to people who live in his constituency in this regard. That is why we have the combination of online and print-on-demand information. I am pleased to tell the hon. Member for Caerphilly, as I anticipated that he would ask about this, that the information will be available in both English and Welsh. Candidates will be able to submit their information to go on the website in either language, and we will make sure that the website content and the printed copies are available in both languages. We will of course make sure that the information is available in a range of accessible formats for those voters who have some form of disability, to make sure that we maximise the opportunities for people to see the information.
Let me deal with why we have chosen that option rather than completely free mailings paid for by the taxpayer. We did consider funding mailings of the type used for UK parliamentary and European elections. We are minded to conclude—this is our preferred option on the website, rather than our final position—that at a time when budgets are tight, it is difficult to justify those mailings for PCC elections. There are also some logistical difficulties involved in producing a candidates booklet, such as those used for mayoral elections. The difficulties are partly to do with the size of the PCC areas and having to produce the 41 booklets simultaneously; this would be very difficult to co-ordinate across the country. We think that the approach we have adopted is a proportionate one that will give people access to the information. We will, of course, look at the experience in practice; we will look very carefully at what happens. I am sure that hon. Members in this House will not be backward in coming forward about any issues, and I am sure that the hon. Gentleman will be sure to tell us of issues in his area in Wales. We will look at this carefully but we are confident that we have adopted a sensible approach; we have worked closely with stakeholders and we think it will be successful.
As I mentioned, the Electoral Commission will be working on some public awareness information. This is in its plan, so it is in the money that it has bid for and had approved by the Speaker’s Committee on the Electoral Commission and by the House. This is something that has been in the Electoral Commission’s programme, so I am confident that it will be effective.
The hon. Member for Caerphilly also asked about the conduct rules. The elections, as he said, will take place in every police force area in England and Wales outside London, although it is worth saying that the first time that people will be able to vote for the directly elected person who will control policing will be in the London mayoral election, now that the Mayor has that responsibility. The detail for the other elections will be in the secondary legislation that we intend to lay before the House shortly. I can confirm that “shortly” means by 15 May, so that legislation will be laid before the House six months before the elections.
We have, of course, worked closely with the Electoral Commission, the Association of Electoral Administrators, returning officers, the Local Government Association, the Welsh Government, the Wales Office and the Association of Police Authorities, among others, to check that the legislation is in good order and that it will work in practice. Preparations have started. The police area returning officers will be administering the elections across the police force areas, a number of meetings have taken place and the preparations are in good order.
The hon. Gentleman asked one or two other questions and I have dealt with his question about the language. He raised some concerns about the website and I can make it very clear that the Government have ensured that they will have no role at all in the content on the website, which will be dealt with by the police area returning officers. The Government’s role is to set up the function and ensure that the information is posted; we will not have any editorial control at all, as is appropriate.
Mr David
I accept entirely what the Minister is saying, but I was making the point that it is important for any Government—whatever their political complexion —not to be accused of any kind of interference. That is why the clarity of the secondary legislation is so important.
Mr Harper
I can confirm that the legislation will be drafted—I am sure this will be tested when it is debated in the House—to ensure that it is clear that there will be no opportunity for the Government to have any role in deciding the content of the information. That would clearly not be appropriate.
Let me come to the final point about victim support services, which were mentioned by the hon. Member for Ogmore (Huw Irranca-Davies). It has been proposed—the consultation by the Ministry of Justice finished just a few days ago—to move from a national to a local model. The Government’s view, on which we consulted in our consultation document, is that rather than Whitehall attempting to pick those services and fund them across the country, the police and crime commissioners, who will be accountable to local people, will do a better job of making those judgments. I have read through the Ministry of Justice consultation document in full, as a local victim support organisation wrote to me in my capacity as a constituency MP and I wanted to ensure, having worked with Victim Support in the past, that I was confident about what would happen. I have been through the consultation document and I think the proposal is a good one that will mean more money gets spent, rather than less, and that decisions will be taken more locally. That makes sense, rather than trying to have a one-size-fits-all policy. The Ministry of Justice will consider the responses to the consultation very closely to see whether it needs to alter its policy in any way.
I think that I have answered all of the points raised by the hon. Member for Caerphilly, so, as we have one or two moments, do any of my colleagues who jumped up to intervene earlier want to do so before I sit down?
Mr Mark Williams
I thank my hon. Friend for what he said about the Welsh language, which is very important in large parts of Wales. What costings were made to examine combining the Electoral Commission’s booklet with an insertion from candidates?
Mr Harper
We did consider that and we discussed it with the Electoral Commission, which is, of course, producing one booklet to be distributed to every household across England and Wales. The difficulty is that if a booklet is going to be produced with the candidate information, 41 different versions will have to be produced. Logistically and for cost reasons, that is quite complicated. It is not quite as straightforward as my hon. Friend put it.
I hope that I have dealt with colleagues’ concerns and I am pleased that the debate was so well attended. I am grateful to the hon. Member for Caerphilly for raising points in the way that he did.
Question put and agreed to.
Youth Inclusion Programme (Bristol)
Westminster Hall
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
Anglo-Vietnamese Relations
(12 years ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr George Howarth (Knowsley) (Lab)
I begin by drawing attention to my entry in the Register of Members’ Financial Interests. As chair of the all-party group on Vietnam, it is a great privilege to have the opportunity to speak on the importance of Anglo-Vietnamese relations. Indeed, given that the Foreign Secretary is currently on a visit to Vietnam, which is the first such visit for a long time, it is timely that we have this opportunity to celebrate the strong and growing ties between our two countries. I should add that my views do not necessarily represent all those of the all-party group, which has more than 50 members from both Houses and all parties.
Initially, I would like to say a few words about some of the areas of importance, such as civil society and political reform. The Government rightly have concerns about those matters that many of us share. Of course, Vietnam has a very different political system from our own, but I am aware that there is an appetite in Vietnam for further reform of those important areas, particularly civil society and political reform. Ongoing exchanges between members of the National Assembly and our own Parliament have demonstrated a desire to improve things such as the legislative process, scrutiny and accountability.
The Government and their Vietnamese counterparts are justifiably proud of the strategic partnership between our two countries, which sets out important areas of co-operation, to which I shall refer briefly. First, importantly, it highlights the importance of political and diplomatic co-operation, including regular dialogue between leaders of both countries and enhanced parliamentary co-operation through bilateral visits, of which there have been several in recent years, including by the chairman of the National Assembly last year. Such co-operation leads to the promotion of trade and educational links, and I am sure that the Foreign Secretary’s current visit will do much to further those aims.
The strategic partnership between the two countries envisages co-operation on global and regional issues, particularly given the role of both countries in the United Nations, Vietnam’s important and leading role in the Association of Southeast Asian Nations and the UK’s role in the European Union, to which I will refer later in my speech.
On trade and investment, the agreement recognises a joint commitment to free trade and open markets, which is vital given current world economic circumstances. As an aspiration when it was agreed, but now as a reality, the agreement also refers to the importance of direct flights between London and Vietnam, which commenced last year. Indeed, I was fortunate enough to travel on the inaugural flight from London to Ho Chi Minh City.
On sustainable socio-economic development, the agreement states:
“the UK will work with Vietnam bilaterally and via the EU and other development partners to help create the necessary environment for continued economic growth and prosperity as Vietnam looks to progress beyond middle income status”.
Importantly, the strategic partnership commits both sides to the fight against corruption.
Other headings refer to the importance of links and co-operation on education, training, science and technology, security and defence, and on people-to-people links. On education, it is worth noting that the new university of Da Nang has very strong involvement from the United Kingdom. I think that four different UK universities are involved, which is a very welcome development. It is also worth noting that there are about 7,000 Vietnamese students studying in the UK. They are very important both to Vietnam and to the future of our own university system.
The closer co-operation that exists between Vietnam and the UK, particularly on important things such as trade, creates new opportunities for both countries to use our influence on each other’s behalf in our respective regions. For example, in the UK we can, in appropriate circumstances, act as good friends on behalf of Vietnam in the European Union. A couple of years ago, we gave important support in the European Union regarding the importing of shoes, for which Vietnam is very grateful. That was an important demonstration of our friendship.
Correspondingly, given its important role in ASEAN, Vietnam can in the same way be helpful to the UK. A recent report from UK Trade & Investment on the development of emerging markets over the next two years concluded that Vietnam was in the top three emerging markets, ahead of India and just behind China. Given the economic dynamism of Vietnam, it is clearly of great advantage to the UK that we have that relationship and develop it still further.
The Minister will be aware that one of the important areas of concern in Vietnam is the long-standing dispute between China, Vietnam and many of her neighbours in the region about the South China sea. There have been a number of deeply worrying incidents in relation to which the Chinese have allegedly been in contravention of the UN convention on the law of the sea. All those incidents seem to be aimed at China creating the impression that large parts of the South China sea are disputed areas. However, there is good reason to say that that is not the case.
Reported incidents have included Chinese fishing vessels supported by fishery control ships ramming survey vessels in the area and cutting underwater cables. As recently as March this year, the Chinese authorities arrested 21 Vietnamese fishermen and confiscated two fishing vessels that were carrying out legitimate fishing in the Hoang Sa archipelago. Since early 2011, tension has escalated in the region as a result of military exercises carried out by the Chinese in the Paracel and Spratly islands.
A report by the International Crisis Group published as recently as this week referred to the wider dispute in the South China sea and concluded:
“clashes on the South China Sea—3.5 million square km of water contested by Brunei, China, Malaysia, the Philippines and Vietnam—are plentiful”.
The report goes on to say:
“escalating tensions since 2009 have dealt a severe blow to China’s relations with its South East Asian neighbours and significantly tarnished its image”.
That is a fair assessment of what has gone on and what the problems are. Ominously, this week, three US ships are in Vietnam for a five-day naval exercise—perfectly legitimately, I hasten to add. It is certainly not envisaged that any of the exercises will involve live firepower. This year there is also a US-Philippines military exercise taking place off Palawan, near the disputed Spratly islands, which both Manila and Beijing claim as their own. The exercises have involved 7,000 troops, of which 4,000, according to BBC News Asia, are from the US. There is a clear build-up of tension and a lot of interest concentrating on the South China sea.
It is in the interest of keeping international trade flowing that the South China sea not be a continual source of conflict. It is of course a matter for Vietnam and those in the region who are involved in the dispute to resolve the issues by whatever multilateral and bilateral means are appropriate. However, I hope that our Government, consistent with the aims of the strategic partnership, will provide advice to Vietnam and her neighbours through appropriate means, drawing on our long experience of maritime matters and international maritime law. The Vietnamese are very keen for an appropriate dialogue with the UK on these issues.
I would like to say a few words about a specific legacy of the American-Vietnamese conflict. On a recent visit to Ho Chi Minh City, I visited a hospital caring for young people who are victims of the use of the defoliant Agent Orange during the Vietnam war. Shockingly, babies are still being born with severe disabilities as a result of that use, despite the passage of time since the end of the Vietnam war in 1975. The severity of those disabilities is so alarming and distressing that several members of the party that I was with experienced physical effects. The staff who care for these young people are deserving of the highest praise for the commitment and kindness they show. Other Members have made the same visit and share the same strong concerns. At this point, I would like to say a word of praise for the Britain-Vietnam Friendship Society, and in particular its secretary Len Aldis; it has done so much to highlight the effects of Agent Orange and to raise funds for many years on behalf of victims. The all-party parliamentary group on Vietnam, which I chair, has made a commitment to hold an event in June to raise funds to provide additional staff and other support for victims living in communities associated with the hospital that we visited.
The all-party group, which met this week, feels that the Government could use their diplomatic means to encourage the United States to recognise its obligations regarding compensation for all of those affected by Agent Orange. Whether that would involve the companies responsible for providing the chemicals, or the US Government making a gesture, is not important; the important thing is that somebody do something about it. I hope the Government, perhaps through quiet diplomacy, can promote that cause. I do not raise that issue in any anti-US spirit, but as an appeal from one close ally to another to recognise that there is a debt of honour that now needs to be redeemed.
One final point also covered in the strategic partnership is the UK’s support in combating poverty in Vietnam, which, as anybody who has looked at what is happening in Vietnam knows, is still an important issue. The UK has a good record in this respect and I urge the Government to maintain and, if possible, even improve our important contribution to programmes used for that purpose. It is important to highlight the role that charities play—some of which are based in the UK, such as Save the Children—in helping specific families find routes out of poverty. I recently visited one such programme. It is not dramatic and is not likely to make the newspaper headlines, but it supported a family, whose head had severe disabilities, by providing it with chickens. Despite his disabilities, he was able to cope with the work load of keeping the chickens and was then able to sell them at market, breed them and produce eggs. That produced an income that was otherwise not available to the family. They do not live in the lap of luxury; they lead a Spartan existence by the standards that most of us would recognise, but that support is so important. Charities often carry out such programmes in a way that is not always open to Governments.
I will conclude as I started, by stressing the importance of the growing links and friendship between our two countries. I encourage the Minister, whom I am sure will have a great deal of sympathy for much of what I have said, and his colleagues to maintain our positive input into this important relationship.
Jo Swinson (East Dunbartonshire) (LD)
I apologise for being late. I was at an event elsewhere in Parliament, meeting children with type 1 diabetes and listening to their experiences, when I suddenly noticed the time and made a mad dash to Westminster Hall.
I congratulate the right hon. Member for Knowsley (Mr Howarth) on securing the debate, because the relationship between the UK and Vietnam is important. He is the chair of the all-party parliamentary group for Vietnam and was part of a delegation that visited Vietnam at the end of last year. It is always welcome for the House to hear the first-hand thoughts, considerations and experiences of right hon. and hon. Members who have visited other countries, and listening to the right hon. Member’s words about meeting people with disabilities as a result of Agent Orange re-enforced that feeling. I commend the Foreign Secretary’s visit to Vietnam this week—I understand that he is the first to do so in 17 years—and I hope this signals the UK’s commitment to a strong relationship with Vietnam. I will focus my remarks on trade, human rights, gender equality and climate change.
Strengthening trade and business links with east Asian countries such as Vietnam is important. The Prime Minister visited various countries in the region a few weeks ago, and that is now being followed up by the Foreign Secretary, who is visiting Vietnam and other places this week. Strengthening such links is particularly important in the context of our current domestic economic problems. Looking beyond our borders to promote economic growth and ensure the health of our economy will be increasingly important.
Vietnam’s economy is expanding quickly, and so is excellent ground for increased bilateral trade. In 2010, its gross domestic product grew by 6.7%—an enviable statistic compared with other countries around the world post-2008. Leading up to 2010, the average was 6.9%. Its GDP has doubled every 10 years since 1986, and its economic growth has been second only to China. UK exports to Vietnam reached £276 million in 2010—a 32% increase on the previous year—but clearly there is more to be done. I welcome UK Trade & Investment’s goal to increase the two-way trade between the countries to $4 billion next year.
More UK companies could see Vietnam as a potential market. There are numerous business opportunities in oil and gas, agriculture, construction, financial services and information technology in that country, but also significant barriers to investment, according to the British business community, such as widespread corruption, red tape, high inflation and a lack of infrastructure in many cases.
As well as highlighting the importance of our trading relationship with Vietnam, it is really important that we do not avert our eyes from the human rights difficulties and abuses there. A Human Rights Watch report this year said that the Government in Vietnam has severely cracked down on political dissent: freedom of expression and public assembly are tightly controlled; religious activists are harassed, intimidated and imprisoned; and there are even reports that state-run drug rehabilitation centres use detainees as forced labourers to make goods for local markets and for export.
On freedom of speech, three bloggers—Nguyen Van Hai, Phan Thanh Hai and Ta Phong Tan—were jailed recently for allegedly conducting propaganda against the state under article 88 of the penal code, but effectively they were just expressing their views online. Those bloggers are founding members of the Club for Free Journalists, which exists to promote freedom of expression and independent journalism, which we in this country all hold dear and think is an important principle in a free society. However, in Vietnam, the police have harassed, intimidated and detained the members of that organisation for the past four years. I hope that, in our renewed relationship with the Vietnamese Government, we are also raising our concerns about these issues from a UK point of view.
I hope that we are also pressing firmly on the use of the death penalty, which, as a member of Amnesty, I do not believe is acceptable under any circumstance. The statistics on how many people are put to death by the state in Vietnam were deemed a state secret in 2011, so we have to rely on other sources for statistics, including human rights organisations. Amnesty recorded at least five executions and at least 23 new death sentences imposed in 2011, mostly for drug-related offences. Senior officials quoted by a newspaper have suggested that as many as 100 death sentences may be imposed every year. I hope that the strong record of the UK Government will continue in this regard, that they will ensure that our view that the death penalty is wrong is strongly represented and that this matter will be raised in our meetings with Ministers.
There is a slightly more positive story to be told about women in Vietnam. In fact, many reports say that there has been remarkable progress on gender equality in recent years, addressing disparities in education, employment and health. The World Bank gender assessment report says that women’s outcomes have improved significantly. For example, child mortality and maternal mortality have fallen sharply, which is welcome news. Between 1990 and 2004, maternal mortality fell from 233 to 85 deaths per 100,000 live births, and in 2009, it fell further, to 69 per 100,000. In the labour market, women’s participation rates are high—among the highest in the region—and are only behind China, Laos and Cambodia. In fact, bearing in mind the statistics that I quoted earlier about the growth of the Vietnamese economy, it is worth remarking that, of course, when a country properly engages the talents of 100% of its population, rather than just 50%, that has economic benefits as well. I am sure that the two statistics are not entirely unconnected. However, even on gender, there are still issues regarding older women and women living in the rural parts of Vietnam, where poverty is still significant and has a gendered aspect, with women more likely to live in poverty.
Vietnam has made a commitment to sustainable development and has said that it will respond to the challenges posed by climate change. The country faces severe threats, so adaptation measures must be a priority. If, as is predicted, the temperature increases by just over 2° C towards the end of this century, the dry season in Vietnam will become drier, with decreased rainfall, and the rainfall in the rainy season will increase, leading to greater risk of extreme weather events, including flooding and problems in the dry season. Sea levels could rise by up to 1 metre. If adaptation is not seriously addressed in Vietnam and sea levels rise, 40% of the Mekong delta, 9% of the Red river delta and 3% of the other provinces in coastal areas could be flooded. More worryingly, more than 20% of Ho Chi Minh City could be flooded.
This is a serious issue affecting Vietnam, and it is a priority for the Vietnamese Government to address. However, there is always a challenge, as with many developing economies, because it is difficult to have the pace of economic growth that is needed—with the additional energy needs and their impact on climate change—while addressing adaptation and mitigation measures.
I hope that, in common with other countries around the world, we ensure that we encourage the Vietnamese Government to take this matter seriously and share the expertise that we have learned, because part of the bilateral relationship, and an important part of our diplomacy, is sharing green technology and measures that could help them adapt and mitigate the difficulties that they will otherwise face.
I thank the right hon. Member for Knowsley again for initiating the debate. I look forward to hearing the contribution from the Opposition Front Bencher and the Minister’s responses.
Kerry McCarthy (Bristol East) (Lab)
It is, as always, a pleasure to serve under your chairmanship, Mr Caton. I congratulate my right hon. Friend the Member for Knowsley (Mr Howarth) on securing the debate, on his work as chair of the all-party parliamentary group for Vietnam and on having the courtesy to talk to me in the Lobby about some issues that he wanted to raise. It is a pleasure to see the Minister. We tend to face each other in this Chamber rather more often than he ought to, given that this is, yet again, not one of the countries that he covers in his brief, but it is always a pleasure to see him here.
As we have heard, Vietnam is fascinating country with great potential that has made great strides in recent years, but it still faces many challenges. It has come a long way over the past decade, achieving middle-income status and improvements in the quality of life for much of its population. I hope that the friendship between Britain and Vietnam is a factor in helping it achieve that progress and will be a factor in helping it achieve much more over coming years.
Vietnam has already met a number of the millennium development goals, not least on infant mortality and eradicating extreme poverty. The hon. Member for East Dunbartonshire (Jo Swinson) mentioned the progress that has been made in raising child and maternal mortality rates. The poverty rate has decreased from 58% in 1992 to 15% in 2008, which is remarkable progress. UK aid, through the Department for International Development, is making an important contribution, totalling over £200 million over the past five years, with £25 million in debt relief since 2006. But with UK aid and the development partnership agreement due to end in 2016, it is crucial that Vietnam is left in a position not only to sustain the impressive improvements that it has made, but to make much further progress.
Of course, neither this Government nor the previous Labour Administration have focused solely on aid. The right way forward is to strengthen political and economic links, particularly trade links, between our two countries. That began in 2004, with the first official visit of a Vietnamese Head of State to the UK, followed by the first visit by a Vietnamese Prime Minister in 2008, on which occasion the then Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), signed a joint declaration on partnership for progress. Five priority areas were included in that partnership agreement: trade and investment; development, including good governance, accountability and the rule of law; international issues, including Security Council co-operation and climate change; education; and tackling illegal migration and organised crime.
The declaration was a landmark achievement in our bilateral relationship, laying the foundations for the strategic partnership signed by the current Foreign Secretary in 2010, the intention of which is to strengthen the relationship on seven fronts: political and diplomatic co-operation; global and regional issues; trade and investment; sustainable socio-economic development; education, training, science and technology; security and defence; and people-to-people links. Part of the political and diplomatic co-operation includes a biennial strategic dialogue, and I very much welcome the Foreign Secretary pursuing that dialogue in Vietnam as we speak—he is certainly in the far east. The Ministry of Defence subsequently signed a co-operation memorandum of understanding, and the UK is increasing its diplomatic presence in Vietnam.
Members of the law committee of the National Assembly visited London last year to discuss political and constitutional reform with hon. Members at one of a number study sessions. It was a good opportunity, and I met some of the delegation on that occasion. Such interchange between the two Parliaments is useful for everyone concerned.
Tourism is a growth sector in Vietnam. People who have perhaps been to Thailand and such places in the past now see Vietnam as the next frontier. The first direct flights from the UK start in December, and it is hoped that they will increase tourism as well as business links.
The partnership with Vietnam is therefore developing on a number of fronts. Strengthening the ties between the UK and Vietnam is of mutual benefit to both our countries, hence the Foreign Secretary’s decision to visit Vietnam this week to meet business leaders and UKTI’s designation of Vietnam as one of its high-growth markets. Vietnam is the second most popular investment destination in the emerging markets after China, and more than 100 UK companies have registered offices in Vietnam. UK-Vietnam trade, as mentioned, was worth more than £1.8 billion last year, with UK imports accounting for the vast majority of that sum, totalling over £1.5 billion, compared with exports of only £295 million. With the strategic partnership specifying a trade volume target of $4 billion by next year, can the Minister in his response set out the progress made and the likely balance of trade over the coming years?
The bilateral relationship not only strengthens co-operation between our two countries, but provides a greater presence for the UK in ASEAN and for Vietnam in the European Union, as my right hon. Friend the Member for Knowsley said. The UK was the 13th largest investor in Vietnam last year—we were the third European nation after the Netherlands and France—and the EU is Vietnam’s third largest trading partner after China and the US. With negotiations due to start on a bilateral free trade agreement between the EU and Vietnam, making Vietnam the EU’s third partner in the region after Singapore and Malaysia, it will be important for the UK to maintain a strong position in the market and during the negotiations.
While noting the economic benefits for our countries, however, we cannot overlook the need for ongoing political, economic and social reform in Vietnam, as has been said. Having initiated the “doi moi” reforms, joined ASEAN, been a member of the UN Security Council and made impressive progress on many of the millennium development goals, Vietnam has rightly been commended. It has improved its standing in the international arena, but Vietnam’s partners, such as the UK, have a duty to support further improvements, not least in human rights, and to ensure that economic growth does not leave the poorest behind.
The Foreign Office has stated:
“Corruption in Vietnam remains systemic”,
and in the 2011 corruption perceptions index, Vietnam scored only 2.9, ranking it 112th out of 182 countries. That is of both domestic and international concern, given that the Business Anti-Corruption Portal reports that
“weak enforcement means corruption continues to be cited as one of the most problematic factors for doing business in the country.”
What support, therefore, is the UK offering for the delivery of the anti-corruption strategy?
Vietnam is to be commended for its development efforts, and it is encouraging that its 10 year socio-economic development strategy connects economic growth to social progress and equality, but the previous UN resident co-ordinator, John Hendra, has expressed concerns about whether the Administration’s efforts would reach the most vulnerable. It is one thing for a country to be lifted to middle-income status, but the benefits are not necessarily felt by everyone in the country. There is concern that, in particular, informal workers, unemployed agricultural workers and ethnic minority groups from remote areas will be left behind; 70% of the population live in the countryside and are not necessarily benefiting from urban growth.
Growth has not brought economic stability, and the country is struggling with high inflation; the Financial Times reported that food prices had risen by 32% in the 10 months to October. The Vietnamese Government have raised the minimum wage in response, but 12 million people are still in poverty, and the poverty rate among ethnic minorities is at 50%. Land ownership is a particularly difficult issue, with confusion and conflicts developing where citizens have land-use rights but the land remains officially owned by the state. It is worth noting, as the EU has, that Vietnam has sought to improve living conditions for ethnic minorities, aiding social and economic integration, including support for education in minority languages, and it is important that the UK, too, supports such efforts. Will the UK Government work to ensure that the benefits of the expanding trade relationship with Vietnam help not only the UK, but more of the Vietnamese population?
Vietnam has attracted investment and overseas business with its cheap labour—wages in China are a third higher. Wages remain low, although, as I said, the Vietnamese Government lifted the minimum wage recently. The strategic partnership declaration referred to increasing Vietnam’s footwear, garment and textile exports, which will, of course, be a pivotal source of income for the country, but will the UK Government monitor workers’ rights and conditions and any implications for Vietnam’s agricultural workers?
As the hon. Member for East Dunbartonshire mentioned, economic growth can come at a high cost to the environment. Vietnam, as she said, is particularly vulnerable to climate change; it is among the top five countries most likely to be affected by rising sea levels. Will the UK continue to provide climate change assistance for adaptation and mitigation measures?
Human trafficking remains a serious concern, which is attributable partly to the uneven economic development to which I referred and to the trend for rural-to-urban migration. Over the past year, Vietnam has developed a national plan of action on human trafficking, and its anti-human trafficking law came into effect in January. The Child Exploitation and Online Protection Centre has identified Vietnam as the No. 1 source of potential victims in the UK. Will the UK Government therefore work with the Vietnamese authorities to ensure that their measures to end trafficking are effective and that victims are supported?
On human rights, the bi-annual EU-Vietnam human rights dialogue is an important initiative and a sign of Vietnam’s commitment, as is the ASEAN Intergovernmental Commission on Human Rights. Worryingly, though, as mentioned, restrictions on freedom of expression have been tightened over the past couple of years, and the suppression of political dissent has continued. Human rights campaigners this month called for the release of the three bloggers referred to by the hon. Member for East Dunbartonshire—the founding members of the Club for Free Journalists—who have been accused of conducting propaganda against the state and could face up to 20 years in prison. Can the Minister tell us what representations the UK Government have made on the cases of those three bloggers in particular and on the more general issue of internet freedoms, freedom of expression, freedom of religion and an independent judicial system?
While Vietnam is moving forward, it is worth remembering this morning how the past continues to affect the lives of many in the country. More than 100,000 Vietnamese have been killed or injured by land mines since the Vietnam war and, according to the UN, 6.6 million hectares remain polluted, which Vietnam estimates will take decades to clear. The US ambassador to Vietnam reports that the USA has provided $62 million, but have the UK Government had any discussions with officials in either the USA or Vietnam about efforts to remove the land mines?
My right hon. Friend the Member for Knowsley spoke movingly about the effects of Agent Orange, which is another tragic legacy of the conflict. Two years ago, the UN announced a $5 million project to help clean up contamination, after the Vietnam Government had reportedly spent $5 million building landfill for contaminants on one of the three main sites affected. Vietnamese officials, however, estimate that they might need at least another $60 million to decontaminate those three bases. The US Government have contributed, and they have given some funds to help Vietnamese living with disabilities as a result of Agent Orange. Has the Foreign Office recently assessed Vietnam’s ability to clear the contamination and help its victims and what international aid could be given to assist the country?
As I mentioned earlier, the Labour Government signed a memorandum of understanding for UK-Vietnam co-operation by 2013, which included pursuing objectives in ASEAN and the EU, expanding trade, and the pursuance of the “doi moi” agenda. As we celebrate the 40th anniversary of diplomatic relations next year, it is encouraging that the UK continues to develop a closer relationship with Vietnam and to expand trade opportunities. I urge the Minister to ensure that the UK supports Vietnam in helping to spread such benefits as evenly and as widely as possible. I wish both countries the best success in pursuing their friendship in the years to come.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
It is a pleasure, Mr Caton, to serve under your chairmanship. I echo the remarks of the hon. Member for East Dunbartonshire (Jo Swinson) in thanking the right hon. Member for Knowsley (Mr Howarth) for this debate this morning. One of my happiest memories of the right hon. Gentleman is that I took part in his by-election when I was the Conservative candidate’s parliamentary friend. That by-election in his area gave me the chance to meet all the Conservative voters personally on several occasions during the three weeks, so we had a happy time without disturbing the pundits too much with a surprise result. It was the start of a very warm friendship.
Mr George Howarth
All several hundred of them fondly remember the Minister.
Alistair Burt
I am very grateful to them, including the Earl of Derby.
I thank the hon. Member for East Dunbartonshire for her comments, and her engagement with and her usual passionate commitment to human rights. I also thank the Opposition spokesman, the hon. Member for Bristol East (Kerry McCarthy) for her comments. We cover some similar ground, so I will make some general remarks, but I hope to cover most of the points that hon. Members have made. I begin with an apology on behalf of the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne) who is not here because he is representing the Foreign Secretary at the Anzac day service at Westminster Abbey. The House will understand why he is not with us, and I will discuss the debate with him to ensure that he is fully aware of the matters raised.
The right hon. Member for Knowsley is chair of the all-party group on Vietnam. He has a close interest in our relations with Vietnam, and his comments reflected that. I thank him for his courtesy in providing me with a copy of his speech, which helped in preparing my response. The debate has raised several topics that are familiar to those who follow issues in Vietnam and comes at a significant time. Vietnam and, indeed, the wider south-east Asian region are becoming increasingly important to the United Kingdom, as evidenced by the policy of the previous Government, and now by that of this Government.
The Prime Minister was in the region at the beginning of April and, as we speak, the Foreign Secretary is, as has been said, in Vietnam as part of a trip that will also take in Singapore and Brunei for the EU-ASEAN Foreign Ministers’ meeting. That visit is the first by a Foreign Secretary in 17 years. Included in his programme are talks with his Vietnamese counterpart, Mr Pham Binh Minh, and the Minister of Public Security, Mr Tran Dai Quang, with the aim of progressing UK-Vietnam relations. The trip also includes meetings with representatives from the international business and development communities, and I am sure that my right hon. Friend will be pleased to catch up with hon. Members on his return.
Vietnam is a dynamic country with a booming economy. It has been recognised by the National Security Council as a tier 3 emerging power, and is the world’s second largest exporter of rice and coffee. It is set to continue on that growth path, with the World Bank predicting 6% average growth in gross domestic product over the next two years. It has a population of more than 90 million, with a median age below 30 and a 90% literacy rate. With that projected economic growth and those demographics, the opportunities for the United Kingdom will continue to grow in conjunction with growth in Vietnam. We have seen a similar pattern in other countries in the Asia Pacific region and recognise that the world’s economic and political centre of gravity has shifted south and east. We have responded by implementing what we call the network shift, with a significant increase in resources throughout our missions in the region, including additional staff for our missions in both Hanoi and Ho Chi Minh City. That will enable us to strengthen our relations with Vietnam to ensure that there is mutual benefit.
I am sure hon. Members are aware that the UK-Vietnam bilateral relationship is already deep and strong. As part of the National Security Council’s emerging powers initiative, Vietnam is among the six ASEAN countries prioritised as an emerging power. That initiative has enabled us to transform our relationship with Vietnam, using the foundation of the UK-Vietnam strategic partnership, which was signed in 2010. The partnership covers all areas of the bilateral relationship: political and diplomatic co-operation, global and regional issues, education, trade and investment, security and defence, socio-economic development, and people-to-people links.
A key area of opportunity is co-operation on education. There are already more than 7,000 Vietnamese students in the UK, and we are proud that young people in that ambitious country see the standards and opportunities of a British education as key to their success. The right hon. Gentleman referred specifically to education. The British Council there is supporting vocational education, skills training and higher education. UK universities and colleges, as well as the Association of Chartered Certified Accountants, are running joint programmes with Vietnamese universities. We are working to establish an international-standard state university in Da Nang. A number of UK private sector players, including British University Vietnam, have set up in Hanoi and Ho Chi Minh City.
The English language is at the heart of our education offer. Seven thousand children, teens and adults study English at the British Council’s Hanoi and Ho Chi Minh City teaching centres every year. The British Council also trains 500 Government officials. It has set up a free website to offer support for English lessons, and ideas and inspiration for educators for more than 5,000 teacher members. Intel has set itself a target of a computer for every Vietnamese household by 2020. Thanks to its work with the British Council and the Vietnamese Ministry of Education and Training, each will come uploaded with fun, English-learning educational resources in line with Vietnam’s English curriculum.
We can do more. The Prime Minister announced during his visit to Indonesia that the UK has set aside new money to stimulate the expansion of educational links and collaborative programmes across the region, including with Vietnam, with increased student and academic flows in both directions. We are calling that the UK-ASEAN knowledge partnership. We will work with Vietnam and our other regional partners to map the areas of mutual interest. For the 10 ASEAN countries, there is seed money of £200,000, and we can begin to create more opportunities, with a value of up to £3 million, for individuals and institutions.
Jo Swinson
I thank the Minister for being typically generous in giving way. I welcome what he said about the UK’s strategy of engaging with emerging powers. On education, will he say what representations he has made to the Home Office to ensure that the visa regime is efficient and does not stop people coming to this country? I know that there have been issues with student visas, and if we are to expand those cultural and educational links, the issuing of visas is important and must run smoothly.
Alistair Burt
I am not as familiar with visa issues affecting Vietnam as I am with those in countries of which I have more intimate knowledge, but I think the problems are common and similar. We are trying to operate a regime that will encourage people to come to the United Kingdom within the limits set by the Home Office on security, numbers, and everything else. The balance is always difficult. I will raise with the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane the issues relating specifically to Vietnam, and I presume that he has already been in close touch with the Home Office. The balance is difficult. It is not easy anywhere, and I will ensure that the hon. Lady’s concerns are reflected back.
Education and its spin-over into the general partnership with the United Kingdom put us in a good position not only to be a leading partner in educational development but, as a result of English language use, in various commercial opportunities. I will speak about trade and investment before coming to human rights and other issues.
Vietnam’s impressive potential makes it attractive to UK businesses, which are already doing well in Vietnam. The UK is already Vietnam’s biggest foreign investor in financial services. Other sectors where there are opportunities include education, which I touched on a moment ago, real estate and retail. Bilateral trade in goods reached almost £2 billion in 2011, up by 33% on the previous year. UK exports grew by 18%, reaching £325 million. As I am sure hon. Members will recall, the strategic partnership includes a joint commitment to double trade by 2013—the hon. Member for Bristol East made the point about where our balance of trade should be heading—and our UKTI team has trade officers in Hanoi and Ho Chi Minh City to help UK companies looking to establish or expand their presence in Vietnam. However, in a rapidly growing market it is necessary to take a longer perspective, and we are working with the Vietnamese through the Joint Economic and Trade Committee to identify priority areas and boost our trade and investment relationship. Those bilateral talks include issues of market access and other points of concern to UK companies.
We are well placed to share UK expertise in the financial services, and as I have indicated, the UK is already the biggest investor in that sector in Vietnam. The UK has recently signed a memorandum of understanding with the Vietnamese Ministry of Finance under which we will co-operate on a financial framework for public-private partnerships, public debt management and sovereign credit ratings.
UK companies are world leaders in managing large infrastructure projects and that will be an important area for Vietnam in coming years. It is estimated that an investment of around $160 billion will be required over the next decade, and given the scale of that investment, new models of funding for those projects will be required. We have actively shared our experiences of the public-private partnership model with the Vietnamese, and we hope that UK companies will continue to contribute their world-class expertise.
However, despite that background and the UK’s involvement in trade and investment and commercial opportunities, we acknowledge that Vietnam must do more to meet its commitments. Vietnam has reaped the benefits of its accession to the World Trade Organisation in 2007, but its obligations must also be prioritised. We regularly encourage Vietnam to liberalise its markets further, and negotiations on an EU-Vietnam free trade agreement will start soon, which will bring additional benefits to the UK and Vietnam.
Bureaucracy and corruption remain major problems; Vietnam is ranked 116th on Transparency International’s corruption perceptions index—a long way below China and Thailand. The hon. Member for Bristol East raised that issue and asked what more we can do to help, and the UK remains keen to work with Vietnam to address those problems, including through the anti-corruption dialogue. We believe that tackling corruption has become a priority for the Vietnamese Government. They have developed a comprehensive legal framework on anti-corruption measures, and in 2009 they signed the United Nations convention against corruption. Although there has been good progress, the enforcement and impact of the convention remains patchy at best. Therefore, a joint in-country team from the Department for International Development and the Foreign and Commonwealth Office has been formed to lead our anti-corruption work. Such work is given high priority in Vietnam because it has a direct impact on UK interests and we believe that we can make a difference in a fast-emerging market. Corruption is holding back economic development in too many countries in the region, as well as in other parts of the world. It is an endemic and cultural problem, and needs to be tackled. I am confident, however, that our efforts will assist Vietnam in its attempts to deal with that problem.
Before looking at human rights, I would like to mention one or two regional issues and respond to the right hon. Gentleman’s comments about the South China sea. As Vietnam’s economic power grows, so does its political power. Through our bilateral relationship we are encouraging Vietnam to play an active and responsible role on the global stage, and to use its influence in the region and through ASEAN on issues of importance such as Burma, counter-proliferation and climate change.
As the House will be aware, the Government are concerned about tensions in the South China sea, which is a vital global trade artery. The UK has an interest in maintaining freedom of navigation in the region, and we hope that all parties can resolve disputes peacefully and in line with international law. The UK continues to call for all parties to show restraint and abide by international norms for the safe conduct of vessels at sea. We hope that the Vietnamese can build on recent discussions with all relevant parties and reach an agreement.
We recognise, however, that the dispute in the South China sea is long-standing and complex. It centres on a maze of overlapping territorial claims and the associated right to exploit maritime resources, by China, Vietnam, the Philippines, Malaysia, Taiwan and Brunei. Oil and gas reserves in the sea are significant. The South China sea is a vital global trade artery and some 50% of world trade passes through it.
As the right hon. Gentleman made clear, China, Vietnam and the Philippines have been vigorous in stating their claims. Earlier this month, Philippine and Chinese naval vessels were involved in a tense stand-off over 12 Chinese fishing vessels that were anchored in disputed waters off the north-west coast of the Philippines. Although such incidents continue to be relatively low level, the UK remains concerned about the potential for a minor skirmish to escalate quickly through a miscalculation on either side.
Our role is to encourage all those involved to seek agreement through international negotiation and existing processes. The right hon. Gentleman asked about advice from the United Kingdom, and as an island nation with a long history and involvement in such matters, our advice on maritime issues and territorial disputes will continue to be available to all parties. It is essential to find a peaceful way forward. We understand that ASEAN and China have agreed to develop a code of conduct for the South China sea, and we continue to support that process.
Let me turn to human rights, and the issue of Agent Orange that was mentioned by the right hon. Gentleman. While that remains primarily an issue for the United States and Vietnam, we share a concern about the circumstances of the past. We continue to pay close interest to the issue—I know that during a visit to Vietnam in September last year, members of the all-party group for Vietnam, together with staff from our embassy, visited a number of sites affected by the use of Agent Orange.
Since 2001, the Governments of the US and Vietnam have worked together on the potential environmental and health issues related to Agent Orange and dioxin contamination. The Joint Advisory Committee that advises both the US and Vietnam on activities related to Agent Orange and dioxin contamination, including research and environmental remediation, met for its fourth annual meeting in September 2009. In December 2010, the US and Vietnam signed a memorandum of intent to start work on dioxin clean-up in Da Nang, to be completed in 2013. Although it is primarily a matter between the US and Vietnam, we take a close interest in it and our officials have raised the issue directly with the United States. The right hon. Gentleman can be assured of our sympathy and understanding in relation to those concerns.
Other issues of human rights have been mentioned, including freedom of expression, the blogosphere, freedom of religion and freedom of politics. As the Foreign Secretary has said, human rights are essential to and indivisible from the UK’s foreign policy objectives. As hon. Members will know, the FCO publishes an annual human rights report. The 2010 report, published in April 2011, identified Vietnam as one of 26 countries of concern and highlighted the concern that there were no signs in the short term that the human rights situation there would change. I encourage all colleagues to look at the report for 2011, which is due to be published shortly.
Supporting Vietnam in improving its record on human rights remains a priority for the UK and is very much part of the strategic partnership. We engage Vietnam on human rights bilaterally and through the EU, which holds an annual human rights dialogue with Vietnam. Our overarching objective is to strengthen accountability, which would lead to increased freedom of expression, effective oversight mechanisms and a more robust response to corruption. Our efforts are focused on building engagement with the Government and the Communist party of Vietnam on key areas of concern; supporting the development of the media; enhancing openness, transparency and Government accountability; and tackling corruption.
The hon. Member for East Dunbartonshire referred to freedom of expression, which is our main human rights concern in Vietnam. The Vietnamese authorities maintain a tough stance against any political dissent and a firm grip on print, broadcast and online media across the country. We have concerns about the Vietnamese Government’s treatment of peaceful activists, bloggers and land rights campaigners. National security laws are regularly used against political dissidents and human rights defenders and often lead to lengthy prison sentences. We continue to urge the authorities to adopt a more tolerant approach, stressing the links between Vietnam’s future macro-economic development and its willingness to encourage free speech, open debate, innovation and creativity, which are all important in developing a modern, vibrant and industrialised economy.
The hon. Lady mentioned the death penalty, and I can assure her of the UK’s belief that it is wrong in all circumstances. We will continue to raise the issue with nations that do not hold that view.
The hon. Lady raised the issue of freedom of religion. In recent years, the Vietnamese Government have made progress in implementing their legislative framework to protect freedom of religion and belief. However, there are still isolated reports of harassment of religious groups by local government officials, as well as delays in approving the registration of religious groups. We and our partners in the EU continue to encourage the Vietnamese authorities to ensure that religious freedoms are respected consistently across the country and that central Government policy is understood and implemented appropriately by provincial and local authorities. There have been a number of incidents involving Christian and Buddhist sites as part of land disputes between religious groups and local authorities. In such cases, we have always urged all parties to seek a peaceful resolution, and we have urged the Vietnamese authorities to ensure that property registration procedures are applied consistently across the country.
The hon. Lady mentioned migration and trafficking, about which we are very concerned. The Vietnamese are one of the top three nationalities encountered in the UK as potential victims of trafficking. None the less, the scale of the problem is small compared with illegal migration from Vietnam. Many people are complicit in their illegal entry, but once they are in the UK, organised crime groups target those who are vulnerable and traffic them internally within the country. Sadly, Vietnamese adults are almost as likely to be trafficked for sexual exploitation as they are for labour exploitation. The key to tackling trafficking is to decrease the smuggling of Vietnamese nationals to the UK.
We are also concerned about Vietnamese minors. Between April 2009 and February 2011, 75 out of 96 victims were identified as minors. The majority arrive in the UK as clandestine entrants and are then targeted for labour exploitation, especially cannabis cultivation.
To reduce such threats, we have developed an excellent relationship with the Vietnamese Ministry of Public Security on migration issues. That is particularly significant, given that the UK is clearly the demandeur in the relationship. We are increasing work on organised crime through the Serious Organised Crime Agency, which will post a full-time officer to Vietnam in 2013. For the time being, the work is covered by a Bangkok-based officer, who visits Vietnam twice a month. Through the risk and liaison overseas network, the UK Border Agency is increasingly active in Vietnam, and it will become still more active following the agreement of the memorandum of understanding on immigration information exchange.
Colleagues raised a couple of issues about climate change. Across the Government, we will launch a new trilateral relationship with the Government of Vietnam and the World Bank, and we have been working closely with Vietnam on that. As part of the strategic partnership, the Department for International Development will fund a £3 million project covering key gaps in capacity in five Vietnamese partner Ministries, and that will include adaptation and low-carbon growth analysis.
On adaptation, DFID is developing a project on coastal adaptation in the Red river delta. We hope that will be funded by the international climate fund, which is designed to address climate change internationally. The hon. Lady was right to recognise the particular geography of Vietnam, whose river deltas put it at maximum threat from climate change. That is a further reason why we should act bilaterally with Vietnam, as well as acting on our international obligations.
The right hon. Member for Knowsley mentioned development and poverty, and I am keen to respond. On development, we recognise that economic and commercial growth and opportunities in Vietnam are perhaps the biggest drivers in raising living standards and dealing with poverty. Vietnam has made considerable progress against key development indicators and is seen as something of a success story in reducing poverty. In 2011, it ranked 128th out of 187 countries on the human development index, which is well above what could be expected, given the country’s current national income. However, challenges still remain. Some 12 million people still live in poverty, and the poverty rate among ethnic minorities is particularly high, at 52%.
Since 2006, we have granted Vietnam more than £25 million in debt relief through our DFID office in-country. Based on a 10-year development partnership agreement, the UK has provided more than £448 million in grand-aid to Vietnam. When the development partnership agreement concludes in 2016, DFID will graduate from its programme in Vietnam. As part of that transition plan, DFID will focus on ensuring that interventions are sustainable beyond the period of its presence. Long-term activities on issues such as governance, climate change, and trade and investment are increasingly taken forward as part of the strategic partnership. We are also working on that with multilateral organisations.
The hon. Member for Bristol East mentioned labour conditions and wages. As part of Vietnam’s work with the UK Government, we are discussing capacity building and sharing our experience on labour laws, union participation and economic development in conversations with partners in Vietnam.
Kerry McCarthy
Will UK trade unions be involved in that, perhaps under the umbrella of the TUC? Will they work with labour organisations in Vietnam on these issues?
Alistair Burt
If I may, I will raise that with the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane. However, I saw Brendan Barber quite recently regarding trade union activity in countries in transition in north Africa, and we have a good relationship with the TUC in taking forward work on trade unions in places where that may have been difficult historically. I am sure the same partnership opportunities will exist in Vietnam.
I hope that covers the issues colleagues have raised. If anything has been left untouched, I will, of course, ensure that it is dealt with by letter. I hope the time we have spent on the debate and the points that have been raised confirm that my right hon. Friend the Foreign Secretary’s visit to Vietnam today is timely and builds on the good relationship between the UK and Vietnam, which has been built up over a number of years. The strategic partnership between us, as well as our common concern to use the opportunities provided by trade and investment and to recognise Vietnam’s growing political power and responsibilities in the region, are all good reasons why my right hon. Friend should be there today building our relationship and looking to the future.
I also hope that what I have said about the UK’s commitments and engagement—whether on commerce, poverty or human rights—shows that we have the right balance in our relationship. We want to encourage development right across the board in Vietnam, while not holding back on addressing issues that may be detrimental to its development, as well as those issues that any country, on an international basis, will want to put right over a period of time. In the UK, Vietnam has a good partner on those issues. We will offer advice and support as Vietnam continues its progress through the century.
Sexting and Sexual Grooming
(12 years ago)
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Ann Coffey (Stockport) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I welcome the Minister to this debate; he has a very strong commitment to safeguarding children.
I want to begin by supporting the excellent recommendations to protect children from online pornography that were contained in last week’s report on the independent parliamentary inquiry into online child protection, led by the hon. Member for Devizes (Claire Perry). Today, I want to focus on one aspect that the online inquiry mentioned was of great concern to parents: the growing phenomenon of sexting.
Sexting involves the sharing of sexually suggestive messages or images electronically, primarily between mobile phones. According to Ofcom, about 50% of eight to 11-year-olds and 88% of 12 to 15-year-olds own a mobile phone. The speed with which children and young people are gaining access to the internet—accelerated with the advent of smartphones, enabling children to access the internet from their mobile phones—is unprecedented.
The problem is growing, according to the children’s charity Beat Bullying, which is very concerned that there is increasing peer pressure to send sexting images; and the age is getting younger. Its research, carried out in 2009, showed that 38% of children aged 11 to 18 had received a sexually explicit or distressing text or e-mail. Those figures are backed up by research from Plymouth university, which found that 40% of 14 to 16-year-olds said their friends engaged in sexting. In addition, a survey by Beat Bullying in 2010 revealed that more than 54% of teachers were aware of pupils creating and sharing sexually suggestive messages and images via mobile phones or the internet. In Manchester, each week two schools are turning to e-safety groups for help about sexting incidents.
I congratulate the Manchester Evening News and its reporter Amy Glendinning on recognising this issue. The newspaper’s excellent series about internet safety has examined the dangers that lurk online and the traps that children fall into, including sexting. The coverage included recommendations and advice from local police and schools. That is another example of public service journalism at its best from the Manchester Evening News and follows its groundbreaking campaign last year about children missing from home, which was of great interest to me as the chair of the all-party group on runaway and missing children and adults. In many ways, the missing people and sexting issues are linked, and charities such as the Children’s Society feel that sexting should be recognised as part of the sexual grooming process that many vulnerable, runaway or missing children fall victim to.
Our children’s lives, including their experiences at school, are very different from our childhood and experiences of school, but one aspect of childhood remains the same. Throughout the ages, as children have grown up, they have wanted to push boundaries at an age when they are more sexually and socially aware; they want to experiment and tread their own path to independence. That is normal. But what is different today is that, with new technology, the risk that children and young people are exposed to as part of that process has risen dramatically.
Today’s phenomenon of sexting involves children and young people taking pictures of themselves, perhaps to send to established boyfriends or girlfriends, to create romantic interest or for reasons such as attention seeking. There is often no criminal behaviour beyond the creation or sending of images, no apparent malice and no lack of willing participation by young people who are pictured. The problem is that, once the pictures are taken and sent, the sender loses control of them and they could end up anywhere, from being passed all around school to being viewed and passed on by paedophiles. In addition, children’s charities fear that young people are being coerced into providing explicit images online, which are then shared without their consent via phones and social networking sites—a process known as doxing.
According to Sherry Adhami of Beat Bullying, sexting has become an epidemic. She says:
“We are seeing it more and more—we’ve even seen it in primary schools. It is 100 per cent classless and this affects children whether they are in deprived or affluent areas.”
Beat Bullying says that sexting can be used as a form of cyber-bulling, when an individual or a group of people deliberately attempts to hurt, upset, threaten or humiliate someone else. That includes situations when a recipient of images or text is made to feel uncomfortable as a direct result of that content or is asked to do something that makes them feel distressed.
Sexting becomes problematic when it leads to criminal or abusive behaviour, such as sexual abuse, extortion, threats, malicious conduct arising from interpersonal conflicts, or the creation, sending or showing of images without the knowledge or against the will of the person who is pictured, or if it becomes a tool for sexual grooming. Such grooming involves not just adults grooming children, but increasingly children grooming other children.
A Beat Bullying survey of 11 to 18-year-olds found that 45% of text messages were from their peers, but the problem is that young people are very vulnerable to suggestions from their peers. There is a fine line between young people voluntarily sharing images and their feeling under pressure to do so. The recognition that children and young people can be sexually victimised by other young people is reshaping our understanding of the issue.
It is part of the growing-up process for both girls and boys to decide what sexual behaviour they feel comfortable with. However, some young girls are particularly vulnerable to pressure—for example, girls with low self-esteem, those from dysfunctional families or those living in care. Such girls are particularly vulnerable to sexual exploitation, both by adults and their peers.
Sexual grooming happens when someone is enticed to do something that they do not want to do, and the link between sexual grooming and sexting is becoming increasingly apparent. The Children’s Society has told me that its practitioners around the country are finding that sexting is a growing method of sexually grooming young people. It has said of sexting:
“It becomes a tool of coercion, threat and power, as young people are encouraged to take pictures or videos of themselves, initially often for a financial reward or because they are groomed into thinking the person is their boyfriend. The sexting then becomes a tool of manipulation and the young person is threatened that the images will be shared with their friends and teachers. A key problem is that young people see these texts as harmless fun but they quickly lead to sexualised conversations and grooming.”
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Lady on securing this debate, which is very timely. She has hit on an important point. Young people, particularly vulnerable young females, quite often look at sexting as a fairly innocent, normal exchange of either messages or images, and they do not realise the seriousness of what they are doing and how others could use that material. That is what we have to concentrate on today, and I am glad that the hon. Lady is making that point. Does she agree?
Ann Coffey
I certainly agree with the hon. Gentleman, and I am very pleased that there is a growing body of support among parliamentarians about the fact that we must address this important issue.
The Children’s Society has also said of sexting:
“Because it is not face to face interaction, young people will also behave in a different way without realising the risks that they are exposing themselves to, until it is too late.”
The National Society for the Prevention of Cruelty to Children will publish further research into sexting next month. It gave me an extract from a ChildLine call from a girl aged 16, which demonstrated the risk and potential harm to young people from sexting. She said:
“I have been in contact with a man who is a lot older than me. At first, he was nice, complimented my pictures and we became friends on a social network site. I forgot my phone number was on there and he started texting and calling me, saying explicit things and sending me sexual photos. He wants me to…have sex and I’m scared. I really don’t want to, but what do I do?”
As I have said, today’s young people live in a very different world due to the rapid pace of technological change that we have seen during the past 20 years. It has given them unprecedented access to global communication and information. However, as I have outlined, there are accompanying risks as a result. Those risks range from private photos shared between two young people becoming public property and leading to humiliation, bullying and blackmail to the use of those images for sophisticated online sexual grooming.
I reiterate that I support the recommendations in the online child protection inquiry as a step forward in protecting children, and I welcome the child sexual exploitation action plan that the Minister published last year. Local safeguarding children’s boards need to be aware of sexting as a tool for sexual grooming, so that they develop strategies in their areas to help them to safeguard children.
What more can be done? Of course sending sexual images is a criminal offence. However, I support the guidance of the Association of Chief Police Officers, which says:
“ACPO does not support the prosecution or criminalisation of children for taking indecent images of themselves and sharing them. Being prosecuted through the criminal justice system is likely to be distressing and upsetting for children, especially if they are convicted and punished. The label of ‘sex offender’ that would be applied to a child or young person convicted of such offences is regrettable, unjust and clearly detrimental to their future health and wellbeing.”
I agree that, in most instances and depending on the circumstances, sexting should be dealt with under general safeguarding.
Children and young people need to be supported by their parents, teachers and peers to ensure that they are empowered to manage new technology. Charities such as Family Lives offer valuable advice and help to parents who are concerned about their children’s sexual behaviour. A lot of good work is going on in schools and police forces to raise awareness and to recognise sexting as part of the grooming process. The Child Exploitation and Online Protection Centre provides an excellent education campaign called Thinkuknow and has produced a film about sexting. It is important that education and awareness-raising programmes focus on children who send images or exert pressure on other children to produce images without realising the extent of the damage that they can cause. Charities such as Beat Bullying have a great deal of expertise in that respect.
More needs to be done, however. I want the mobile phone industry to do more to highlight some of the dangers of its products, in the same way as the gambling and alcohol industries provide help for people who encounter problems arising from their products. The gambling industry provides funding for education and the treatment of problem gambling and the drinks industry funds the charity Drinkaware.
The mobile phone industry has a great responsibility, given the profits that it makes and its targeting of young people to buy its products, to set aside money to inform young people of the dangers of sexting. The industry should provide an information and advice leaflet with each new mobile phone, warning of the dangers of sexting. It should also pay for advertising on TV and in the press and for the promotion of helplines, such as the NSPCC’s ChildLine. The leaflet with each new mobile phone should explain how, at the click of a button, an image intended for private use can lead to public humiliation and even fall into the hands of sophisticated sexual predators. I should like retail sales people to be trained to discuss the risks of sexting when selling phones to young people or to adults buying them on their behalf.
The UK Council for Child Internet Safety, which the Minister jointly chairs and on which charities and some mobile phone operators sit, has been involved in debates about online safety for some time, so I am sure that something is being done to make progress. However, I hope the Minister will take my specific ideas about how mobile phone industries can do more and raise them at his next meeting with those industries.
As I have said, what can be seen by young people as the relatively harmless activity of sexting can lead to quite serious consequences for the young person involved. It is important to prevent that, and I feel strongly that by giving more information and increasing awareness among children and young people, we may prevent further harm coming to them, whether from bullying, blackmail or sexual exploitation or grooming. We must do what we can to educate and inform children and young people about the risks of sexting, so that their choices are based on an understanding of the consequences of their actions. The mobile phone companies must take their share of responsibility to help safeguard children and young people.
The Parliamentary Under-Secretary of State for Education (Tim Loughton)
Mr Caton, it is a pleasure to serve under your chairmanship, and to congratulate the hon. Member for Stockport (Ann Coffey) on securing the debate—not just because it is traditional to do so, but because of her continuing work on child safeguarding, whether online or in relation to more conventional forms of abuse of children, if I can call put it like that. She has helped me and the Department with work on child sexual exploitation. The debate is part of raising awareness of the whole subject, and her work has also given rise to a useful article in The Independent today.
As the hon. Lady knows, there is no silver bullet to deal with the issues. She was right about the unprecedented access to global communications that is now available— stuff that she and I were never used to as children. It is a good thing, but it brings risks. That is why the UK Council for Child Internet Safety and others are working to bring about a big, joined-up approach. Technology will always be one step ahead, and we must make sure that there are as many safeguards as possible, at as many danger points as possible. I am therefore very grateful to the hon. Lady for her part in that work, and her kind comments about what we are trying to achieve. We share the same goals.
The debate is topical, as the press has been full of headlines about child online safety, and I reiterate the welcome to last week’s report headed up by my hon. Friend the Member for Devizes (Claire Perry). I am sure that the debate will help us to keep the issue on the radar and provide an opportunity to show what progress is being made—and there is progress, even though it may not be as visible as the hon. Member for Stockport and I might want. However, the use of technology to groom children, not least through the internet—and through social networking in particular—has become an increasing cause for concern in recent years. As we are all beginning to recognise, there are close links between the issue of missing children—on which, again, the hon. Lady is something of a House expert—and the grooming of young people for sexual exploitation.
The Government have understood those links, as the hon. Lady said, and recognise that this must be treated as a strong priority. That is reflected in our new missing children and adults strategy, and the Government’s action plan on tackling child sexual exploitation, both of which highlight the vulnerabilities of missing children and young people. It is important that there is a joined-up Government approach. Perhaps I should have pointed out earlier that normally one of my colleagues from the Home Office would have replied to the debate today. They were not able to do that, but I am rather happier that I could do it, because the Home Office and the Department for Education in particular work closely together. We co-chair UKCCIS, as the hon. Lady knows, to make sure that we have a joined-up approach, and the present situation shows how interchangeable the arrangement is.
In addition, the concept of peer-to-peer sexting is now raising its head and can have far-reaching consequences that need to be addressed. The hon. Lady mentioned sexting, doxing and all sorts of other terms that I am somewhat familiar with as the father to three teenage children who regularly have to be surgically removed from their mobile and other IT devices. I see the situation first-hand, and I am sure that the hon. Lady does, too. I assure her and all hon. Members that the Government take seriously our responsibility to ensure that the response in all areas of child protection and safeguarding is as effective as possible, and that it will always be a priority for the Government.
The hon. Lady mentioned the Child Exploitation and Online Protection Centre, which is a beacon. CEOP continues to play a crucial role in ensuring that children are safeguarded, and I pay tribute to its head, Peter Davies. Of course, we should encourage young people to use technology, but it is important that they are made aware of the dangers involved—as should their parents, teachers and others around them. We need to continue to raise awareness of the risks and to educate young people about staying safe online and offline, and about the use of mobile technology—particularly the sharing of images of themselves and others.
Young people increasingly use technology not only to stay in touch but to explore things such as sex and to push the boundaries in what they send and to whom they send it. Early intervention needs to be part of the solution if we are to educate young people, teachers and families about the consequences of their actions and how to keep children and young people safe. It is now so easy to send pictures instantly, via e-mails and texts, and on Twitter and through other social networking sites, that there are instances of boys or girls sending sexual images of themselves to others without any regard for the consequences. Those behaviours are often implicated in patterns of bullying, as the hon. Lady said, with messages and images being elicited in a coercive context, used as blackmail or circulated beyond the intended recipient. Just because that is technologically easy to do, and the victim may not be standing in front of the person concerned at the time, does not mean it is the right thing to do.
Sexting is becoming increasingly part of the mobile phone-related child protection context, with many children on the receiving end of sexting or sexual bullying. The trend of sharing sexual content by mobile phone can also be extremely abusive, and can have a devastating impact on the children affected. The use of technology has facilitated that exchange, which can make a young person feel very uncomfortable and potentially lead to harassment. Such young people often find out later that the image has been passed on to others and, as a result, they leave themselves open to the risk of becoming the victims of bullying, harassment or, worse still, sexual exploitation. There is a clear link there. The CEOP threat assessment for 2011-12 sets out six high-priority threats to children and young people, and includes a focus on addressing behaviours by which children put themselves at risk.
I have found the hon. Lady’s remarks helpful. There is little to disagree with. Having listened to her, I am no less convinced that this issue, like that of missing children and child sexual exploitation in general, is one where greater co-operation and collaboration between all the agencies involved is vital. I am dedicated to promoting that. I recognise her concerns about sexting; we know from a recent Beat Bullying report that more and more children and young people are receiving sexually explicit texts or e-mails and offensive sexual images and that a high percentage of them know the identity of the aggressors, the majority of whom are their peers.
I agree wholeheartedly with what the hon. Lady said about the criminalisation of children. A child may be committing a criminal offence if they share photographs of the type in question, but they would not be automatically criminalised. The prosecuting authorities would take the circumstances of each case into account, including in particular the nature of the photographs, the age and maturity of the children involved and any evidence of coercion or exploitation. However, if a person is over 16 and is sending a picture of someone who is under the age of 16, they are breaking the law and will be prosecuted on that basis.
Generally, internet service providers take a responsible approach to the content they host, both of their own volition and in co-operation with law enforcement and Government agencies. Where the industry is advised that the content it hosts in the UK contravenes legislation, it will readily remove it. We need to do more to ensure that it is more immediately removed. There is a clear line of communication between the offended party—parents or others—who sees this material and the people with responsibility for controlling and eliminating it.
The Child Exploitation and Online Protection Centre has, through its education awareness and skills work stream, developed a specific educational resource to tackle this very issue. The hon. Lady mentioned this resource, which is for use in the classroom by teachers and forms part of CEOP’s Thinkuknow campaign. This is designed to reduce the harm caused to children through the misuse of technology to sexually abuse or exploit them. The resource includes the video “Exposed”, a 10-minute drama dealing with sexting and cyber-bullying designed for 14 to 18-year-olds. Its messages include, “Always think before you send or share. Think about how it will affect others and yourself. Remember that pictures you take and send may become public and permanent and the police may get involved.” Once something is on the internet, it may be there indefinitely. It may come back to haunt the person involved.
The messages continue, “If you need someone to talk to, you can call ChildLine.” I take the hon. Lady’s point about the importance of some of our helplines, especially ChildLine, in which the Government invest a lot of taxpayers’ money. There is also the opportunity for commercial companies to make their contribution, which will be greatly welcomed—The messages continue, whether with or without tax relief is another matter. “Thinkuknow and the Safer Internet Centre can also offer tips and advice. If you need to make a report, report directly to ClickCeop.”
The UK Council on Child Internet Safety, which I co-chair, works to improve the awareness and understanding of parents, children and teachers regarding online safety. That includes educating children and young people about the implications of their online behaviour and the digital footprint that they leave, particularly where information or images of an extremely personal nature are concerned.
Important work was undertaken earlier this year: CEOP led in the creation of UKCCIS advice. That advice is designed for use by those who provide internet services used by children, for example Facebook and Microsoft. The advice has a section on sharing information, which explains the impact that sharing an image can have, such as losing control and ownership of it. Organisations such as Facebook and Microsoft, which are engaged with UKCCIS, ensure that the messages that they carry on their services are in line with this advice, so that whichever service young people use, they receive clear and consistent messages about positive online behaviour and what to do if they need help.
Ofcom’s children’s media literacy tracker data reveal that one third of children aged between 12 and 15 have a smartphone that can access the internet; and 38% of nine to 12-year-olds have a social networking profile. People know that to have a Facebook page, a child must be at least 13, but that cannot be legally enforced. We know—and I know from personal experience—that younger children are tempted to set up a Facebook site and get involved with social media. I also know that in too many cases they do that aided and abetted by parents. It is not just a question of giving the information to parents, but making sure that parents are acting responsibly on behalf of their children. That is why education is such a joined-up exercise. To educate the parents, we need to say, “Would you really want your child having access to this sort of dangerous content or the ability to be the victim of sexting and other such things?” We also need to teach children at school and at other places about the hazards of all this and ensure that teachers are fully engaged, too.
UKCCIS is aware that children are using the internet at an earlier age and that the internet is increasingly mobile. Children use their mobile phones not only to text but to access the internet and social networks. Mobiles are a particular focus of current UKCCIS work.
Later today, I am chairing a round-table meeting of mobile phone manufacturers, retailers, network operators and software manufacturers to discuss how they can offer better parental controls and choices to parents and give clear online safety information to parents and children. Good practice is happening already. I have here a selection of leaflets that are issued by some of the mobile operators and retailers, and I want to see more of this. I want them to be more child and parent-friendly, and for them to be standard and unavoidably attached to mobile phones before they are switched on. That is not rocket science. We are moving in the right direction, but I want it to move faster and in a more comprehensive manner.
The mobile phone sector is aware of the need to signpost to ChildLine if a child is upset. For example, Carphone Warehouse has a leaflet about safe internet use that is given to parents. It includes reference to sexting and signposts to ChildLine. Everything Everywhere has produced an internet safety leaflet distributed via Orange. “Orange, a guide for parents” warns against sending bullying images. More is also being done to encourage retail environments to highlight internet safety issues: Tesco is looking to train phone shop staff; Dixons carries internet safety messages on receipt wallets; and John Lewis is also engaged in this area.
On the board of UKCCIS are BT, 02, BlackBerry and Samsung. None the less, I agree that there is scope for stepping up our efforts through UKCCIS to encourage mobile phone operators and the retail industry to play a greater part in publicising the dangers of sexting. The hon. Lady mentioned the idea of having adverts, which is a perfectly reasonable way of communicating that message. I will use many of her points to challenge the people at the round-table discussion later today and will happily report back to her later.
I am clear that more can and should be done to address this issue and to educate our children about the risks they face if they get involved in or receive this type of communication. Work continues across the Government and national and local agencies to improve and ensure that our response is robust, and that includes more generally on tackling child sexual exploitation. At the local level, agencies who work with children and young people need to be aware of the signs that show that young people are being groomed for sexual exploitation and to know how to intervene in an appropriate way. Such agencies include the police, children’s services, parents and voluntary groups. The hon. Lady mentioned the local safeguarding children’s boards, and yes, this issue should be on their radar as well as other safeguarding against sexual exploitation issues.
At the national level, I am taking the Government lead on tackling child sexual exploitation. I have led in the development of an action plan to safeguard children and young people caught up in this form of child abuse, and the hon. Lady has been a part of that, for which I am grateful.
I hope that I have provided some reassurance that the Government are absolutely committed to protecting children and to tackling the challenges in this area. We are not complacent and recognise that we need to keep under review all aspects of our work to tackle grooming in all its forms. We are all determined to do everything we can to protect children in our communities, while allowing them space and room to develop and enjoy technologies in safe and responsible ways.
I repeat my thanks to the hon. Lady for securing this debate, for further raising the profile of the issue and for her ongoing helpful and constructive engagement with me and the Government to promote the common goal of ensuring that all our children are safer online.
Mayoral Referendums
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Martin Vickers (Cleethorpes) (Con)
It is a pleasure to take part in this debate under your chairmanship, Mrs Main. On looking around this Chamber, I note many familiar faces from a previous debate that took place here in October 2010, when my hon. Friend the Member for Carlisle (John Stevenson) initiated a similar discussion. Things have moved on significantly from that point. I support the Government’s policy to initiate referendums in 10 of our cities, and I also commend Liverpool council for taking the plunge and deciding for itself that elected mayors are the future form of leadership. That is certainly the case for our major cities, and I hope it will be for many more of our local authorities, starting with those currently enjoying unitary status. This must be just the beginning.
By way of background, I should say that I come to the debate as someone who served for 26 years as a councillor. I served for 14 years under the two-tier system when, between 1980 and 1994, I was a member of the former Great Grimsby borough council. At that point, the electorate decided that I needed a rest. I think it was something to do with describing myself as the Conservative candidate that resulted in my enforced absence from the council chamber for five years. At that time, the party was going through a period that comes to all parties: that of unpopularity. Such a time almost always follows a long period in power. Labour Members will know exactly what I mean, as many of their own councillors have gone through a similar process in recent years.
When I returned to council, thankfully, the two-tier system had been swept away. In my area, that had the added bonus of doing away with the unloved—and I would perhaps go as far as to say hated—county of Humberside. How much better the unitary system is. I would create unitary councils headed by elected mayors across the board, but because I support the localist agenda, I would leave councils free to determine the powers they want to give their mayor within a menu set by legislation.
I accept there are geographical difficulties in some of our larger and more rural areas, in the sense that it is more difficult for individuals to become local personalities when a county is 70 or 80 miles wide. In my county, Lincolnshire county council covers the distance from, for example, Gainsborough in the north to Spalding in the south, which is some 70 miles. That presents difficulties in what is inevitably a presidential-style contest where party labels mean less. However, at a time when—let us be honest—the profession of politician is not the highest ranked in the country, that is just one of the plus factors. More independent-minded individuals without that party label may well emerge; or, indeed, there may be individuals with a party label who have a much more independent streak. One has only to look at the current mayoral race in London to appreciate that, although party allegiance is there to indicate to the voter the general direction of travel, it is a far looser allegiance than in a traditional council election.
We cannot wait for local authorities themselves to decide whether to opt for an elected mayor, as, with perhaps a few rare exceptions, they will not. We need to break down the existing cosy arrangements. Many councils will not even opt for a referendum and let their voters decide.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Gentleman is outlining some of the plus points, and I congratulate him on his success in obtaining the debate. The concept of directly elected mayors has been around for some time. Can he explain why, in most of the mayoral referendums, the turnouts have been fairly derisory—in some cases, they have been down to 15% to 20%—and why the majority of those who did participate voted against the concept?
Martin Vickers
I thank the hon. Gentleman for that intervention. I accept the fact that turnouts have been low—that is an inevitable consequence. The simple fact is that it is a rather techy, anoraky subject in which we politicians, but perhaps few others, love to engage. However, democracy is about having the opportunity to participate in the process. The public are at liberty to engage, or not.
Charlotte Leslie (Bristol North West) (Con)
Does my hon. Friend agree that, in many cases, the difficulty in getting people engaged in the mayoral political debate is testament to the kind of political disengagement that has arisen from a council system that people do not feel has served them? In Bristol, we are struggling with voter apathy because people do not feel that the political system is serving them well and they are fed up with party politics. That disengagement is in itself testament to the need for a mayor.
Martin Vickers
I fully endorse what my hon. Friend says. I hope to expand on some of those points in the next few minutes.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Before the hon. Gentleman moves on from the question of why we should have referendums and the issue of engagement, does he share my puzzlement that on something as real as a mayor, we have a referendum, yet something as unreal and obscure as police commissioners is imposed on us?
Martin Vickers
To be honest, I would have mayors imposed on councils. As I have said, the best form of local government is single-tier authorities headed by an elected mayor. I also favour more directly elected positions within society and fully support the introduction of elected police commissioners.
Returning to my point about councils not choosing to go down this road voluntarily, I would not go as far as Simon Jenkins who said in last week’s Guardian that mayors would replace “shadowy civic mafias.” I also do not agree with him that cities have been held back by party complacency. That may well be true in some cases, but to blame political parties per se is simply wrong. I would argue that bureaucracy and regulation at a national and EU level has had a lot to do with it. Bearing in mind Sir Simon’s recent engagement in arguments about the planning system, I would say that that system itself has something to answer for—at least until the Minister with responsibility for planning, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), got to grips with it.
I entirely agree with other parts of Simon Jenkins’ article. He states:
“the London mandate secured more cash for police and transport and spattered central London with lofty towers.”
I am not so sure about that one, but he goes on to state:
“In the past four years…Boris Johnson has subsidised cycling and dug up every road. Like them or loathe them, these men have put city politics on the map. Hustings are packed. London’s civic life has never been so vibrant.”
In some respects, the campaign might not have been all that edifying, but it has certainly grabbed the interest of far more voters than a traditional council election.
It is the political process that energises and gives direction to our system of governance, whether at a national or local level. However, we can do better. We can transform politics by introducing more direct elections. Yes, many of those will be personality contests like the Boris versus Ken show. Whether we like it or not, personalities have always played a major role in politics, and leadership, in part, results from the individual personality of the person. However, from the public’s point of view, that is exactly what should happen. As I say, we must sweep away the existing cosy arrangements.
The petition threshold of 5% that is needed for the electorate to trigger a referendum is too large. If we support localism, as we all purport to, it should be made easier for voters to initiate the process. Obtaining the support of 5% of the people does not sound like a big deal—until one gets out on the streets to try to secure those genuine signatures. In the two unitary authorities that serve my constituency, that equates to more than 6,000 signatures. I can tell hon. Members that getting that number is extremely difficult. About 10 years ago I tried to do so, but local circumstances changed and the momentum was lost.
We need to reduce that threshold significantly. Councils should still have the opportunity to initiate a referendum, but we need to make it much easier for the public. Much is made of the potential downsides of having elected mayors, such as the possibility that extremists will be elected. On the whole, the British people are rather moderate in their political views. On occasion, they may elect an eccentric—some would argue that anyone who enters the political arena qualifies as being eccentric—but there is no real evidence that extremists would be elected. Electing an eccentric might seem rather British; electing an extremist is very un-British.
I welcome the fact that we have 10 referendums taking place next week in some of our major cities. That is a start, but as I have said, let us not restrict them to cities. My constituency straddles two unitary authorities, with two wards in North Lincolnshire and a larger part in North East Lincolnshire. There are three main areas of population: Immingham and Cleethorpes in my constituency; and Great Grimsby, a self-contained former borough seat soon to expand into Cleethorpes if the Boundary Commission gets its way, much to the horror of the locals.
As the Minister found out when he paid his first visit there a few weeks ago, Grimsby and Cleethorpes are joined at the hip, or certainly at the Park street border where we position sentries alongside the passport control barriers. More seriously, they are in effect one town, though with distinct identities. It is these provincial towns such as Grimsby and Cleethorpes, and many others—Huddersfield, Halifax and Scunthorpe, to name but a few—that are at risk of being left behind if we concentrate too much on cities. Cleethorpes, Grimsby and similar towns think that big cities get far more than their fair share as it is. We would like another advocate for our communities. Perhaps elected mayors in provincial areas, working in tandem with Members of Parliament, would be more of a thorn in the side of Governments of whatever complexion than a council leader. We must hope that that would be beneficial to such local communities. If, as is the case, the Government believe that elected mayors are desirable, then I say to them: get on with it and do not dawdle. Make it easier for my constituents and others to initiate the process of a referendum and let us see what the people think. I suspect that in many areas, particularly with a local push, they would go for it.
Of course, local councillors are not over-keen. It is a potential threat, a step into the unknown, and it introduces an element of uncertainty into the often predictable world where Labour win when there is a Tory Government and the Tories win when there is a Labour Government. But I say to them: take up the challenge. After all, many candidates for mayor will come from the ranks of existing councillors. I can think of half a dozen or so in my constituency who would be real contenders for the position.
Elected mayors would not be drawn just from the ranks of our existing politicians; representatives of the voluntary sector, business leaders, trade unionists and many more would be drawn in. The attraction of an executive position will have far more appeal to more people than the traditional role of a councillor. We need more individuals to become involved with our local parties, so that they can be considered for candidacy. Open primaries would help to bring more people into the process of selecting candidates. Too often, selection is by a small group—I know, as I have been one of them. Whatever can be said in its favour, it is certainly not open and transparent.
As I have said, we need to reduce dramatically the threshold for initiating a referendum. Let us put real power back into the hands of local people and make it much easier for the population at large to kick-start that referendum. In no way do I wish to play down the role of the traditional councillor—I would not have stuck at it for 26 years otherwise. There will still be an important job to do. Individual wards and communities need their advocates to argue not just in favour of things, but against them, too. With neighbourhood plans to produce and the opportunity for elected members to work more closely with our voluntary and charitable groups, churches and others, public satisfaction would increase.
Importantly, executive mayors need effective scrutiny. Scrutiny in its present form does not work, as I think many who have served on local authorities would agree. It is not sufficiently detached from the decision-making process. Scrutiny is seen as a necessary evil by any administration. Even when serviced by able officers, they will almost certainly be junior to the senior managers who are involved in the decision-making process. I have previously proposed that local authorities need an officer at director level who is not a part of the established service, but who is appointed by, and responsible to, a group of chairmen of scrutiny panels.
I digress. To return to my main theme, mayors can be passionate advocates for economic investment, but equally they can be powerful voices against developments that their local communities oppose. That allows me to put forward the thought that, although I favour unitary authorities headed by an elected mayor, that does not preclude smaller towns in that authority area having their own elected head. I know that my hon. Friend the Member for Penrith and The Border (Rory Stewart) favours that and will no doubt speak on it in a few minutes. Currently, in effect we have a two-tier mayoral system in parts of London, so we should not rule it out elsewhere. The elected mayors in London seem to rub along with the Borises and Kens of this world reasonably well. There will be tensions, of course, and these changes will alter the dynamics between various councils and individuals, just as another constitutional change that I favour, an elected House of Lords, will change the dynamics between the upper and lower Houses.
I will now expand on what I see as the key functions of the mayor. I mentioned economic development and regeneration earlier, and they are certainly vital ingredients. Infrastructure and transport are essential. They are all part of a growing local economy. What is certainly essential is forceful political leadership—someone in charge. As MPs, we are all well aware that we live in a global economy. Business leaders travel from all over the world to consider investment decisions. In many of our overseas competitor towns and cities, they can meet with the top man or woman because they can be decisive and offer clear direction. Here, it is somewhat different—our decision-making process is often tortuous. Our mayors could be as decisive.
John Stevenson (Carlisle) (Con)
Does my hon. Friend agree that it is incumbent on central Government to decentralise further powers to the local authorities, particularly to elected mayors?
Martin Vickers
Yes, I favour my hon. Friend’s suggestion. The process of devolution and localism has only just started, and has a long way to go.
I note that those trying to undermine the elected mayor project have been saying that not enough high-profile potential candidates have come forward. That is perfectly understandable, until we know the outcome of the various votes next week.
Stephen McPartland (Stevenage) (Con)
Does my hon. Friend agree that one of the alleged reasons why high-calibre candidates have not come forward so far is a lack of control over budgets—that they want some kind of budgetary responsibility before they put themselves in that position?
Martin Vickers
I agree. My understanding, from the speeches I have heard the Minister make, is that where we are is only the starting point and there is much further to go. It is understandable that some of the high-profile candidates have not yet come forward. The example of police and crime commissioners seems to indicate that once these positions become a reality, people do come forward. In my own police area of Humberside, the former Deputy Prime Minister, no less, has indicated that he hopes to be a candidate. Had a referendum for the post of elected mayor of Hull been approved, he may even have gone for what I suggest would be an even higher profile local position.
I do not know how many yes votes will be recorded next week, but even just one will be a step in the right direction. The momentum is with those of us who believe that elected mayors can provide a more determined and dynamic leadership, not because the individuals are better than the many hard-working council leaders, but because the position of mayor will be more prominent and will provide a better platform to give the leadership our towns and cities require in a competitive environment.
Two or three weeks ago, the Prime Minister gave a boost to the campaign with a reception in Downing street. On that occasion, I detected a real buzz about the place, not just from enthusiastic politicians such as myself—the Minister and other hon. Members were present and were equally enthusiastic—but, more noticeably, from the leaders of our business communities. Significantly, the Prime Minister announced that there would be a new mayors’ cabinet, giving mayors better access to Government and the first choice of many funding streams and regeneration initiatives.
Turning to a few comments that I noted from other hon. Members, the Centre for Cities has argued that, although they are no panacea for growth, elected mayors have the potential to support economic growth if they are given the right powers to do so. The 3 May elections are focusing only on local authority mayors, although in reality, as Greater Manchester has recognised, a city’s economy is not restricted by political borders.
Wilson and Game, in their assessment in their book, “Local Government in the United Kingdom” noted that mayors
“may be few in number, but most, if not all, of these elected mayors have, in their own council areas, undoubtedly ‘made a difference’. They are far better known than their predecessor council leaders ever were; they have raised their councils’ profiles, and in several cases stimulated a change in their political complexion; and most are associated with a number of personal policy initiatives and campaigns.”
I am sure the Minister will take the opportunity that this debate offers to urge yes votes. It might be an exaggeration to say that this will be a new dawn for local politics—when politicians use such phrases, it is usually hyperbole—but it is certain that elected mayors are a step in the right direction. I hope that voters in our cities will vote yes, and that there will be a lot more yes votes to follow.
Mr Bob Ainsworth (Coventry North East) (Lab)
It is a great pleasure to follow the hon. Member for Cleethorpes (Martin Vickers). I agree with an awful lot of what he said. However, I most certainly disagree with the most high-profile thing that he said about the Prime Minister’s advocacy. I do not want the Prime Minister to come to Coventry to advocate for an elected mayor. That would not go down nearly as well as it might in the hon. Gentleman’s constituency.
I cannot boast 26 years in local government as the hon. Gentleman can, but I did eight years as a member of Coventry city council before being elected to this place. It has long been my view—after about a year of settling in and getting to understand how the system worked, I became pretty disillusioned with it—that I do not believe that it works. I do not believe that it can be made to work.
In 2001, Labour proposed elected mayors. We set up a system that all hon. Members in this Chamber will know allowed for a petition to be raised, as the hon. Gentleman mentioned, to get a referendum. Not many petitions have been raised. If I believed that the reason for those petitions not being raised over that intervening period was a high level of satisfaction with the current system and that nobody really wanted change, I assure the House that my support for the mayoral model would have waned considerably. However, the petitions have not been raised because we face, as the hon. Member for Bristol North West (Charlotte Leslie) said earlier, almost total apathy in respect of local government. We do not have—we do not enjoy—local democracy in England at all; it does not exist.
On 3 May, a third of the people of Coventry will vote, and they will do so almost overwhelmingly on national issues, not local issues. Political parties and councillors know and understand that. Indeed, I have not studied the Conservative leaflets in Coventry—if they have been put out at all—but my own party’s leaflets cover police and NHS cuts, overwhelmingly. Why? We know that that is how to appeal to the electorate, and we want to win. This is not about council services, development of the manifesto locally or about what the council is or is not going to do. The product of that is a massive increase in apathy about local democracy, the potential for local leadership and the important services that councils provide.
There is also an impact on councillors. In what other walk of life would we consider it good and acceptable—something that we ought to continue with—to have a system where people know that their policies, credible or incredible, make no difference to their success. However, local government elections can be affected organisationally; we have all done it and participated in it.
Councillors and councils fall or stand on the national trend. Councillors know that. In 2004, the Labour party lost control of Coventry city council, not because we as a party lost control of it or because it was a bad council, but because in that year the then Prime Minister, Tony Blair, was somewhat unpopular in the country. It was as simple as that. We wound up with a Conservative council for six years, which fell in 2010, in large part because the local election was on the same day as the general election and, in an overwhelmingly Labour city, the turnout was well up and the Conservative council was swept away as a result. I do not think that that was a particularly good council—it was worthy of considerable criticism—but it knew, and we knew, that it would lose an election called on 6 May 2010.
Mr John Leech (Manchester, Withington) (LD)
Does the right hon. Gentleman agree that support for local government and more interest in local politics would be helped by never having local elections on the same day as a general election?
Mr Ainsworth
I have not thought about that and I am not dead sure about the degree to which it would, but having a mayoral system in our cities—like the hon. Gentleman, I would be interested in the proposition going further than just in cities—would provide some mitigation against the domination of national politics in local affairs. Of course, the national trend would still have an effect; to suggest that it would disappear entirely would be naive.
On the suggestion about replacing local politics with independents, I am sure that we all know people from our parties who share our beliefs but choose to cover their colours in particular parts of the country, because they know that if they wear their rosette and show their colours they will not get elected. Therefore, they stand as independents. That is, to a degree, dishonest.
A mayoral system, such as we are seeing in London and will see elsewhere, would force people to think well beyond the allegiances of their own political party and about the city as a whole: Coventry, for example. That would give people at least a degree of ability to buck the national trend. People would be, to a greater extent than exists at the moment, genuinely accountable to their local populations, surviving on their own abilities, popularity and the policies that they pursued and, therefore, their ability, to some degree only, to get themselves re-elected off the back of their own policies.
The mayoral system would bring those benefits and the potential for leadership. In saying that, I do not denigrate councillors. Many people dedicate themselves to local government over the years, toiling away, trying to make their cities and communities better places for little remuneration, but they are largely—it is not their own fault—unknown within the communities that they represent. Walking the streets of Coventry, the majority of people do not know who the leader of the council is. That is not the fault of the leader of the council. The Conservative leader of the council for six years, up to 2010, was largely unknown as well. The system prevents them from being able to give the leadership that is so necessary in the modern world.
Those of us who have been lucky enough over the years to travel and to mix and converse with leaders of cities in other countries, know that in many countries—those with which we have to compete—there is a far higher degree of self-reliance. People in cities in Germany do not look in much degree to Berlin, or even to Stuttgart or Munich, for leadership. There is a lot of leadership and a lot more powers in the city itself and, as a result, those cities are more successful.
None of the democratic deficit that I have been talking about, however, matters much to our constituents if it does not make a difference.
Charlotte Leslie
Does the right hon. Gentleman agree that continuity of leadership is important? In a city such as Bristol, where the council changes colours frequently, there has been a number of council leaders over the past 10 years. Recognising the council leaders is even more difficult, because they change so often, and that makes the long-term, strategic vision for an area far more difficult.
Mr Ainsworth
I am not so sure that I do agree. There are communities that are far more settled—there is more community in existence—and where people will be better known, although in many of our cities that is certainly not the case, because there is a turnover of population and a loss of community. It almost does not matter how long some individuals toil away at leading their city, the majority of the population probably do not know who they are.
I was about to move on to the potential benefits of bridging the democratic deficit, because none of it matters greatly to the majority of the people of this country or to the electorate in such places if it is not making a difference. Irrespective of our political views, how many of us believe that our cities are doing as well as they could? None of us believes that, so we ought to be looking for some improvement, not only for democratic reasons but for economic regeneration and performance.
Coventry, the city in which I was born and raised, is the most central city in England; we have excellent transport links, rail and road, to every corner of the country; we enjoy a pleasant environment for the city—the Warwickshire countryside is second to none—and we have an enterprising population. Why therefore are we not doing better than we are? With leadership, we could be doing that little bit better and be pushing that little bit harder. To return to the issue of democracy, in Coventry we would probably be demanding—with credibility—increased powers to be able to lead the city. In recent years, the people of London have managed to get from central Government increased powers over their own local government, under both Ken and Boris. The people of Scotland and Wales have managed the same, but otherwise our local government is so weak in comparison with Whitehall and Westminster that it has been unable to get the powers that it needs to represent properly its constituencies and communities, which deserve so much.
With a mayoral system, over time, local government would get those powers. I know all the arguments about not much being on offer, but that is not how things work. When we set up the London Mayor, there were far fewer powers than now, but the Mayors have been back to the well and asked for more water, as have Scotland and Wales. Would not powerful mayors in English cities ask for exactly the same? They would, and they would be in a far better position to get it.
Mayors would be a big improvement in how cities are run and in how the country is run. Think of the benefit of powerful people from the provinces—from Bristol, from Leeds—talking to this place from outside London and saying, irrespective of party, “Oi, mate! That ain’t how it works in the real world.” They would be listened to. I am afraid that I do not know who the leader of Leeds is, or of Bristol, although I know the leader of Coventry and who the mayor of Leicester is, but if someone like me, steeped in politics, does not know who the leaders of our great cities are, that is an indication that local government is not punching its weight in our country.
Lilian Greenwood (Nottingham South) (Lab)
My right hon. Friend is making an interesting argument about giving cities more powers. However, in London, the Mayor represents 32 local authorities, which is very different from a city such as Nottingham, which is too small to take on those extra powers. The opportunity should be on offer for city regions, rather than single local authorities.
Mr Ainsworth
My own party played with the idea of city regions when we were in power. We thought seriously about them, and they might work in some areas. I do not come from Greater Manchester, but my impression is that that area is a real entity. If so, a metro-mayor or whatever for Greater Manchester might make a lot of sense. The west midlands, however, is not such an area. The proposition that we were toying with was a city region from Telford in the west to Coventry in the east—some 50-odd miles—which is not a real community.
I agree with the hon. Member for Cleethorpes: we should build institutions on real communities—existing, recognisable ones that people already see themselves as part of and buy into—and give them the necessary and relevant powers. Let us have some real local government, not an imposed London template; let us look from the bottom up and not from the top down. What is Coventry capable of doing on its own? Let us empower Coventry to do those things on its own, and if Birmingham is capable of a different set of things, let us empower Birmingham to do those different things. Let us stop thinking from the top and start thinking from the bottom, if we want a revival of our democracy and the potential help to our economy.
Finally, from the point of view of my own little city of Coventry, I fear that, with Leicester already having a mayor, if Birmingham has one and we do not, we will lose a relevant voice and a say. I do not want my city to be any less influential than it is—quite the reverse.
Mrs Anne Main (in the Chair)
Before I call the next speaker, I remind those trying to catch my eye that I will be calling the Front Benchers from 3.40 pm.
Rory Stewart (Penrith and The Border) (Con)
I pay great tribute to my hon. Friend the Member for Cleethorpes (Martin Vickers) and, in fact, to the three Cs showing the common sense at the heart of local government: Cleethorpes, Coventry and my hon. Friend the Member for Carlisle (John Stevenson).
It is a great privilege to be in the Chamber today, because the debate shows why local government matters. The reason why the debate is good is that it is one of those rare occasions in the House of Commons when one feels that people know what they are talking about. Often in the Chamber of the House, I wonder where the expertise is. In Westminster Hall today, we have more than 20 years’ expertise and all the speakers are talking about something that matters to them and that they know about. That is why we should all support local government, more local government and still more local government.
The past 120 years have seen an astonishing destruction of British local government, resulting in the situation that all of us see day to day in our surgeries: the great sense of ennui. The right hon. Member for Coventry North East (Mr Ainsworth) referred to the anonymity of councillors—the sense that people do not know to whom to speak. We continually encounter citizens’ frustration with the system and their terrible feeling that at any moment, some regulation, law or arbitrary directive from an anonymous and unseen official will get in the way of what they want. Whether it is the imposition of a supermarket on a town where nobody wants it, the imposition of a wind turbine on a valley where nobody wants it or the closure of a care home, a community hospital or a school, local communities show again and again that they are desperate to express their desires, but they have no way of doing so.
That, of course, brings local communities to their Members of Parliament, and a great thing that is for us, as Members of Parliament, because we enjoy it enormously; it takes us away from the strange, arbitrary abstractions of the House of Commons and gives us something useful and practical to do. From a selfish point of view, we are grateful that we can deal with such local issues, which are more real than the issues we deal with in the House of Commons most of the time. However, we should not be dealing with such things, which should not, ultimately, rest with the House of Commons. It would be better for us, local communities and Britain, if we located such issues with a directly elected local mayor.
That is true partly because Britain and British identity have changed. Britain is no longer obsessed with projecting national power. The fact that we are, for some bizarre reason, completely obsessed with Scandinavia —watching Danish television or looking earnestly at Finland, wondering whether its educational statistics are better than ours—shows that this country is increasingly interested with the local, not with the projection of grand power.
We are therefore interested in making things work well for our own intimate communities, and we have astonishing skills when it comes to delivering such things—skills that did not exist 120 years ago. However much we grumble about education, this country is far more deeply educated, healthy and engaged than it has ever been, and we see that in our performance at local level. Everybody in this room will see the most astonishing things being done in their local communities. In Cumbria, for example, we have seen the creation of affordable housing in Crosby Ravensworth driven entirely by the local community. We have also seen something similar on broadband, and we are now getting fibre-optic cables to the most remote valleys in the whole of England. After perhaps 1,000 hours’ work, communities are signing up 80% of the people in them for broadband, waiving wayleaves and working out how to dig the trenches for the fibre-optic cables.
However, we are not going far enough, and we could do much more. The sad truth behind a lot of these stories is that, in the absence of a local champion, things are not working as quickly or as well as they should. To take the example of broadband, officials are still telling us, despite all the work that local communities have done, that state aid regulations and procurement complications are delaying projects, so they will take 12 months longer than they need to. Communities are being slapped in the face, and despite putting in all that work and energy, they are not getting what they should at the end.
All over the world, we see models showing why local government works. We see them not just in Germany, which the right hon. Member for Coventry North East mentioned, but in France, in places such as Montpellier and Lyons. Thirty years ago those were depressing places, but under strong local leadership they are now splendid places. That is not because they have more money, but because the people controlling the money are located in Montpellier and Lyons, not Paris, and understand local needs and local imaginations.
We can also see these things in Scotland. Alex Salmond’s biggest mistake is to believe that his performance is an argument for independence; it is not—it is an argument in favour of decentralisation. Everything that has gone well in Scotland over the past decade has happened because of the tapping of local energies within a national context, which is the precise balance we want. We must use the strengths of a vast country and a vast economy. This country is no Denmark or Norway—it is Great Britain, and our economy is 12 times the size of those countries’. We have sterling, we have our Foreign Office and we have our Army, and within that national context, local things can be done well. That is what the Scottish National party—at its best, when it understands these things—shows locally, not through a push for independence but through a push for autonomy.
Why do we want local mayors? They will harness and tap local energy and the educated, healthy, dynamic population we have created over decades. They will be able to use local knowledge and to understand local issues. In London, I have a big problem explaining exactly what is happening with broadband in Mallerstang, in Cumbria, because it involves complicated local questions. If I take the issue to a Minister, the civil servant will whack it back and say, “No, no, it’s much more complicated than that. There are big issues about state aid and procurement.” It is difficult to get such things across. We therefore need somebody who uses local knowledge.
Finally, we need somebody who uses local trust. Elected local mayors are a way of rebuilding not just local democracy but national democracy. If we can tap the new British genius for the local, create a connection between citizens and elected local mayors and restore faith in politics at the most local level—the politics of the city-state, where every citizen confronts their representative on the street, lives through the practical problems and decisions of politics and understands the messy compromises, the courage and the idealism of politics in their market square—we have a hope of restoring faith in not only the local, but the national.
Mr John Leech (Manchester, Withington) (LD)
It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Cleethorpes (Martin Vickers) on securing this important debate.
I want to take part in the debate mainly because my home city of Manchester is one of the local authorities that will hold a referendum on local election day next week. I should start by laying my cards on the table and saying that I have never been a supporter of elected mayors, but if the people of Manchester vote for a mayor next week, I will not lose any sleep over it, because the issue is not massively important to me or people in Manchester. Indeed, apathy has been the big winner so far.
I certainly do not object to holding a referendum on whether local people want an elected mayor, but the nature of mayoral elections means they always end up being about personalities, rather than politics. London is a good example, and the debates going on at the moment clearly show that the issue is personalities, not politics. The debate is not about the merits or otherwise of the policies put forward by the two front-runners, but about whether people dislike the fact that Ken Livingstone has not paid his taxes or think that Boris Johnson should have come home early when the riots started. Transport and other issues that should be debated have fallen by the wayside while people look at the personalities of the two front-runners.
There is a question about whether we should force local authorities to have a referendum against their will, given that plenty are considering going down that route or have already gone down it. In Salford, for instance, local residents triggered a referendum, and an election is taking place next week for a mayor. That said, only 18.1% of the 171,000 eligible voters took part in the referendum. None the less, there was a comfortable majority in support of having a mayor. I rather suspect that the turnout in Manchester will be significantly higher than 18.1%, but only because the vote will be on the same day as the local elections. People will want to participate in the local election, rather than the referendum for an elected mayor, so I seriously doubt whether the higher turnout will mean there is more interest in the mayoral referendum or the idea of having an elected mayor; that will not be what pushes people to take part in next Thursday’s election. Certainly, in my experience of knocking on many doors during the election campaign of the past few weeks, I have not seen massive enthusiasm for the referendum. In fact, only one person has raised the issue with me on the doorstep, and that was someone who simply wanted to know my view. She had no particular view, and was not even sure whether she would vote in the referendum.
Lilian Greenwood
The hon. Gentleman’s experience is similar to mine. Does he think that part of the reason is, first, that the Government have not made it clear what extra powers are available, and secondly that they have not consulted local people about the geographic cover needed to reflect what the local community is, and have instead imposed a Whitehall-led model on our core cities?
Mr Leech
There are several reasons for lack of enthusiasm. I suspect that in Manchester it is partly to do with the fact that the political parties are concentrating more on the local elections than on trying to force people out to vote in the referendum. I shall come on to that, but I do not believe that we should have the referendum on the same day as the local election. I think that the crux of the problem is that we are not giving people the opportunity to debate the mayoral referendum, because there are other issues that they want to discuss. People are interested in who will be their local councillor—not in whether we shall have an elected mayor for the city of Manchester.
I understand the Government’s argument for holding the referendum on the same day as the local elections, because clearly that saves an awful lot of money.
Ms Gisela Stuart
I want to endorse what the hon. Gentleman said. It is extraordinary that when there are issues that divide political parties—whether alternative vote, or, as now, the mayor—as polling day gets closer, the political parties focus on getting their councillors elected, and there is no debate on the issue. With hindsight, the Minister may want to reflect that, if there are referendums that do not fall along party political lines, combining them with party political elections is not a good idea.
Mr Leech
The hon. Lady makes a fair point, and I have always argued that we should keep individual elections separate—whether local, general or European—so that we can at least try to focus people’s attention on the issues on which they are being asked to have an opinion.
If elected mayors are so worth while—enough to hold a referendum on them—should not we have ensured that we could engage in proper debate, by putting the referendums on separate days? Then the community could have a real debate on the issues, and the merits or otherwise of an elected mayor, instead of seeing it as a bit of an afterthought, which is how it is being viewed in Manchester.
Having said that I am not a fan of elected mayors, I accept that they can be successful. A lot will depend on the calibre of the candidates and the person elected. Because there will be a mayor in Salford, if Manchester votes no that will be a great opportunity for Salford, which will be the only local authority in the area with a mayor. That mayor will be able to raise Salford’s profile. I mean no disrespect to Salford, but it has for many years played second fiddle to Manchester, which is seen as the big city. The danger is that if Manchester votes yes, and we end up with a Manchester mayor, the Salford mayor will become peripheral to the Manchester mayor, who may be a famous person or celebrity, or a high-profile politician, and seem significantly more important than the mayor of Salford. I stress that I am not trying to show disrespect to Salford, but generally Manchester has a high profile and Salford does not.
In my view, if Manchester is going to hold a referendum on a mayor, it would be better if the question was on a mayor for Greater Manchester—a point that was made by the hon. Member for Nottingham South (Lilian Greenwood). There are two reasons for that: first, it would have fitted far better into the model of the joint authority between the 10 Manchester local authorities; secondly, it would have avoided the prospect of a Manchester mayor trumping the mayor of any other local authority and being seen as more significant than the mayors of other local authorities. In future, if we are to have mayors, we should consider the most appropriate area that should be covered. We should not think of basic, single local authorities, but consider what would be best for the area. In Manchester that would probably be Greater Manchester; in the Coventry area it would be Coventry; but it would be different in different parts of the country, depending on the make-up of local authorities.
Mrs Anne Main (in the Chair)
Order. There are two hon. Members who want to catch my eye, and 15 minutes left. I hope that they will bear that in mind when they take interventions.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I shall concentrate on points that have not been covered yet in the debate, Mrs Main.
Anyone who visits my constituency will see a large, red brick clock tower, affectionately referred to as Old Joe, which is a reference to Joe Chamberlain, who was said to make the weather. That was a reference to the fact that he was, in the 1870s, a ceremonial mayor, but turned himself within three years into the effective Prime Minister of Birmingham. Any decent mayor will make the weather and take on powers, rather than use what central Government give. However, a word of caution is needed: if powers are given without resources, those concerned may acquire responsibilities that they cannot fulfil, enabling central Government to wash their hands of things for which they would rather not take responsibility.
I urge the Minister to think about that, even if the result in the referendum is much worse than he expects. I have been talking to people on the phone: when I first saw the question I thought it was extremely favourable—but then there is the question of how it appears cold, on the ballot paper, without any real debate. The majority of people know that there is a lord mayor; when the ballot uses the term “mayor” they think, “Is this a different mayor?” and cannot work out what the difference is. We talk about civic mayors, and Ken, and they say, “What is it, then?” We may not get as good an outcome as hoped, and I hope that at that moment the Minister will use the rather nice “get out of jail” card from the Localism Act 2011—the reference to other qualifying authorities, which I assume means that there can be devolution of power to local authorities even if they do not choose to have a directly elected mayor.
The Minister must face up to something very uncomfortable. When, in 1997, the Labour Government started devolving power, it did a good job in dealing with Northern Ireland, Scotland and Wales; but because there was deep division in the Labour Government about whether we wanted regional government or city regions, and we went down the regional government route, which the people, unfortunately, did not particularly like—and given, also, that we have devolved power to London—how we devolve power in England is a big unresolved constitutional issue. It must be dealt with in the context of the outcome of the mayoral elections.
The Minister’s task is not made easier by a measure that I hope we shall somehow manage to lose in the next 12 months—the perpetual review of constituency boundaries. At the moment the Birmingham constituency boundaries are concurrent with those of the city of Birmingham. We have 10 MPs and 40 councillors within those boundaries. If the boundary review goes through we shall be all over the place. I shall have bits of Old Warley; bits of Birmingham will be across the M5; Solihull will come in. A city mayor’s area will not even be concurrent with those of his or her councillors or MPs. That is pretty barking—and that will happen after every general election, so there will be no continuity. Therefore, if we genuinely want to devolve power to units that mean something, we will have to consider the size of cities. The problem is that Birmingham is too big. If we were London, we would be three or four boroughs. Rather than having the local government function of overcoming Whitehall, we neatly duplicate them and perpetuate the problem. Our wards are larger than anywhere else in Europe. Multi-councillor wards have 20,000 electors, so they are not big enough to be strategic, but are far too big to be local. The process of having one third up for election every four years with a fallow year, people’s relationship with their councillor, and the large size of councils is not good for localism.
First, I suggest that the Minister consider not holding future referendums on the same day as other elections, because doing so does not allow for proper debate. Secondly, we must knock on the head the notion that so-called independents are the answer. Independents are candidates who cannot rely on local party workers who provide us with a low-cost election machinery. If we want independents and a fair playing field, we must talk about costs, but we do not want to go there either.
Thirdly, if after the elections not enough cities take the opportunity—we do need to devolve power—we must look at the whole of England and the constituencies to see what powers are appropriate. A key one—we will look to the Minister to see what the Government do—is what we do to devolve responsibility and money allocated in relation to public health. If the Government are serious, serious amounts of money must be devolved. If they are not, and if the idea is just a fig leaf, we will not have a proper debate. We must also consider local units. I would expect Birmingham, which for the first time in many years is facing up to deciding what it stands for and what it is, to look at the way it is governed, and the size of its wards, as well as the devolution process to find natural communities.
Elected mayors are good. We have seen them work on the continent. They will be successful only if they work in units that people can relate to. Power must be devolved sufficiently, so that it is meaningful to local people; otherwise, the electorate will see it as a self-indulgent process, when they are far more concerned about how to pay their bills and whether they will still have a job tomorrow.
John Stevenson (Carlisle) (Con)
I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing this debate, which is incredibly timely given that we have elections in eight days. He mentioned that I initiated a debate on this very subject about 18 months ago, when probably one or two fewer hon. Members attended than are here today. Interestingly, Sir Peter Soulsby was there and went on to become an elected mayor. It will be interesting to see whether any hon. Member here today subsequently becomes an elected mayor.
I said during that debate 18 months ago that the idea of elected mayors was flying below the radar, and that is probably still the case to a certain extent, but I believe that they have the potential profoundly to transform our democracy. Perhaps things are beginning to change in the sense that referendums will be held in 10 of our great cities next week. In addition, three mayoral elections will take place at the same time: in London, which we all know about, Liverpool and Leicester.
The UK started its journey back in 2000, when the Labour Government introduced the concept of elected mayors; but unfortunately, for whatever reason, it never took off. I am delighted that the present Government have taken up the baton. There is still cross-party support—two great advocates are Lord Heseltine and Lord Adonis— and it is great to see other parliamentarians taking an interest. There have been 38 referendums, and only 14 have said yes, which is shame, but I think that is partly because local politicians have been resistant to the idea and national politicians have not been willing to drive it forward and promote it. Again, I think that is changing. Some councils are using their two-thirds majority to introduce elected mayors, as Liverpool and Leicester have done; some have gone for majority decisions to call referendums; and there has been the odd petition; but the 5% threshold is putting many people off, and I will raise that with the Minister in due course.
I am conscious that I do not have much time, so I shall concentrate on two aspects. First, I believe that elected mayors can be a huge benefit to local government. In this country, we often underestimate the importance and significance of local government. Local councils already have powers covering planning, procurement, economic development in their own areas and housing issues, but our politics are dominated completely by the centre, and that is fundamentally wrong. We underestimate what powers they already have and could use, but often do not use effectively. Elected mayors will be personalities who are transparent, known and visible to their local community, and they may be willing to use existing powers more effectively.
I want to encourage the Government to continue what I think they are starting to do: to continue the decentralisation process and to give greater powers to local government, whether using the elected-mayor model or the present model. Our country is far too centralised, and we need to spread power out. We have done that successfully in Scotland and Wales, and there is no reason why we cannot do so in the rest of the country.
If mayors are elected for a four-year term and have a mandate from the local people, they have the opportunity to implement their manifesto. At present, Carlisle city councillors are elected in thirds. That creates chaos, because they are never quite sure whether they will be in control. It is fair enough if the council has a majority that will carry it through two elections, but otherwise councillors are always thinking about the next election and not planning for the future.
Four-year terms, with good powers for elected mayors, will provide the opportunity to transform their localities. Not all elected mayors will succeed. There will be failures and eccentrics, but that is democracy, and we are part of a democracy. In four years, local people will have the opportunity to remove that person and to bring in someone else. People in the local area will decide who provides the leadership.
National politics will be transformed, and that is a real positive. At present, people come to Westminster, climb the greasy pole, and fall off, which is the end of their career. Now, we have the opportunity for national politicians, who may have made their name nationally, going out and doing something in their localities. Their national career may be over, but their local career might just be starting. They can be figureheads for the places that they came from, which is tremendous, because they would bring experience and contacts to their local areas.
The reverse is also true. I am amazed at how few nationally successful politicians have been council leaders. Elected mayors who are major politicians in their locality may ultimately become MPs. If they subsequently become Ministers, they would bring tremendous executive experience of running an authority, perhaps of only 250,000 people with a budget of £100 million, but they would have direct executive experience, which many hon. Members do not have. When Ministers are first appointed, they sometimes flounder because they do not have that experience.
I want to allow the maximum amount of time for the Opposition spokesman and the Minister, but I want to ask the Minister whether he will continue the commitment to elected mayors even if the referendum outcomes are not as we hope. Clearly, I should like all 10 cities to embrace the idea, but if only three or four do and others do not, is he committed to continuing the process? Will the Minister encourage further referendums for smaller cities, as has been done for the big 10? I would love Carlisle to have the opportunity to decide in a referendum whether to have an elected mayor.
Rory Stewart
Is my hon. Friend suggesting that we could have referendums for mayors in even smaller places, such as Penrith?
John Stevenson
I accept my hon. Friend’s point, and I do not see why not. If Cumbria, for example, had an elected mayor, smaller areas within Cumbria could easily have the same mechanisms and form of government.
At present, the 5% threshold has been a barrier to referendums and to people deciding to raise a petition in their areas and pursuing the idea of a referendum. I hope that that threshold can be revisited and, if possible, reduced to a level where it would be far easier for someone who believes in the idea locally to go out and obtain the requisite number of signatures. I look forward to the Minister’s response.
Chris Williamson (Derby North) (Lab)
It is a pleasure to serve under your chairmanship again, Mrs Main, and I congratulate the hon. Member for Cleethorpes (Martin Vickers) on securing this timely debate.
We all accept that there are various systems of local government, one of which—the executive mayoral system—already works perfectly well in a number of locations around the country. Hon. Members have spoken about executive mayors in glowing terms, but they are not necessarily a panacea. They can work extremely well, but so can alternative models of local government.
The previous Government recognised that the executive mayoral local government model has a place and can work well and offer strong leadership, and as a consequence, we legislated for it. As hon. Members have said, a petition needs to be signed by 5% of the population to meet the threshold to hold a referendum, but that is not an insurmountable barrier. If there is strong support in a local area for the introduction of an elected mayoral system, people will put their names to a petition and oblige the local authority to hold a referendum. If there is majority support, a mayor will be introduced. However, even when that 5% threshold has been reached and a referendum has followed, it has not always resulted in the introduction of an elected mayor. It is therefore important to put local people in the driving seat. If people want an executive mayor as their form of local government, they should be empowered to introduce one.
The hon. Member for Penrith and The Border (Rory Stewart) mentioned the possible introduction of mayor in his area. Again, if there is support in the local community, and if he wishes, I urge him to secure a petition and get the 5% of signatures necessary to ensure that a referendum takes place. If there is support for the idea, the hon. Gentleman will have the mayor for whom he wishes.
I congratulate the hon. Member for Cleethorpes on his honesty. It seems that he does not really favour a margin of democracy but wishes to see mayors being imposed. I do not think, however, that that is how we should proceed, and for me it is important to ensure that local people are put in the driving seat, rather than seeking to impose a Westminster template on local people.
On 3 May this year, referendums will be held in the great cities of our country, although I must say that I resent the way that Ministers have imposed them on local communities. As I have said, if there is an appetite for an elected mayor and the requisite groundswell of support, a mechanism is already available to the local community to present a petition and hold a referendum. The Government claim to be localist and it is unfortunate that they are imposing these referendums on our great cities.
My right hon. Friend the Member for Coventry North East (Mr Ainsworth) talked about apathy. He makes a strong point because apathy is the real enemy of democracy. Such apathy, however, is not necessarily due to the mechanism through which we organise local government but, at least in my view, to the diminution in the powers available to local authorities and to the way that, all too often, national politicians and the media have continually run down and denigrated local government. I believe that local governments provide an invaluable service to local communities and deliver vital public services. They are a useful mouthpiece for the concerns of local people through the auspices of their locally elected councillors.
It is also unhelpful and adds to that sense of apathy when local governments are seen as a delivery arm for central Government—that applies to both parties, and we must start to move away from that. My right hon. Friend mentioned the difficulty that some people find in identifying their council leader, but to some extent that is also true about people’s ability to name their local MP. It is down to the dynamism, commitment and ability of locally elected representatives—whether councillors, council leaders or MPs—to ensure that their local communities know who they are.
Lilian Greenwood
Does my hon. Friend think that it matters if people do not know their council leader, as long as they know their councillor? Is it not more valuable to have 55 councillors coming up with collective solutions, with each bringing up the needs and wants of their ward, than a single elected person who is supposed to come up with all the solutions?
Chris Williamson
I certainly think that the role of elected councillors is essential to local democracy. Dynamic and effective local councillors are a useful way for local people to raise their concerns, and more often than not, they are a great advocate for the communities that they represent. As well as asking whether local people want an executive mayor, we should be doing all we can to support, train and provide locally elected councillors with the necessary tools, to ensure that they can represent their communities as effectively as possible.
I do not think that there is evidence of a huge groundswell of support or a great appetite for elected mayors, and that is why I object to the Government’s imposing mayoral referendums. Obviously, if a majority of people support an elected mayor, they will be introduced in those areas. I suspect, however, that in a number of cities around the country, local people will vote to stay with the existing system and reject the Government’s proposal. People want decent public services, and I hope that the Minister will provide some reassurance about that. They want to see jobs and prosperity in their local community, and for their local authority to help secure economic development. That requires strong leadership, which, as I have said, can be provided by an elected mayor, but also by the existing model of a strong leader and cabinet.
We have seen evidence of that system around the country. In my home city of Derby, strong local government leadership has led to the complete regeneration and transformation of our city. The same is true of Nottingham, which is represented by my hon. Friend the Member for Nottingham South (Lilian Greenwood), where a real lead was taken to develop the transport infrastructure and the regeneration activities of the local authority have transformed the city. The same is true for Leicester, Manchester and Leeds. The transformational activities of a local authority can be achieved without the introduction of an elected mayor.
The hon. Member for Penrith and The Border touched on the need for us to rebuild democracy and said that perhaps we should look at devolving more powers to local government to achieve that. That is a goal that we should seek to accomplish. A few weeks ago, the Local Government Association published “Local Government’s Magna Carta”, which talked about putting local authority powers on a statutory footing, so that they cannot become a political football or the delivery arm of whichever Government are in power at the time. That is a way to rebuild democracy to support local authorities. Whether we adopt a system of elected mayors or retain the existing system, we need to guard against personality politics, which is the important point made by the hon. Member for Manchester, Withington (Mr Leech).
In conclusion, let me mention our party political system. Some hon. Members have been a bit embarrassed about our democracy. They seem to want to move away from our party political system, on which our democracy is based, towards personality-based politics. That is not a healthy way in which to run our democracy. I am proud of our party political system, and if a few more of us stood up for it and recognised that it is the foundation of our democracy, perhaps some of the criticism and the brickbats that we have seen in the media over the past few years would not be quite so pronounced.
Elected mayors have a role to play. They are not a panacea; they are one tool in the locker. Let us not put all our eggs in one basket. Let us allow 1,000 flowers to bloom. If local people want it, give it to them. If they do not, support powers for local government in a different form.
The Minister of State, Department for Communities and Local Government (Greg Clark)
It is a great pleasure to serve under your chairmanship, Mrs Main, and to respond to what has been an excellent debate with some really first-class speeches. I congratulate my irrepressible hon. Friend the Member for Cleethorpes (Martin Vickers) on coming back to this subject. He seems to have momentum behind him these days. I had not realised that he had been rested in his political career, but he is certainly back with a vengeance, and I know we can count on his presence for many years to come.
It is an opportune moment to be debating this issue because we have, through the Localism Act 2011, the opportunity to hold referendums on whether there should be a mayor in what was originally going to be 12 of our cities. Already, two of those cities, Leicester and Liverpool, have decided not to wait for the referendum to take place and have, through a resolution of their local councils, decided to go ahead with elections. In the case of Leicester, our former colleague, Sir Peter Soulsby, is now the mayor, and a vigorous election campaign is currently being fought in Liverpool to elect the first mayor on 3 May. In the 10 remaining cities, the choice is there for their people. It is right that the choice rest with the people of those cities, and debates are currently taking place across the country.
There are three broad reasons why it is time for cities to consider the case for a mayor. We would not have created these referendums if we did not think there was strong case for the people voting yes. It is particularly true for our great cities that they do not simply compete as part of the United Kingdom with other countries; they compete with each other—whether Nottingham, Birmingham or Leeds. They compete with Barcelona, Bordeaux, Lyon, Frankfurt, Bangalore, Beijing and Shanghai. They are international cities that deserve an international champion to speak up for them on the international stage.
I was struck by a conversation that I had with Joe Anderson, the current leader and mayoral candidate for Liverpool—he is not a member of my party. He said that the penny dropped for him when he was representing his city at the World Expo in Shanghai. He was there talking to the Chinese authorities, seeking to make the case for inward investment into Liverpool. The officials said to him, “We can’t understand why all of these cities from around the world, Chicago, Frankfurt and so on, have sent their mayor to Shanghai to represent them and you have sent an official from the council.” Then he got into an explanation of the English municipal system, but by that stage the argument was lost and he recognised what was needed.
Last week, we had a debate in Nottingham, in the constituency of the hon. Member for Nottingham South (Lilian Greenwood). When we were talking about this issue, the deputy leader, Mr Chapman, gave us a fascinating insight. He said, “Whenever I’m on the continent and I need to explain who I am, all I say is, ‘Je suis le mayor.’” That says it all; if someone has to claim to be something they are not—something that every other city they are competing against has—surely that makes the case for the prominence internationally that our great cities deserve and have had over the years? Let us bear in mind that the cities we are talking about are already world renowned and they need to continue to be so.
It is important also that those cities have a strong voice domestically. We all know the importance of our great cities. The reputation and standing of our cities is not what it has been in past decades and centuries. Not enough people in the country know what is going on in Leeds or Sheffield. They do not know the industries that are prospering. They do not know that Bristol is one of the most successful cities in the country in attracting investment into digital media. They do not know about the contribution that the digital gaming industries of Birmingham are making in the international world. They need to know not just what is going on there, but who the leaders of these cities are.
My observation as a Minister—and I know this from talking to Ministers from previous Governments—is that the contrast between the volume of the voice of our great cities and that of London is enormous. I dare say that more people in Nottingham, Birmingham, Sheffield and Leeds know the name of the Mayor of London than know the name of their city council leader. That cannot be right, and it is true nationally.
I have noted, as have my predecessors from previous Governments, that when the Mayor of London wants something, we know about it. We have to take the phone call. If we do not, we will find out what is needed for London through a megaphone. The right hon. Member for Coventry North East (Mr Ainsworth) made mention of this as well. Mayors demand more powers. For example, the Mayor of London has made a bold attempt to extend his transport powers. No one invited him to do that. He is perfectly properly standing up for the people whom he represents and, I hope, will continue to represent, and wants to extend his powers further. I want every city to do that. I want it to be a nightmare for Ministers that we have a legion of mayors from around the country banging the table, demanding more powers and making it impossible to say no. The Prime Minister has agreed to create a cabinet of mayors and to allow them to come and sit round the Cabinet table, and it is right that they should do so. The power of the existing mayors is enormous. The budget of the city of Birmingham is £3.5 billion a year, which is more than that of the Department for Culture, Media and Sport, in which my hon. Friend the Member for Wantage (Mr Vaizey) is a Minister. He may do better trying to become mayor of Birmingham. I am talking about very significant powers.
Lilian Greenwood
I thank the Minister for giving way; I am enjoying his speech. If the people of one of the great cities having a referendum next week, such as Manchester, Nottingham or Leeds, decide that they do not wish to have an elected mayor, is he suggesting that the Prime Minister and Ministers will not listen to those voices and invite them round the table?
Greg Clark
Of course the Prime Minister will listen to the voice of the cities, but if we are to create a cabinet of mayors—a cabinet equivalent to the Cabinet of Ministers—we want people with a mandate who can speak for all the people in the city. When the hon. Lady talked about Nottingham, I was disappointed that she talked it down. She said that it was too small to have an elected mayor. My goodness, this is a city that has two of the world’s greatest universities, with research and development facilities that are a beacon to the world, two football clubs and test cricket. Nottingham can punch higher than it does at the moment.
Greg Clark
I have two minutes left, so I must make progress.
Nottingham could benefit from greater powers. In fact, what the hon. Lady said should be a clarion call to the people of Nottingham to raise their ambitions and to live up to what they are capable of. The city could once again be renowned nationally and internationally. To do that, it can only help to have someone who speaks for the whole city and who has a four-year programme that they have put before the people to bring change to the city. That will be available to every city after the referendums next week. I hope that the people will take the opportunity to say yes. In 100 years’ time, in all of these cities that say yes, we will look back on a succession of mayors to whom people are erecting statues because they have done great things for their cities. We will look back at an historic change that will be for the good of the cities and for the whole United Kingdom.
Local Newspapers
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Mrs Anne Main (in the Chair)
I note that we have a full Chamber. The hon. Member for Corby (Louise Mensch) has indicated that she will take interventions, but may I ask that they be kept brief, or I will ask for them to be curtailed?
Louise Mensch (Corby) (Con)
Thank you, Mrs Main. It is a delight to see this debate so well attended by hon. Members from all parties. Although this is a particularly heavy news day, it is nevertheless appropriate that we debate local news, because local papers remain, despite not grabbing the headlines, the single most popular print medium in the UK. They are read by almost 70% of the adult population and have a cumulative readership of some 33 million readers per month.
In 2009, Ofcom noted that local newspapers were, far and away, the most trusted news organisations in the country.
Gloria De Piero (Ashfield) (Lab)
Local papers are essential for local democracy. Members might all like to think that people with concerns come straight to us, but they often go to the local paper, which they trust. We often read it and that enables us to do our job. I thank the hon. Lady for securing this debate.
Louise Mensch
The hon. Lady is right. I intend to mention local accountability later.
Robert Halfon (Harlow) (Con)
I congratulate my hon. Friend on securing this important debate and for kindly giving way. In Harlow, we have gone down from three local newspapers to one in the past few years. Unlike the BBC, which has the licence fee, local newspapers do not have a compulsory subsidy. Does my hon. Friend agree that it would be fair for the Government to continue to put transport and traffic notices in local newspapers to ensure that they survive?
Louise Mensch
I agree. Later, I will mention substantively the remedy for falling circulation and the lack of a good business model for local newspapers.
Karen Lumley (Redditch) (Con)
I thank my hon. Friend for securing this debate. Does she agree that papers such as the Redditch Standard help our elderly people, who do not have e-mail or other access to local news?
Louise Mensch
Indeed. If hon. Members will forgive me, I will make a tiny bit more progress. On that important point, Johnston Press, which manages a large group of notable newspapers throughout the country, recently cut a handful of its titles. The Corby Evening Telegraph is one of those titles and is moving from being a daily to a weekly paper. That newspaper group runs more than 1,000 titles throughout the land.
The threat to our local democracy is severe. Often, only the local press will hold an incumbent Member of Parliament or a local council to account, because only the local press and only local people really care. We all support our local radio stations, both commercial and BBC, but as all hon. Members in the Chamber know, five minutes is an eternity in broadcast terms: local papers can really go into a story.
The history of the local press is illustrious. In 1965, The Northern Echo successfully campaigned for a posthumous pardon for Timothy Evans; in 1977, the Lancashire Telegraph successfully exposed the corruption of chief constable Stanley Parr; and in my constituency, the Corby Evening Telegraph led the way on the attempted suppression of a local report.
Mr Ben Bradshaw (Exeter) (Lab)
Although I agree that it is always sad when a local newspaper goes from daily to weekly, as the Exeter Express and Echo in my constituency has recently, does the hon. Lady also accept that sometimes the economic reality means that if that does not happen, there will be no quality print journalism sustained in that community?
Louise Mensch
I agree that half a loaf is better than no bread, but an important part of my speech is to ask the Minister to assess, in his reply, whether direct or indirect Government subsidy ought to be given to our local press. In the Government’s plans for local television stations, for example, an indirect subsidy is proposed, whereby the BBC will be compelled to take content and pay for content arising from local television stations.
My right hon. Friend the Secretary of State for Communities and Local Government has rightly cracked down on local free sheets that, for so long, have been cannibalising at tax and rate payers’ expense the markets for our local papers. Unfortunately, that might have come partially too late to save some papers. The question for the Government is this: is the local press worth having; is the local press worth saving; and can an iPad app ever be a substitute?
Brandon Lewis (Great Yarmouth) (Con)
I thank my hon. Friend for being so generous in giving way on a very popular topic. In Great Yarmouth, we have a local newspaper, the Great Yarmouth Mercury, but we also have a daily regional paper, the Eastern Daily Press, that is the biggest selling newspaper—in fact, it outsells all the national dailies. The EDP is a campaigning newspaper, so it clicks in with what the people of Norfolk and north Suffolk are interested in. That is a good example of how a newspaper can move forward without subsidies.
Louise Mensch
The Eastern Daily Press is an absolute star and gem of a newspaper. However, I am sure that my hon. Friend would agree that what he mentions is not a substitute for a properly localised paper that can address the concerns of local people. In my constituency, the glories of Corby and of east Northamptonshire are very different and the concerns of people in east Northants and Corby are extremely different. It is wonderful that we have local papers that cover both areas.
Ian Paisley (North Antrim) (DUP)
The Guardian—the Ballymena Guardian—and the Times—the Ballymoney Times and Ballymena Times—are some of the most important papers in my constituency. They attract a readership of more than 80,000 people each week, yet our daily papers—the Belfast Telegraph, The Irish News and News Letter—attract half that readership. The best way for the Government to assist such papers is to make sure that all their advertising goes into our weekly papers instead of our daily papers.
Louise Mensch
It would not be for me to propose a knee-jerk solution to the problems of local papers and their declining readership. It is a fact that local newspaper readership has been declining and that big newspaper groups cannot make this work. I only ask the Minister in his reply to announce that the Government will have a review into local democracy and the local press. I ask the Government to look at what they can do—whether, indeed, the placing of advertisements to support local papers or whether we can look at community models of ownership, such as those successfully trialled in football supporters’ trusts, for communities that wish to take over and run their local papers.
The best brains in the Department for Culture, Media and Sport ought to turn their talents to addressing this problem because, otherwise, the greatest winners will be incumbent politicians. We campaign in our local papers and those of us who took seats at the general election remember how important it was whenever we managed to get a story into the local paper and whenever our opponents did. I will be generous enough to mention the name of my opponent, Andy Sawford, who was Labour’s parliamentary candidate for Corby and east Northamptonshire. It is only right that he should be able to publicise his campaigns in the same way that I publicised my campaigns against my predecessor, Phil Hope, when I took the seat from him. That is a vital part of our local democracy. We do not wish to entrench incumbency.
Of course, as a Conservative, I am naturally suspicious of subsidies. However, let us consider the narrow interests that are subsidised by the Government, the broad range of funds to which national lottery funding is supplied and the indirect subsidy in the case of the licence fee, such as that proposed to support local television stations. We need to ask ourselves whether we wish to support a level playing field for local press. If the BBC is supported by taxpayer-funded subsidies, council free sheets are supported and local television stations are indirectly supported by a compulsion for the BBC to buy their content, why should local newspapers posses none of those advantages when they offer an irreplaceable function?
Simon Kirby (Brighton, Kemptown) (Con)
Does my hon. Friend agree that, in marginal seats such as mine, The Argus and the Sussex Express serve the very purpose that she outlines in making sure that incumbency is not too strong a factor? Such papers hold MPs to account and ensure that they do a good job.
Mr Robin Walker (Worcester) (Con)
I am very proud to have in my constituency the oldest continuously running newspaper in the world, Berrow’s Worcester Journal. The editor of that newspaper has urged me to make the point that it is not only a question of the value for money that the Government get out of their advertisements in the press; it is also a question of trust. As my hon. Friend pointed out, people have greater trust in what they read from newspapers.
Louise Mensch
I agree completely. If we agree that, in some cases, state subsidy—whether direct or indirect—is justified, we need to ask ourselves whether newspapers along with other organs are a worthy recipient of that at local level. I come again to the irreplaceable point that local democracy is best served when there is an organ that can hold local politicians to account in a thorough way. At the same time, when we consider our local papers and their value to the community, it is not merely the fact that they hold our feet to the fire in our constituencies; it is how keenly they are at the heart of rural and urban life in our communities.
Jim Shannon (Strangford) (DUP)
Local papers clearly have a contact with each of the villages and hamlets in my constituency. My local paper, The Newtownards Chronicle, contains local stories for people who live in the area. Does the hon. Lady feel that it is important not just to have local stories, but advertising? That is the success of a local paper—its interaction with the community.
Louise Mensch
Yes, I do indeed. When part of that advertising comes from Government and the local council, it is important to create a level playing field over various forms of media. The BBC is a national treasure, but when it goes to hyper-localism in its websites and reporting, it creates a very difficult behemoth for local commercial papers to compete against. Council free sheets have been the single biggest cannibal of the markets of local papers. Research sent to me by Retail Newsagent Magazine states that more than £5 million will be wiped off local newsagents in the future. It is not merely the 10,000 journalists that local newspapers employ, but the subsidiary trade that they bring to their areas and to newsagents that rely on passing trade and footfall, as people come in to buy their local paper every day.
Mrs Linda Riordan (Halifax) (Lab/Co-op)
I congratulate the hon. Lady on securing this important debate. Does she agree that the local economy of towns such as Halifax will suffer another blow when they are already suffering from job losses in the banking sector and the public sector?
Louise Mensch
I do indeed. Now is not the time to wipe out our local press.
Dr Sarah Wollaston (Totnes) (Con)
My hon. Friend is being most generous. As everyone knows, she is prolific and effective in her use of new media. It is wonderful to see that she also supports traditional media, too; papers such as South Hams Gazette in my constituency, which does a fantastic job. I agree with her completely that this is not about subsidy. Supporting advertising through our local press is the best way to support democracy.
Louise Mensch
Yes, indeed. There are direct and indirect forms of subsidy. The Government should be considering that, rather than writing out a cheque to local newspaper groups, which is not at all what I propose.
Mr Mark Williams (Ceredigion) (LD)
I am not deviating from what the hon. Lady and other hon. Members have been saying about the need for advertisements—my local paper, the Cambrian News, will be very glad to hear about that—but will she not leave the issue of subsidies completely? We have a system of Papurau Bro local Welsh language newspapers that have been in receipt of funds from our National Assembly Government, so there is a precedent in Wales.
Louise Mensch
Yes, indeed, but that is slightly different because the preservation of the Welsh language and culture is an overriding national concern. Just as we subsidise Welsh television channels, it is quite right and proper that Welsh language outlets should be subsidised—it is a slightly different matter. I repeat that indirect subsidy is already there for a number newspapers, outlets and organs that compete with our local press. I am concerned that the Government should provide a level playing field. I will give way to my hon. Friends, and then, I am afraid, I must conclude my speech.
Andrew Griffiths (Burton) (Con)
I thank the hon. Lady for giving way and bringing to us the parliamentary equivalent of speed dating. She will know that I am lucky enough to have that august newspaper, the Burton Mail, in my constituency. It is not only a centre of information, but a great champion for my local community. It has raised with me the concerns that my hon. Friend the Member for Harlow (Robert Halfon) raised about the impact of the Department for Transport withdrawing its advertising in newspapers. That will force newspapers to close. Should it not change its mind?
Louise Mensch
It should indeed change its mind. There is absolutely no justification for the Government withdrawing advertising support when they provide subsidy for various other types of media.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Does my hon. Friend agree that a free press is the hallmark of a free society? Councils may be looking to save money, but starving newspapers of that will be worse for democracy rather than better.
Louise Mensch
I agree with my hon. Friend. We have to look at the press as a special case. Local newspapers, as I said at the beginning of my speech, perform an absolutely irreplaceable function in our democracy. Nobody else will be interested in the malfeasance of our local councils. Few people will be interested in the expenses scandals or otherwise of those of us who are on the Back Benches and not of ministerial rank—I almost said “fodder” but, fortunately, I stopped myself. I have every sympathy with my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), because I took a marginal seat from Labour at the previous election and, in those marginal areas, it is absolutely vital that both the candidate and the challenger can put their case in the local media.
We have not had much time in the debate, because many hon. Friends and hon. Members wanted to intervene and to praise their local papers, which are at the heart of their communities. We all grew up with the softer, nicer stories and the pictures of schoolchildren celebrating St George’s day, of country fêtes or of town centres cleaning up after riots. All those sweet little stories might not grab national headlines, but they are nevertheless—I say this with complete sincerity—at the heart of our national life and our national communities, and they deserve preservation as much as an arts or theatre group or anything else that the Government are prepared to subsidise directly or indirectly. I ask the Minister to give every hon. Friend and hon. Member in the Chamber some hope that the Government will look again at the plight of the local press, at the creation of a fair level playing field and at the indirect subsidies proposed for local television stations, which will be a further competitor for local newspapers, with the BBC required to buy their content. In particular, can the Minister press colleagues in other Departments to continue advertising in local newspapers?
At the same time—not that one usually ever has to press the great and wonderful Secretary of State for Communities and Local Government to any kind of action—when he is stamping down on council free sheets, I hope that he will look again and do it with ever more vigour, because it is completely unfair and wrong for ratepayers to be asked to subsidise something that puts their local paper out of business. All we ask for is a little fairness to preserve something that is so important in our national life. I look forward to the Minister’s reply.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
It is a great pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Corby (Louise Mensch) on securing this important debate. My hon. Friend the Member for Burton (Andrew Griffiths) compared it to speed dating but, as I heard the various interventions, it seemed more like the parliamentary equivalent of “Just a Minute”. The great deal of interest in the debate on the part of colleagues might not be unrelated to the fact that, last time I debated local newspapers, I managed to secure half a page on page 7 of my excellent local weekly, The Didcot Herald.
Lisa Nandy (Wigan) (Lab)
There is often good coverage in my local newspaper, the Wigan Evening Post, but it is not always comfortable, as should be the case. As the Minister knows, Johnston Press, which recently announced huge losses, employs people in Wigan and elsewhere. Can he tell us whether he can get some assurances from the management of Johnston Press for staff who are obviously concerned about their future?
Mr Vaizey
I thank the hon. Lady for her contribution, and I should also mention the excellent contributions of my hon. Friends the Members for Harlow (Robert Halfon), for Redditch (Karen Lumley), for Great Yarmouth (Brandon Lewis), for Brighton, Kemptown (Simon Kirby), for Worcester (Mr Walker), for Totnes (Dr Wollaston), for Ceredigion (Mr Williams), for Suffolk Coastal (Dr Coffey) and for Burton; of the right hon. Member for Exeter (Mr Bradshaw); and of the hon. Members for Ashfield (Gloria De Piero), for North Antrim (Ian Paisley), for Strangford (Jim Shannon) and for Halifax (Mrs Riordan). As Minister for fashion, I normally go out of my way to praise the sartorial elegance of my hon. Friend the Member for Corby, so I hope she does not think me ungallant if I make the point that today she is eclipsed by my hon. Friend the Member for Harlow who, in the parlance of fashion, is wearing a powder-blue corduroy suit with a rainbow accessory tie.
The issues are important and, as the hon. Member for Wigan (Lisa Nandy) indicated, local newspapers are under significant pressure. I was in touch with Simon O’Neill, the editor of The Oxford Times in my constituency, and he pointed out that between 2006 and 2011 the turnover of Oxfordshire publishing businesses halved, they closed their district offices and editorial numbers declined by 40%. He is also a man whose glass is half full, however, and he made the point that his own newspapers between them employ more journalists than all the other media outlets in Oxfordshire combined.
Robert Halfon
I thank the Minister for his kind comments about my suit. The Harlow Star is delivered to almost every home throughout Harlow free of charge, and it and many other local newspapers depend on traffic notices. Many old people—we have 11,500 pensioners —do not use the internet and depend on traffic notices from their local newspaper. Will he lobby the Department for Transport to ensure that traffic notices are kept in local newspapers?
Mr Vaizey
I hear what my hon. Friend says. Obviously, I was going to cover the consultation on traffic regulation orders conducted by the Department for Transport. The consultation opened in January and this is the second time we have debated it in the House, which is a reflection of the importance that hon. Members attach to this subject. When we debated the matter previously, I urged all hon. Members to make their own submissions on behalf of their local newspapers.
The consultation closed last Monday. I understand that last week, the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), met representatives of newspaper groups. The Department for Transport is taking this seriously. I would not like to pre-empt the conclusions of that consultation. I made the frank points in the previous debate that there is a balance to be struck between saving the taxpayer money, effectively, by not having a statutory requirement and by deregulating, and recognising that local newspapers in particular depend on statutory notices for part of their revenue.
Nick de Bois (Enfield North) (Con)
This Government have pioneered transparency in local government finances with a requirement to publish such information. Anyone who has waded through it will see reams of pages. If the local press are not around to do that, few others will. Does the Minister agree that this is a real threat to local democracy and transparency, as wonderfully exemplified by the Enfield Independent and the Enfield Advertiser?
Mr Vaizey
As I said earlier, we should recognise that local newspapers take their responsibilities in this area seriously. The editor of The Oxford Times, Simon O’Neill, made the point that, although it has had radically to reduce its headcount because of commercial pressures, nevertheless it has tried to do that in the back office. I regret anyone’s losing their job, but that paper has focused on maintaining the quality of its journalism.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
On the point made well by my hon. Friend the Member for Corby (Louise Mensch) about the uneven playing field in terms of council so-called free sheets, might it help the market to require councils to charge for each free sheet and thereby see how many they sell? That would bring competition back into the local market.
Mr Vaizey
As my hon. Friend is aware, my right hon. Friend the Secretary of State for Communities and Local Government made it one of his priorities when we came into office to consider council free sheets. We introduced a code of recommended practice a year ago, at the end of March 2011. Local authorities have to take account of that statutory guidance, restricting the number of newsletters that local authorities can issue quarterly. For example, I know anecdotally that Hammersmith and Fulham now produces its own free sheet as part of the local newspaper, the Fulham and Hammersmith Chronicle. So in effect, rather than being a competitor of the local newspaper, the council has ended up subsidising it, if one wants to use that word.
Fiona Bruce (Congleton) (Con)
Does the Minister agree that a fully independent, strong local paper such as the Congleton Chronicle, the strength of which is in its independence, makes a unique contribution to strengthening community life—in many ways acting as its glue—for just a few pence a week? Will he join me in congratulating the paper, which is bucking the trend that we have heard about today by having not only three long-running titles—the Congleton, Sandbach and Biddulph Chronicles—but this year launching a new title, the Alsager Chronicle, which is proof that a well-resourced and supported independent local paper can flourish in the internet age?
Mr Vaizey
I happily join my hon. Friend in congratulating that newspaper on its success. Well-run local newspapers producing content that local people want to read will be successful.
I was interviewed recently by GQ Magazine, which my hon. Friend the Member for Corby is familiar with, about how to get elected to Parliament. I made the point, which I think hon. Members would agree with, that a page in a local newspaper is worth much more, still, than a Facebook campaign. That is worth remembering.
Anne Marie Morris (Newton Abbot) (Con)
Will the Minister join me in congratulating my Herald Express, which won the national award for creative bravery when it converted from being a daily to a weekly? If he wants some advice and guidance about how to do it yourself and get it right, that is a good example: that paper did it, and kept the sales and circulation.
Mr Vaizey
I join my hon. Friend in recognising the achievement of her local newspaper in receiving that award and in moving from a daily to a weekly. That echoes the point made by the right hon. Member for Exeter—that, although painful to say it, it is better that a newspaper survive and prosper, albeit in a different format, than close entirely.
Mark Menzies (Fylde) (Con)
All three of my local papers, the Blackpool Gazette, Lytham St Anne’s Express and the Lancashire Evening Post are Johnston Press papers. I urge the Minister to seek a meeting with senior management at Johnston Press to see in what practical ways we can help.
Mr Vaizey
I thank my hon. Friend for that intervention, which reminds me that I was remiss in not addressing the point put to me by the hon. Member for Wigan. I have called the managing director of Johnston Press and hope to have a meeting with him, simply to engage with him and hear his strategy. As a matter of principle, it is not the job of Government to tell a commercial business how it should be run or what its requirements are.
Ashley Highfield, the new managing director of Johnston Press—I knew him at the BBC when he was putting together the iPlayer, and he was then at Microsoft—has been hired because of an explicit recognition that we are moving into a digital age. Members will say that not everyone has an iPad yet, and it is still important to maintain the traditional format of a local newspaper, on which so many of our constituents still depend to get their local news.
Louise Mensch
Not only does not everyone have an iPad at this stage, but residents in my constituency of Corby were unbelievably insulted to be told that the Corby Evening Telegraph would be replaced by an iPad app, which excludes both people on low incomes and elderly people who are not familiar with the internet. I firmly agree with the Minister that a Facebook campaign is no substitute. He is, like me, a great lover of social media. Does he not recognise, as I do, that we will lose much photojournalism and in-depth coverage if we switch from true local stories to a couple of tweets?
Mr Vaizey
Yes. I should say that I often get myself into trouble making offers to Members; but, as and when I am able to set up a meeting with the managing director of Johnston Press, I will issue an open invitation to that meeting to all Members who may or may not have had the opportunity to meet him, so that they can put their points to him. It would be useful for him to hear from the grassroots. We Members of Parliament can forget that we are the grassroots of our communities.
Jim Shannon
So far, no Member has mentioned the opportunities that come through local papers for those starting on the first rung of journalism. They go from local and provincial papers to national papers, and on to TV and radio. Many people in Northern Ireland depend on that. Does the Minister feel that that cannot be replaced?
Mr Vaizey
The hon. Gentleman makes his point. Time and again, we hear about the much wider impact of local newspapers, not just in delivering news to their local communities but the tangential impact on skills and training. That is why, for example, to return to my own patch in Oxfordshire, I am heartened that there is a drive by the editor-in-chief, Simon O’Neill, to continue to invest in journalism because of the recognition that quality journalism sits at the heart not just of the success of local newspapers, but of media generally.
Simon Kirby
Does the Minister agree that local newspapers often create a fertile environment for other print publications, such as Love Brighton, What’s Happening and The Latest magazines in Brighton and Hove?
Jonathan Lord (Woking) (Con)
I have to inform the Chamber that, unfortunately, the long-established Woking News and Mail closed a few months ago, but a new Woking News and Mail, which started as a monthly publication, is now fortnightly and supplements the excellent coverage of the Surrey Advertiser. Surely, if the demand is there people will buy the local press.
Mr Vaizey
I agree.
We have relaxed the media ownership rules to allow local newspaper groups to merge; we have conducted a consultation on traffic regulation orders, which has just concluded; we have restricted the use of council free sheets; we have introduced local television, which I think will supplement and support local newspapers; and we continue to support community radio. Above all, the message goes out from the House and from this lively, well-informed debate about the passionate support in this House and among our local communities for our local newspapers. I will happily organise a series of meetings with the managing directors of newspaper groups, whether Johnston Press, Newsquest or Northcliffe, if Members would find that helpful.
Outsourcing (Government Departments)
(12 years ago)
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Grahame M. Morris (Easington) (Lab)
I am grateful, Mrs Main, for this opportunity, and it is a privilege to serve under your chairmanship for what I believe is the first time. Today, I hope to raise a very important issue, put down a few markers and seek some answers from the Minister to a series of questions that I will pose. I want to place on record my thanks to the Public and Commercial Services Union, the TUC and Unison for various pieces of briefing information that they have provided in support of my efforts today.
When the Minister for the Cabinet Office and Paymaster General was Financial Secretary to the Treasury under John Major, he sought to
“extend competition in the provision of public services further and faster than ever before”.—[Official Report, 18 November 1991; Vol. 199, c. 25.]
He said that he would do so with no bias between public and private sector providers. It must surely have been a setback for him personally that, shortly after setting out that agenda, his then constituents in the North Warwickshire constituency decided to ditch him at the 1992 general election in favour of Labour representation. However, in 1997, he returned to Parliament in the far safer Conservative seat of Horsham and he waited patiently for 13 years in opposition before returning in 2010 to his privatisation agenda of 20 years earlier to make private everything that is public.
I give this preamble only to set out the context of the debate: we can all understand that an individual who has waited 20 years to achieve his ambition may be more keen to implement his policies and to do so somewhat quicker than otherwise would be the case. Indeed, the right hon. Gentleman has made his intentions clear. In June 2011, he spoke to the business community on the subject of public service reform, saying:
“Spending cuts are one-offs. What we need to do, and are doing, is fundamentally change the way we operate.”
However, the problem with the coalition Government’s approach is that it is not evidence-based; it is ideologically driven. Whether they are outsourcing services, opening them up to a range of providers or decentralising them, the Government are gambling with the nation’s hard-won assets.
Jonathan Lord (Woking) (Con)
We seem to be hearing a political diatribe against outsourcing. What would the hon. Gentleman say the previous Government were up to when they successfully outsourced many services? Indeed, many Labour councils, as well as Conservative and Liberal Democrat councils, followed in the footsteps of those pioneering Conservative councils of the early 1980s, by outsourcing services to give people a better service at lower cost.
Grahame M. Morris
The basis of my argument essentially is that there is no evidence base for that approach. If the hon. Gentleman will allow me to develop my argument a little further, I hope to illustrate that point.
If we look at the evidence base, it is in fact a constant lesson from history that reform has often come, as the hon. Gentleman has indicated, in the form of privatisations and outsourcing, but it has not always led to service improvement. Whether the justification for such reform has been a desire to bring perceived good practice from the private sector into the public sector or, indeed, the belief that savings can be made through outsourcing, the question that we parliamentarians must ask the Government and that I wish to put to the Minister is this: where is the evidence for those reforms?
I hope that the Minister will address this issue, which is about the economic and social evidence base rather than an ideological base that is behind what seems to be a rush to sell off services and public assets. It is my contention that the Tory-led policy on public services reform that is being followed by the coalition is ideologically driven and light on any such evidence base. I want to develop that point by presenting some evidence to suggest that the Government are on the wrong side of public opinion and, indeed, wrong about the whole issue of public service reform.
I hope that the Minister is aware of a report by Ipsos MORI entitled, “What do people want, need and expect from public services?” The report presents the most up-to-date and detailed data on current public attitudes to public services and public service reform. I want to put three headline findings on the record. First, people
“want public services to be based on notions of the public good, rather than just what’s good for me”.
Secondly, people
“understand the public good largely in terms of universalism, with equality of access to benefits”.
Thirdly, people
“struggle to see a compelling or urgent case for reforming public services to cope with economic pressures and social changes”.
Gloria De Piero (Ashfield) (Lab)
Does my hon. Friend agree that there are different interpretations of public sector reform? For example, Labour set up academies in areas of high deprivation, but the Tory-led Government turned that on its head. Their interpretation is anti the public good.
Grahame M. Morris
I agree that there are various interpretations of what constitutes public sector reform, and I will speak about academies in a few moments. I am grateful to my hon. Friend for her intervention.
On all three points illustrated in that detailed survey, the Government are out of step with the public on public service reform. Ordinary people want public services in public hands for the public good, but the Government seem to want public services outsourced to business for the good of private profit. Ordinary people want universalism, but the Government want to decentralise, to remove targets and to create local variations and postcode lotteries, so going against standardised and universal access. Ordinary people oppose rapid upheaval and fundamental reform to public services, and a case in point is the opposition to the NHS reforms.
The Government have run amok with the reorganisation of the health service and forged ahead with public service reform and outsourcing at breakneck speed. It is no surprise that when Ministers make speeches on public service reform, they do so to business leaders, never to public sector workers, service users or trade union groups who work in the public sector. I want to place on the record my support, sympathy and admiration for the front-line workers who are so often treated like pawns in a game of chess, facing constant change, reorganisation and regrading, often at the whim of political elites.
Workers across the public sector know that the latest policy move to the mass outsourcing of services and a free-for-all for business will be a last hurrah, because many of the changes will be irreversible. For people who work in the public service, it means an end to job security and to nationally determined pay, conditions and terms of service. Instead, national public services will become ever more fragmented, unstable and variable, offering short-term and risky employment not by the state, but by any fly-by-night private sector operator.
Jackie Doyle-Price (Thurrock) (Con)
The hon. Gentleman is making a passionate case, but it is framed as public versus private. The reality is that we are looking at any number of models to deliver our public services. We have social enterprises and co-operatives. Surely, we should look at the outcome and not the structure of delivery.
Grahame M. Morris
I thank the hon. Lady for her intervention, but there is a danger of fragmentation, even with some of the models that she mentions—for example, in the national health service and social care. If we are trying to promote integrated services, a plethora of private sector and even voluntary sector providers works against that ethos. That is a risk.
My argument is that public sector workers and service users know the difference between private profiteering and public services. Let us not forget that the key difference is that the first duty of a business is to its shareholders and the pursuit of profit.
The coalition Government are trying to do two things in developing their own brand of public service reform, which is quite distinct from what the Labour party did when in office. First, they are trying to tie down companies with more stringent contracts in the belief that setting targets will guarantee performance—ironically, the Government argued against targets in the national health service and wanted them to be ditched by public sector providers. Secondly, they believe that with stricter conditions for private sector providers, there should be no limits on where those providers should be allowed to tread within the public sector.
Ian Mearns (Gateshead) (Lab)
My hon. Friend is developing a pertinent point. If we outsource public services—a public commodity—to the private sector, in some way, shape or form the private sector has to make a profit to give to its shareholders. That seems to be the logic from the Government’s perspective, but it will be impossible for public services to become more efficient or reinvest savings back into the development of the service.
Grahame M. Morris
That is an excellent point, and we should be guided by the evidence. If the Minister can demonstrate that that is not the case, I will be interested to hear his response. Certainly, in relation to the national health service, the detailed impact assessment published with the Health and Social Care Bill proved that in-house services were considerably cheaper than those offered by the private sector, as well as being more responsive, accountable and fitting in with the wish for better integration.
A little earlier, different models of provision were mentioned. The coalition Government are promoting different models for outsourcing different services within different Departments—for example, academies and education, the utilities model and the NHS, or payment by result for welfare and benefits. However, although those are different models, the driver is the same. Emergency 999 call centres have been privatised and outsourced together with the administration of the benefit system. The roads on which we drive are the latest to go, as the pace of outsourcing to the private sector speeds up.
John Cryer (Leyton and Wanstead) (Lab)
Another example is the translation service. Since it was moved into the private sector, a plethora of problems have included translators failing to turn up at court and criminals walking away without being tried because no translator was present.
Grahame M. Morris
There are many examples where the proposals for privatisation, outsourcing or whatever models are being piloted have not produced positive results. I do not have the opportunity to list them all owing to a shortage of time, but I am grateful to my hon. Friend for that example.
The Welfare Bill passed through Parliament in March and lays the foundations for billion-pound contracts of five years or more for private companies to run welfare-to-work programmes and the administration of the new benefits system. I believe that the rush to outsource the biggest spending Department—the Department for Work and Pensions—rather than develop a coherent strategy to create jobs and growth in the economy, is a dereliction of duty by the Government.
Jackie Doyle-Price
The hon. Gentleman draws attention to a good example of a contract that is working. In that contract, the burden of risk is pushed on to the private provider. If it does not deliver jobs, it does not get money. Surely, that is a good thing.
Grahame M. Morris
I am afraid that I do not agree with the hon. Lady. The issue was raised during questions to the DWP on Monday—by myself, I think—and the papers this weekend illustrated a number of examples of service failure. Service users feel huge dissatisfaction with Atos and A4e, and there has been a huge uproar about the quality of service provision in training or retraining ex-offenders.
The evidence base is littered with failures from the private sector, so it is difficult to hold up an example. If there is a good example, I suspect that it might be the exception rather than the rule. Most often, there is a negative impact for employees, with the prevalence of short-term contracts and the use of part-time and temporary staff who are often recruited through employment agencies. Indeed, Unison commissioned a report on the rise of the multi-billion-pound private public services industry and raised significant concerns about the increased dependency on private firms.
The privatisation of public services has already become a huge industry, through which the private sector receives more than £80 billion of taxpayers’ money every year, yet it has become characterised by increased cost, deteriorating quality, the loss of accountability and the greater risk of service failure. The reason why we had the birth of municipal provision in the great northern cities—Manchester, Bradford, Leeds and Wigan—was that the city fathers saw that public provision was more efficient and accountable than the existing private sector provision that was available at the time. Those arguments are not new in that respect.
I want to give another couple of examples. I mentioned A4e, and it would be remiss not to mention the Southern Cross care homes debacle. Other scandals in relation to welfare have also raised such issues and brought this agenda to the fore. That will happen more often as more services are passed over to the private sector. There is also a risk that we will lose control over our public services altogether. Indeed, in 2007, the Local Government Association warned that the amount of local authority spending on external private sector contracts and the ability of local government to make efficiency savings when it has already signed contracts without further damaging services was not realistic.
The Government’s central argument in favour of the increased commercialisation and privatisation of public services rests on the importance of consumer choice as a driver for increased efficiency, accountability and value for money. However, again, that is not supported by the evidence contained in the public surveys that have been carried out. One area that features genuine consumer choice is the provision of utilities. In most parts of the United Kingdom, people can choose a provider of gas or electricity from a handful of companies. However, is that a good example? There is massive public concern that prices have increased way above inflation and that the profits of the energy companies have soared. So the panacea of private-led competition is not everything that the coalition would have us believe it is.
Jonathan Lord
The hon. Gentleman is making a delightful speech in favour of socialism, the big state and the state always providing, whether nationally or locally. He talks about the utilities and so on. British Telecom is not perfect, but I remember as a young man when one had to wait weeks and weeks, if not months, to have a phone installed, and I think there was a choice of about three phones. As soon as BT was privatised, it saved taxpayers’ money and gave a much better service to its customers.
Mrs Anne Main (in the Chair)
I remind the hon. Gentleman that I am sure that he would like to give the Minister enough time to respond to the questions that he has asked.
Grahame M. Morris
I would, indeed—thank you, Mrs Main.
There is an awful lot to explore in relation to the subject, but I want to pose a number of questions to the Minister. I want to ask about the evidence. Given that the survey evidence shows that the public seem to reject the individualist consumer approach to public service, why are the Government pursuing that? Can he point to specific pilots or evidence of its success? What protections are in place to stop the spiralling costs of redundancies during this transition period, for example, in the national health service?
In respect of the decentralisation agenda, what specific standards are being developed to ensure accountability, equality of access and provision nationally? With this new landscape of competing service providers from different agencies, with different forms of accountability, how will the needs and interests of service users with complex and multiple needs be protected? I am thinking about the social care sector, where needs dealt with by different providers often require integrated services.
Will the new accountability measures apply to private and voluntary sector providers? As we know, they remain outside of the scope of the Freedom of Information Act. What direct accountability will there be to elected representatives and democratic institutions, nationally and in respect of local government, when such public services are outsourced?
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
It is a great pleasure to serve under your chairmanship for the first time, Mrs Main. I congratulate the hon. Member for Easington (Grahame M. Morris) on securing the debate and on how he presented his case. I believe that he worked in the NHS before going into politics. I read his profile, which says that his political mission is to push Labour leftwards, so he must be delighted with the direction of travel. It is clear where he is coming from and I have a certain respect for that, even though I come from a different place politically.
Our constituencies may be different, but I suspect that all our constituents share a desire to see the Government deliver better value for the tax that they pay. This Government take that seriously.
Mr Hurd
Perhaps I can just advance my argument a little.
This is not the place to have a great debate about the economic situation or the level of debt that the Government have inherited, but we are serious about trying to deliver better value for taxpayers’ money. I am a Minister in the Cabinet Office. The controls that we have put in place—that my boss, the Minister for the Cabinet Office and Paymaster General has put in place—delivered some £3.75 billion in the first year of our Government and are on track to deliver £5 billion of savings this year. We are quite proud of that. Frankly, it was an exercise in delivering common sense. It is an appalling indictment of the attitude of the previous Administration to public money that such big savings could be found in such short order by doing some basic commonsensical things.
Ian Lavery
Does the Minister agree, in respect of looking for better value, that paying doctors, nurses and porters in his constituency more than those in my constituency is a good way of saving money?
Mr Hurd
I want doctors and nurses to be paid at fair value. I am also interested in the value that they offer to the taxpayer for the work that they do, which brings me on to my next point about public services and how they are commissioned.
The Government’s view is that, when expectations about public service standards are rising, we need to find more creative solutions. There is dissatisfaction and a challenge, because there is less money about and therefore greater pressure to get better outcomes with less money.
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) made an important point: the direction of travel here is not driven by ideology, although there is more ideology communicated from the Opposition than the Government. This is driven by a desire to deliver better outcomes on behalf of the taxpayer and the people we are trying to help in a way that is much more transparent than before.
Ian Mearns
The Minister belabours the point about making additional efficiencies within government since the coalition came to power. Of course, one of the biggest elements of public expenditure is local government. Conservative control in local government has been at a high watermark for eight or nine years now. Would he criticise Conservative councils in that respect?
Gloria De Piero
The Minister might not want to speak about Conservative councils, but I live in Nottinghamshire where the Conservative council has just used taxpayers’ money to develop a new logo on all the buildings. Is that good value for taxpayers?
Mr Hurd
I do not know because I do not know the situation in Nottingham. That is an issue on which the people of Nottingham can take a view and they will be able to express that view more clearly and more loudly because we are moving towards a world in which there is more transparency about local authorities’ spending. We are moving away from the opaque world in which we had very little information about what was being done in our name.
Lisa Nandy (Wigan) (Lab)
I share the Minister’s concern about value for money, although I am also concerned about protecting the most vulnerable and about the standard of public services and the intelligence of targets that are used in outsourcing. Will he respond to the point that was powerfully put by my hon. Friend the Member for Easington, about the evidence base behind this? Where is the evidence that outsourcing provides better value for money?
Mr Hurd
I am delighted to move on to the substance of the debate. I have tried my best to respond to various interventions from Opposition Members. The hon. Member for Easington referred to open public services. [Interruption.] With respect to the hon. Gentleman, I am trying to answer the meat of his argument, which is whether it is good to create a situation in which those buying on behalf of the taxpayer have choice about where they buy services on our behalf. He is actually arguing for no choice and for protection of the status quo. The Government’s open public services White Paper makes it clear—we expect a political argument about this—that we want to switch the default setting away from in-house delivery to commissioning services from a diverse range of providers where that would improve services or reduce costs.
The hon. Gentleman made it clear that he was hostile to the for-profits sector. My hon. Friend the Member for Thurrock made a valuable point that the Government are agnostic about who delivers the service. We are particularly keen—it is a coalition Government commitment —to make it easier for charities and social enterprises to participate in public services. They are not driven by a profit motive. By definition, they are driven by a desire to deliver a better outcome for the people whom they support and care about.
Jackie Doyle-Price
The hon. Member for Easington (Grahame M. Morris) referred to academies in his speech. Perhaps I should remind my hon. Friend about the Public Accounts Committee’s inquiry into academies, which showed that they delivered not only better outcomes for the taxpayer but better value for money. Is that not a perfect example of how changing provision and getting away from uniform provision delivers better outcomes?
Mr Hurd
Yes, I absolutely agree. I also agree with what my hon. Friend said when the hon. Member for Easington kept saying, “Where’s the evidence?” There is plenty of evidence for the value of competition—if we need it, because we know it in our daily lives. Academic research suggests that competitively tendering public services typically produces savings of between 10% and 30% while maintaining or improving standards. I refer the hon. Member for Easington to the “Public Services Industry Review” of July 2008 by Dr DeAnne Julius, but there is no shortage of evidence for the value of tendering and introducing competition into the system.
Dr Julius also talked about the payment-by-results regime, which the Opposition do not like at all, although the situation we inherited was that those buying on our behalf were extraordinarily complacent about whether we got anything for the money. Such a regime is not appropriate in every case, but we are moving towards a requirement for commissioners—those buying on our behalf—to think much harder about what they are buying and the outcomes against which they will be measured in a new transparent world where there will be nowhere to hide. Yes, we will introduce payment by results where that is appropriate, because it introduces some basic, common-sense discipline into how we spend taxpayers’ money. For most of my constituents, that makes plain common sense—after all, it is their money.
Finally, we are also keen to encourage the development of mutuals, employee ownership and organisations in which employees are in charge. One such model in which ownership is shared between employees, Government and private sector partners is the innovative pathfinder mutual joint venture, My Civil Service Pension, which provides pension administration for civil servants. Likewise, I go around the country and meet some of the mutual spin-outs from the NHS, where the hon. Gentleman used to work, and the difference when one walks through the door into those organisations is tangible.
Our programme of reform is focused on the citizen and is already cutting out unnecessary cost to help protect front-line priorities. Outsourcing remains an interesting option and one that will offer the best deal in many situations, but it is not the only one, and we are judging every case on its merits.
Written Ministerial Statements
Audit Commission Pension Scheme
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
I want to inform the House of my Department’s intention to provide a guarantee to the Audit Commission pension scheme, ahead of the Commission’s abolition. This statement sits alongside a financial minute I have laid before the House setting out the contingent liability associated with the provision of a guarantee.
The resolution of future arrangements for the Audit Commission pension scheme is an important step in disbanding the Audit Commission. My Department is pressing ahead with plans for the abolition of the Commission and the replacement of the current audit system with a new decentralised regime that will support local democratic accountability and cut bureaucracy and costs. We will introduce the necessary legislation to close the Commission and implement the new audit framework as soon as parliamentary time allows, and intend to publish a draft Bill for legislative scrutiny later this year.
As announced in March, the successful outsourcing of the Commission’s in-house audit practice has already secured significant long-term reductions in audit fees for local public bodies. Working estimates from the draft impact assessment of local audit reforms show that these savings, together with the end of inspection work and the disbanding of the Commission, will save around £650 million over the next five years, compared to costs before reforms were announced. I intend to publish the impact assessment, which will include the detailed workings behind these figures, later this year.
As set out in the financial minute, the Audit Commission pension scheme is a well-funded scheme that will cease to have any active members and close to new entrants when the Commission closes. I am providing a guarantee now to avoid the early crystallisation of pension liabilities, and ensure that the accrued rights of past and present Audit Commission staff are protected.
While it is right that Government stand behind the accrued rights of scheme members, we need to balance this with the financial interests of taxpayers. As the scheme is relatively young and well-funded, I expect there to be no immediate or short-term cost to Government. Subject to future investment returns the eventual cost could be limited, or even nothing if the scheme is able to fully cover its liabilities. Initial results from the March 2011 statutory triennial valuation of the scheme showed that it had assets of £665 million and estimated liabilities of £641 million (104% funded). The guarantee is being granted subject to a number of important conditions, including Government oversight of the scheme’s future investment and funding strategy.
Non-Competitive Government Contracts (Profit Formula)
(12 years ago)
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The Parliamentary Under-Secretary of State for Defence (Peter Luff)
I announced to the House on 26 January 2011, Official Report, columns 10-11WS, that I had asked Lord Currie of Marylebone to undertake a review of the Government’s single source pricing regulations, which include the Government Profit Formula (GPF) overseen by the Review Board for Government Contracts. Lord Currie published his recommendations in October 2011 and they are currently the subject of consultation with industry and across Government. Pending the outcome of those discussions, the review board has been asked to maintain the existing arrangements.
The review board recently completed their 2012 annual review of the Government Profit Formula and has recommended revised allowances. The Government have accepted the board’s recommendations and the updated allowances have been agreed with industry.
The recommendations will be implemented for new single source work in accordance with the arrangements agreed with industry and published in an addendum to the review board’s report, a copy of which will be placed in the Library of the House.
Agriculture and Fisheries Council
(12 years ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
The next Agriculture and Fisheries Council is on Thursday 26 and Friday 27 April in Luxembourg. The Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice) responsible for agriculture and food will represent the UK on 26 April covering the agriculture items. My hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon) will represent the UK on 27 April covering fisheries business. Richard Lochead MSP and Alun Davies AM will also attend.
On 26 April the Council will be debating common agricultural policy (CAP) reform direct payment support schemes for:
a) Young farmers, small farmers, voluntary coupled support and top-cup for farmers in areas of natural constraints.
b) Internal redistribution, active farmer and capping of support to large farms.
On 27 April the Council will be debating the common fisheries policy (CFP):
a) Regionalisation.
b) Transferable fishing concessions.
There are currently two confirmed any other business items: an update on the implementation of group housing for sows, and a report on promotion measures for agricultural products.
Also on 27 April the presidency has invited Fishery Ministers to a lunch to debate “The social-economic dimension of the CFP”.
Justice and Home Affairs pre-Council Statement
(12 years ago)
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The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Justice and Home Affairs Council is due to be held on 26 and 27 April in Luxembourg. My right hon. Friend the Lord Chancellor and Secretary of State for Justice and I intend to attend on behalf of the United Kingdom. As the provisional agenda stands, the following items will be discussed:
The Council will begin in mixed committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states). The presidency will invite an exchange of views by member states and look to agree the road map to ensure coherent EU action on migratory pressures. This item builds on discussions at previous Councils, with the presidency presenting its “road map” setting out strategic priorities, goals and actions to address current migratory pressures on the EU. The UK supports this work to combat illegal flows across the external border and within the EU, including combating fraud and abuse of free movement by third-country nationals.
Next there will be an update on the second generation Schengen information system (SIS II). The UK continues to support the continuation of the current SIS II project. The Commission has committed to deliver the central element of SIS II in early 2013.
The main Council will start with a “state of play” report by the presidency on the Common European Asylum System, which will set out the progress that has been made on the package to date, including the latest on current negotiations. The presidency has been mandated to start negotiations with the European Parliament on the proposals to recast the Reception Conditions Directive and the Dublin III Regulation; some progress has been made in Council discussions the Asylum Procedures Directive, but discussions continue; and the negotiations on the Eurodac Regulation remain on hold due to the majority of delegations supporting the insertion of provisions on access for law enforcement reasons that have not been proposed by the Commission. No discussion is anticipated.
The presidency is seeking to reach a general approach on the EU-PNR directive. The directive provides a framework for the collection and processing of passenger name record data by member states. The Government support this text, which achieves our primary negotiating objective: provision for data collection from flights within the EU.
The Council will be asked to consider its position on the regulation on the marketing and use of explosives precursors in the light of amendments proposed by the European Parliament. The proposal seeks to restrict access by the general public to certain high-strength chemicals that can be used to manufacture home-made explosives. The current draft of the proposal is in line with UK objectives and the Government support presidency efforts to make progress.
Over lunch there will be a discussion on terrorism, including the EU CT co-ordinator, Gilles de Kerchove. The lunch discussion provides an opportunity to share our current assessment of the threat and provide further reassurance around Olympic security. The Council will also be asked to adopt Council conclusions on de-radicalisation and disengagement from terrorist activities. The Council conclusions affirm that terrorism poses a threat to all states, individuals and communities, and seek to promote the exchange of information and best practice between member states on preventing violent extremism and radicalisation. The UK supports this text.
The Council will also be asked to agree Council conclusions on a renewed global approach to migration and mobility. The existing global approach provides the framework for the EU’s external migration policy. We consider the proposed conclusions to be acceptable, and believe they will lead to a more strategic approach, including a strong focus on enhanced practical co-operation.
There will also be a discussion on readmission agreements, with the aim of unblocking negotiations on the EU readmission agreement with Turkey. The Government support the presidency’s intention to finalise that readmission agreement, and believe that this should occur as part of a broader EU dialogue on partnership with Turkey to address issues across the JHA field, including drugs and terrorism, as well as tackling illegal immigration.
The Justice day will begin with a presentation by the Commission of its proposal for a directive on the confiscation of criminal assets, which aims to establish minimum standards in the freezing and confiscation of the proceeds and instrumentalities of crime in the EU. The directive currently includes the inclusion of non-conviction based confiscation powers (which enable the confiscation of the proceeds of crime when criminal conviction is impossible), which is an approach the UK has advocated.
The presidency will seek a partial general approach on criminal sanctions for insider dealing and market manipulation. The proposal aims to establish minimum EU rules concerning the definition of criminal offences for market abuse. The directive complements the broader framework for tackling market abuse, which is provided for in the accompanying market abuse regulation. The UK has not opted in to this directive.
There will be an orientation debate on certain issues for the proposed regulation on mutual recognition of protection measures in civil matters. This will be the first time that this matter has been discussed at Council. The instrument aims to establish an effective recognition and enforcement process of protective/preventative orders among member states and complements the directive on the European protection order in criminal matters. The UK supports the overall policy aim of the proposal and has opted in to it.
There will be an exchange of views on certain issues on EU accession to the European Convention of Human Rights (ECHR). The accession by the EU will mean that the EU and its institutions are directly bound by the convention. This will mean that applicants will be able to bring cases against the EU instead of, or as well as, states which are parties to the convention. The Government are keen to ensure that the accession agreement is both workable and achievable, and meets the needs of the EU and its member states as well as the members of the Council of Europe. In particular the UK is seeking further clarity on what the Union’s internal rules for dealing with the EU’s participation in the ECHR should be.
There will also be an update on the implementation of the European Criminal Records Information System (ECRIS), a computerised exchange system for criminal convictions between EU countries. The ECRIS implementation date is 27 April. The UK expects to implement ECRIS on time.
Under AOB the presidency will provide an update on current legislative proposals and Hungary will provide information to the Council on the remembrance for victims of totalitarian regimes. Hungary is to host this year’s events to commemorate the victims of totalitarian regimes in Europe.
Over lunch, there will be a discussion on “Justice for Growth”, which is the Commission’s term for a range of civil law instruments that it considers will contribute to the EU’s growth agenda.
Asylum and Migration Fund and Internal Security Fund (Police)
(12 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I wish to inform the House that the Government have opted in to the proposal for a regulation of the European Parliament and of the Council establishing the asylum and migration fund (AMF), and the horizontal regulation laying down the general provisions for this fund for the period 2014 to 2020. The decision has been made not to opt in to the internal security fund (police) regulation (ISF police) at this time.
The objectives of the AMF, under the Freedom, Security and Justice heading of the EU budget, is to contribute to an effective management of migration flows in the Union drawing together the capacity building process developed within the current EU migration funds and extending these to cover some aspects of external migration policy under the framework of the EU global approach to migration.
The UK has benefited from participation in predecessor EU funding programmes, in particular in relation to EU migration funding for returns programmes, resettlement projects and community integration projects. The current EU migration funds partly finance our charter flight programmes and have enabled the UK to expand the range of destinations and programme parameters. The UK also has a well established resettlement programme due to the co-financing from the current EU migration funding streams. Without this funding UKBA would not be able to continue the scale of resettlement activity currently undertaken. Furthermore, the current European fund for the integration of third country nationals has become an important source of funding for third country nationals seeking to integrate into British society.
The ISF (police) regulation aims to establish the instrument for financial support for police co-operation, preventing and combating crime and crisis management. The decision not to opt in to the ISF (police) was driven by the substance of the proposal as it currently stands, coupled with the overall need for budgetary constraint in this time of fiscal austerity. The UK sees value in the ISF (police) fund supporting practical action on police co-operation and internal security. However, we have ongoing concerns about the budgetary elements of the programme, in particular given the obligations that will arise from the arrangements for shared management. We need to be absolutely sure that the benefits we will secure from the programme outweigh the cost of participation. We will consider whether to apply to opt in post adoption when the financial commitments win be known.
The horizontal regulation establishes the management procedures for both funds. In concluding that it is in our interests to opt in to the AMF it was therefore necessary to opt in to this measure.
All the proposals remain under negotiation.
Second Reading Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen)
My Lords, before the Minister moves that the Bill be considered, I remind noble Lords that Motions before the Committee will be that the Committee do consider the Bill or the instrument in question. The Motions to give the Bill a Second Reading and to approve the instruments will subsequently be moved in the Chamber in the usual way. I also remind your Lordships that if there is a Division in the House, the Committee will adjourn for 10 minutes.
Trusts (Capital and Income) Bill [HL]
(12 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Office (Lord Henley)
This is a short but technical Bill to amend the law of England and Wales relating to capital and income in trust. Capital, for these purposes, is trust property that constitutes a pool or fund of assets, and is to be distinguished from the income earned on those assets. For those who remember their Bar or solicitor exams, the distinction has traditionally been illustrated by the homely metaphor of a tree and its fruit. The tree is the capital—for example, an office block or shares in a listed company—and the fruit is the income—for example, the rent received from renting out the offices or the dividend paid on the shares.
Before turning to the substance of the Bill, I would like to say that I am very pleased to be presenting it today, although with considerable trepidation. I know that it should be my noble friend Lord McNally, who is otherwise engaged in the Chamber; he is the Minister in the Ministry of Justice who is responsible for the Law Commission and he has been a great supporter of the Bill. He is disappointed not to be able to be here, but I can assure the Committee that he will be available at later stages of the Bill.
I also know that several noble Lords present today have had the advantage of attending a briefing on the Bill by Professor Elizabeth Cooke, who is the Law Commissioner responsible for the Bill, and Stephen Roberts, who is head of litigation and legal policy at the Charity Commission. I regret that I was unable to attend that session but have had the advantage of a private tutorial from Professor Cooke and Mr Roberts to prepare me for our debate today. Otherwise I would have had to rely on my lecture notes, if they still existed, from Bar exams some 35 years ago.
The Government are very grateful to the Law Commission and the Charity Commission for all the help they have given in the preparation of the Bill for introduction and their continuing support for the Bill as it goes through Parliament.
The Bill will implement, with minor modifications, the legislative reforms recommended by the Law Commission in its 2009 report Capital and Income in Trusts: Classification and Apportionment. These reforms owe their genesis to concerns expressed by various noble Lords, including the noble Lord, Lord Phillips of Sudbury, during debates on the Bill that became the Trustee Act 2000. This led to the publication of a Law Commission consultation paper in 2004 and the Commission’s report in 2009. The Ministry of Justice then carried out a public consultation in 2010 on the draft Bill published by the Law Commission in its report and published a response in 2011 explaining how it intended to finalise the Bill. This extended process of detailed and responsive consultation has, I believe, created a measure with a large degree of consensus, which is suitable for this special Law Commission procedure in your Lordships’ House.
The overall aim of the Bill is to simplify three distinct but linked areas of trust law in England and Wales relating to capital and income. These areas are apportioning receipts between income and capital beneficiaries; classifying receipts by trustees as income or capital; and investing by charity trustees who, in deciding what investments to make, have to distinguish between investments that will produce income on the one hand and investments that will produce capital on the other.
I will start with the first point addressed in the Bill, the rules of apportionment in Clause 1. They deal with apportioning trust receipts between income and capital beneficiaries. For example, a trust—let us call it the AB trust—may be established by a person making a gift of investments on trust for person A for life, with remainder to person B. This means that the trustees will pay the income arising on the investments to A until A dies, and then transfer the investments to B. Because of the different entitlements to income and capital, the trustees must distinguish between investment receipts according to their legal classification as income receipts due to A, or capital receipts which must be held ultimately for B and can be invested to produce income for A during his or her life.
As noble Lords will remember, in the 19th century various cases came before the courts in which the judges had to decide how to split receipts in this way. Sensible though the decisions were in their time and circumstances, the application of some of them as general rules of trust practice is now problematic.
Clause 1 therefore disapplies for new trusts the first and second parts of the rule in Howe v Earl of Dartmouth, the rule in Re Earl of Chesterfield’s Trusts and the rule in Allhusen v Whittell. This means that in the absence of express provision in a new trust, these rules will not apply and the relevant receipt will belong in its entirety to the income or capital beneficiary, depending on its classification as one or the other. This will bring new trusts into line with modern trust drafting practice, which almost always excludes these rules in the document setting out the terms of the trust. This will simplify the administration of trusts without any loss in fairness. Clause 1 also disapplies for new trusts the statutory rule requiring the apportionment of income over time imposed by the Apportionment Act 1870.
The reforms effected by Clause 1 will mean that complex and time-consuming calculations, generally affecting relatively small sums of money, will be avoided.
The changes in Clause 1 are restricted to new trusts so that there is no interference with the intention of settlors, who may have wished the existing law to apply.
Clause 2 amends the law relating to the classification for trust law purposes of specified tax-exempt distributions by companies on demerger for all trusts. This is relevant because trustees holding shares in a company which demerges may receive a dividend in the form of a distribution of shares which represent an equivalent stake of ownership in the demerged company. The clause provides that, unless the trust specifies to the contrary, all the distributions falling within Clause 2 will be treated by the trustees for the purposes of the trust as capital. At present, rather confusingly, this is only the case on indirect demergers.
The distributions to which Clause 2 applies are those that are tax-exempt under Sections 1076, 1077 and 1078 of the Corporation Tax Act 2010 and, in the future, those that are tax-exempt and are specified by an order made by statutory instrument by the Lord Chancellor. No such order is envisaged at present.
In practical terms, Clause 2 will move the classification of dividends received by trustee shareholders on direct demergers from income to capital, and will secure that classification for dividends on indirect demergers, which currently rests on a decision of the High Court. As a result of the Bill, all distributions received by trustees on tax-exempt corporate demergers will be classified as capital for trust law purposes. This will remove not only the potential injustice to capital beneficiaries of seeing significant proportions of the capital holding of the trust assets converted to income by reasons beyond the control of the trustees, but also the pressure on trustees to sell investments in companies proposing demerger purely to avoid the outcome of the present inconsistent classification.
Demergers may be structured by companies in a variety of ways. In some cases of demerger, where Clause 2 applies to classify the distribution as capital, the company may have held off paying the usual dividends pending the demerger. The income beneficiary may then be unfairly disadvantaged because dividends that would have been income in the normal course of events have not been paid and the receipt on the demerger is classified as wholly capital. To prevent Clause 2 perpetuating this problem, Clause 3 gives the trustees power to compensate the income beneficiary from the trust capital. We do not expect that this power will be exercised often but we believe it is necessary in the interests of fairness.
That brings us to Clause 4, which relates to investment by charities with a permanent endowment on a total return basis. Before describing the working of the clause, I will briefly explain the meaning of these two concepts.
First, there is permanent endowment. A charity has a permanent endowment if its constitution places restrictions on the expenditure of property held for the purposes of the charity. Typically, a permanent endowment will be a capital sum donated for charitable purposes on terms that the income it generates may be used for those purposes, but the capital itself must remain untouched to create more income for the future.
Secondly, there is total return basis. Total return investment involves the charity trustees selecting investments on the basis of risk and return, and then spending an appropriate proportion of the total return, irrespective of the form individual returns take, as capital or income. As a result, the trustees are not constrained in their investment choices by the need to generate income returns and can select appropriate investments in the same way as the trustees of charities that do not have permanent endowment.
It may be helpful to illustrate this by way of an example. Let us assume that there is a charity set up to help homeless people, with a permanent endowment of £100,000. At present, the trustees must decide how much expenditure they think is appropriate and then set up an investment strategy to try to achieve it. For example, they might invest in a portfolio of fixed-income investments and shares that they anticipate will produce £2,000 a year. Whatever income that portfolio actually produces is expendable on the charity’s objects; the capital cannot be spent. That is the case even if the portfolio performs below expectations or some returns unexpectedly take the form of capital. In those circumstances, trustees today either face an income shortfall which could jeopardise their planned operations or have to undertake a process to enable them to spend some of their permanent endowment.
Under total return investment, the charity trustees do not have to anticipate expenditure when making investments. Instead, like trustees who do not hold permanent endowment, they can invest in a portfolio which balances risk and return, ignoring the form of returns. The trustees are then able to allocate a fair proportion of the eventual total return to expenditure, whether the investment receipts in question would be classified for trust law purposes as capital or income.
Total return investment is not a new concept. Charity trustees can already apply to the Charity Commission for authority to adopt it and a small number have done so. Clause 4 provides a new framework for obtaining that authorisation. Instead of making an application, charity trustees with a permanent endowment will be able to opt in to this type of investment on the terms prescribed by regulations to be made by the Charity Commission by resolution, if the trustees consider it is in the best interests of the charity to do so. This new administrative approach will reduce the costs of embarking on total return investment for both charities and the Charity Commission.
The change will enable charity trustees responsible for a permanent endowment to bring themselves broadly into the same position in relation to investment decisions as charity trustees without a permanent endowment. This will allow them to invest in the same way as other trustees in accordance with their duties under the Trustee Act 2000 and the trust instrument.
The detailed terms on which total return investment can be pursued will be determined by the regulations to be made by the Charity Commission. The regulations will be finalised only after the Charity Commission has carried out a consultation, which it intends to do after the Bill has been enacted.
Lord Phillips of Sudbury
My Lords, I endorse the commendation of my noble friend Lord Henley for the work of the Law Commission. It is one of the unsung heroes of the forest of the law and, within it, it is a true forester.
It is particularly warming to know that the report upon which this Bill is based is but three years’ old, which, in terms of this kind of legal reformation, is but a twinkling of an eye. Indeed, the Minister said that the reform vis-à-vis the fruits of demergers was partly in the Bill to rectify the fact that as the law presently stands only indirect mergers are, so to speak, saved, and now direct mergers will be in the more flexible regime.
It is perhaps amusing to remind the Committee that the ruling to which the Minister referred which enabled indirect mergers to result in the apportionments that the court decided was given in the case of Bouch and Sproule, which was no less than 125 years ago. So spreading the benignity of Bouch and Sproule has taken rather than longer than some of us would have wished.
I also cannot resist a nostalgic view of this debate. The Minister talked of his time at the Bar. My earliest days in the law were spent studying trust accounts in 1958. The very cases to which he referred—Howe v Earl of Dartmouth, Allhusen v Whittell and Re the Earl of Chesterfield’s Trusts—are names that adorn the wall of my lavatory. Incidentally, I think Howe was a predecessor of our dear friend, the noble Earl, Lord Howe. They are some of the most complex, arcane, time-wasting and lawyer-infested rules that still apply in our world. Therefore, this is a happy day and I have little to say apart from expressing happiness, except for two points.
The first relates to the drafting of Clause 3. As the Minister clearly described, this provision gives trustees the power to compensate income beneficiaries when there is a direct demerger. I am well briefed on this point by the Law Society, which has a committee to look at such things that is comprised of horny-handed practitioners. They and I feel that subsections (1), (2) and (3) could be more clearly drafted. The particular point that exercises us is that exactly what the trustees are empowered to do is not as clear as it could be. That is, what is the nature and extent of their discretion? Is it an absolute or a qualified discretion? The language of the three subsections states, for example, “the trustees are satisfied”, “the trustees may” and “the trustees consider”.
It is perhaps unfair to ask the Minister to comment on these matters instantly, but after today I hope we will at least consider the potential improvement of three quite difficult subsections. We do not want to put trustees—who, let us not forget, are nearly all volunteer trustees—into a position whereby some aggressive beneficiary or potential beneficiary could try to sue them over the way in which they have exercised the power given to them by this clause.
My second point concerns the Charity Commission, which is extremely useful. At present, for many charities that have permanent endowment—which more have than some realise—it is a real palaver to apply to the commission for an order, and for that order to be considered, made and executed. A great deal of time, effort and expense is wasted because of that state of affairs. It is therefore extremely beneficial and has no down side at all that the Bill will allow the commission—if it so wishes, as I am sure it will—to make regulations that will enable all charities in the future to make provision vis-à-vis endowed property, without applying formally for an order from the commission.
With those few remarks, I thank the Government and all those involved for bringing forward an arcane but none the less very important and practical set of proposals that will make more of a difference than many realise.
Lord Hodgson of Astley Abbotts
My Lords, I am afraid that I am not a barrister or a solicitor and so the Earl of Chesterfield and Howe versus the Earl of Dartmouth do not adorn my lavatory walls—or, indeed, have not, until now, swung into my ken.
I welcome this small, technical but important legislation and I wish to address particularly the charitable aspects covered by Clause 4. I declare my interests, which are on the register in your Lordships’ House: I am president of the National Council for Voluntary Organisations; chairman of the Armed Forces Charity Advisory Committee; and I have been appointed by the Government to review the Charities Act 2006.
The existence of permanent endowment, as my noble friend clearly explained, has caused trustees of charities with permanent endowment a great deal of difficulty. If you force trustees to consider primarily the form in which they will get their return, you will get a series of artificial distinctions. By investing the capital gain—as opposed to dividend income or interest—you may end up with a seriously suboptimal result.
In recent years, a number of investment opportunities have arisen that are for capital gain only, particularly in the world of private equity. Where you are able to invest in smaller companies your return will almost certainly be in the growth of the value of the company. These companies cannot—and probably should not—pay dividends because they need to retain their profits to grow the business. It is therefore very important that this flexibility is built in to charitable investment.
As I understand it from my noble friend, this, of course, does not remove from trustees—I am sure that it does not—the need to balance future capital appreciation against the need to run the charity in the mean time, and, of course, the need to balance risk and return, which still applies as if these provisions had not been made. I welcome these proposals on the grounds that they are deregulatory and will free individual charities with permanent endowment and the Charity Commission from some administrative work.
As I understand it—and my noble friend Lord Phillips will correct me on this because he has forgotten more charity law than I will ever know—the right of the Charity Commission to make regulations on this matter has been in some dispute. Some lawyers have questioned whether it actually has these powers. The commission’s powers are, of course, open to challenge, as we saw with the public benefit test considerations last summer.
I have a further point of concern which the Committee may wish to explore. I have described the Bill as deregulatory, but in proposed new Section 104B (1), (2) and (3) there is a list of regulations. If, as I am sure my noble friend will tell me, the normal duties of trustees apply, do we really need to have this extensive list of regulations? Are we not able to trust the trustees? For example, proposed new Section 104B(2)(c) would require charity trustees to,
“notify the Commission of the passing, variation or revocation of such a resolution”.
That takes us back almost to where we started because, if resolutions are made in that way, they will have to be sent to the Charity Commission, the only difference being that the Charity Commission will not have to give its permission. I flag that up as a possibility we might wish to explore later.
I have given prior notice that I would like my noble friend to address the specific issue of the special position of English cathedrals under this legislation. The Church Commissioners and the Association of English Cathedrals are anxious to make a small amendment to Clause 4 which would enable cathedrals to resolve to invest their permanent endowment on a total return basis in accordance with the regulations which the Charity Commission is going to make. This comes about because ecclesiastical corporations are specifically excluded from the definition of a charity in Section 10 of the Charities Act 2011, which means that the powers of this Act do not apply to them, nor will the powers to be conferred by proposed new Sections 104A and 104B.
However, the relevant bodies corporate which are now established for each cathedral under the Cathedrals Measure 1999 exist for exclusively charitable purposes and are therefore charities for the purposes of the general law.
In recent years a number of cathedrals have expressed increasing interest in a total return investment, as the requirement to generate income from their permanent endowment is distorting their investment decisions. Cathedrals, of course, as ancient institutions, have more permanent endowment than most. Access to the total return investment allows for a more strategic portfolio of investments, which will provide a better balance between the needs of current and future beneficiaries. I hope that my noble friend, either now or at a later stage of the Bill, can address that point.
I described this earlier as a small, technical but important and welcome measure. However, it is only the first in a series of changes that need to be made if we are to realise the full value and potential for social impact investment. It does not, for example, address the issues or challenges arising from mixed-motive investment, a practice which is very close to total return investing. Mixed-motive investments are made by trustees on the basis partially that they are financial investments, and partially that they are programme-related investments. Programme-related investments are made to advance the charity’s purpose and are not considered to be financial investments at law.
I will give the Committee a brief example of how this might work. A charity which aims to improve educational opportunities and address homelessness invests in a property fund that will invest in properties for social enterprises. The fund focuses investments around three areas of social impact: homelessness, education and community development. Based on conversations with their fund manager, the trustees assess that 60 per cent of their investment can be justified as a programme-related investment that furthers their social mission. They decide that the remaining 40 per cent must be justified as a financial investment. Conversations with their investment advisers indicate that a commercial return on this sort of investment should be, say, 15 per cent per annum. To justify their investment, the trustees decide that there must therefore be a commercial return of 40 per cent and that they must get back the remaining 60 per cent in their PRI investment. When you blend the whole thing together, you have a return across the whole piece of 6 per cent. You can see how close this balanced rate of return is to the whole idea of total rate of return; it is very close indeed. It is a sadness to me that we have not been able to grasp this particular issue and extend this Bill by a series of small amendments to take in this additional way in which charities are now seeking to invest.
If I could glance over my noble friend’s speaking notes, I am sure that the answer to this will be, “Resist this”. It will be resisted because mixed-motive investment might be considered controversial—this is a Law Commission Bill—and because the Law Commission has not consulted on this precise point. Law Commission Bills are invariably consulted on in every aspect.
If that is my noble friend’s answer—and I am sure that it is going to be, but I may as well try—it would be helpful if he could give some indication during the later stages of the Bill whether his department has it in mind to bring forward ideas to tackle the mixed-motive investment as part of the overall approach to social investment.
Social impact investment is coming of age. It is a strategic issue for this country. However, there is a real danger of the necessary legislative changes required to facilitate it falling between departmental stools. My noble friend’s department, the Ministry of Justice, is producing this important but modest measure, yet not tackling other critical issues. The Law Commission will consult this autumn on further charity law reforms, but seems unlikely to tackle the necessary innovative leading edge issues.
The Financial Services Bill, at the Committee stage, is deeply depressing reading. I invite the Minister’s officials to look at the proceedings of the eighth sitting on Thursday 1 March, where attempts were made to raise the social impact investment idea. The amendments themselves were wrong; they were not acceptable. However, the Minister’s reply—it was Mark Hoban—indicated the dead hand of the Treasury across the whole of this area, still thinking in conventional investment terms of invested protection, whereas social impact investment melds financial and social return. It is not an investment for everybody, but the present situation, whereby one can easily give money to a project, but find it difficult to lend money to it, must be counterintuitive. People will be more encouraged to support these leading-edge charities and voluntary groups if there is a prospect of them getting their money back. That might encourage them, if they are successful, to put more money into the next project.
The Government have laid great stress on the need to create innovative ways of financing charities and voluntary groups that are seeking to tackle some of these most deeply entrenched social problems in our society. I hope that somebody, somewhere, in Whitehall is getting a grip of these various separate legislative proposals to ensure a proper degree of co-ordination and impact. The statutory stars are in alignment at the moment with all these pieces of legislation around, and it would be a great opportunity missed. Indeed, strategically, from the country’s point of view, it is a chance to make London the world centre of expertise for this rising and new activity.
Lord Wakeham
My Lords, I rise briefly to support my noble friend on these proposals. First, I should declare an interest as a trustee of a substantial charity, which at the moment does not operate a total return investment policy but I am pretty sure would want to do so in the future. I could not help smiling at my noble friend Lord Phillips, because I too have enjoyed being here with the nostalgia of thinking of all the time I wasted as a young man learning about Howe v Earl of Dartmouth, Allhusen v Whittell and all of these cases, which are from many years ago so far as I am concerned.
My concern is a relatively simple one. I am perfectly content with what is being proposed, but recognise that all these things take quite a long time. As the Minister said, the Charity Commissioners have for a number of years now operated a scheme on a one-off basis to deal with cases that came forward, for suitable charities, where they allowed a total return investment policy to happen. I am concerned that there should not be a delay between that system and the new system, bearing in mind there has got to be consultation, regulations have to be drafted and implementation has to take place. I would like the Minister to be able to tell me that the existing system of the informal but important way the Charity Commissioners have worked in the past will continue to operate until the new system, with consultation and everything else, has been finalised. There should not be a gap when neither the old nor the new system is in operation for charities that wish to adopt this total return investment policy. When you stop and think about it, for the appropriate charities, it is very hard to consider a trustee is doing his job properly today if he does not think in terms of that. That is the only consideration I have and I hope that my noble friend can give me some encouragement on that point.
Lord Higgins
My Lords, I am in no sense an expert in this area, but over the past two or three years I have been involved in negotiations with the Charity Commission. I certainly join with those who have expressed appreciation to the Law Commission for its work on this. I think I have only on one previous occasion had a debate in this Chamber on one of its reports. Am I right in thinking that this does not go to the Commons at all and is dealt with exclusively in your Lordships’ House? I was not clear about that.
I also pay tribute to the way the Charity Commission has handled the particular negotiations in which I have been concerned. I understand it is being quite severely affected by the cutbacks but it managed to get through these particular negotiations before that had too serious an effect.
I will raise only some very simple points. The explanation given by the noble Lord, Lord McNally, points out that the four burdensome 19th century rules requiring apportionment between capital and income, which are described so adequately in the Explanatory Memorandum, will be renewed for new trusts. My very simple question is: will it apply only to new trusts, or can existing trusts make arrangements to take advantage of the changes as well?
The Explanatory Memorandum draws rather a charming analogy with trees and the fruit of trees. In the trust about which I am concerned, we had considerable problems over whether to regard a particular asset as income or capital. In addition to the original trust being set up, it was then given the royalties from a particular operation and was therefore continually topped up in this way. This gave us considerable problems in deciding whether that should be regarded as capital or income. However, it will be very helpful overall if time and costs can be saved by the Charity Commission making regulations, rather than people having to apply on a case-by-case basis, as is the present position.
The Minister’s letter has a final line which states that the Bill is expected to be beneficial to small firms and micro-businesses. I am rather puzzled as to how that will be the case but no doubt the Minister can explain.
Lord Beecham
My Lords, I join other noble Lords in congratulating the Minister on the clarity of his exposition of this intrinsically complex area, and in congratulating the Law Commission on producing the report. As the Minister reminded us, the process began eight years ago, so it has not quite reached the proportions of Jarndyce v Jarndyce. The commission has certainly done a thorough job.
My acquaintance with the rules of apportionment began with my law degree and effectively ended with the solicitor’s final examinations to which the noble Lord, Lord Phillips, referred, save that I learnt to take the precaution of ensuring that the rules were excluded from any will I subsequently drafted. Of course, that will now no longer be necessary. It will be a case of opting in rather than opting out, for which the commission and the Government should certainly take credit.
This afternoon I find myself visited by a slight sense of déjà vu. Many years ago I found myself acting in a divorce case and waiting for my case to be called on behalf of my petitioning client. I sat next to the counsel in the preceding case, a delightful if somewhat eccentric individual. For the avoidance of doubt, it was not the Minister on that occasion. At one point counsel turned to me and said, “Mr Beecham, where is the petition?”. I had to reply, “I am not instructing you”, to which he replied, “I know, I know, but where is the petition?”. Around three weeks ago, my noble friend Lord Bach said to me, “You are to be in charge of this Bill”. It was a visitation that was quite unlooked for. Nevertheless, I am here today to represent the Opposition on this matter and to welcome the simplification that the Bill embodies, in relation to both the rules of apportionment and, in particular, the position in respect of charities and the question of total return. I declare an interest as a trustee of the Trusthouse Charitable Foundation, which already operates a total return policy.
The noble Lord, Lord Phillips, referred to the Law Society briefing, for which I am very grateful. The Law Society is a body to which President Kennedy’s memorable injunction is often thought by solicitors to apply: “Ask not what the Law Society can do for you, but what you can do for the Law Society”. On this occasion, the Law Society has done us all a service in a briefing that contains the recommendations that the noble Lord, Lord Phillips, referred to in respect of Clause 3, where it suggests a new subsection and some clarification. I hope that can be shared with the Minister following this Second Reading, if he has not yet seen those proposals. They seem to make sense in exactly the way that the noble Lord, Lord Phillips described.
Other of your Lordships have made points particularly in relation to the position of charities and, in the case of the noble Lord, Lord Hodgson, in respect of cathedrals. Those matters seem to be worth pursuing. I had the same question in my mind as the noble Lord, Lord Higgins, about whether it is necessary to include a reference to existing trusts in the Bill. That is a matter that I am not qualified to make a judgment about, but it might usefully be considered, because if it is not currently possible for existing trusts to modify the rules then it would seem that they ought to be given that opportunity. They would not have to take it but it might be relevant. That is perhaps, again, a matter that we could return to in Committee.
In principle, and so far as the thrust of this short Bill is concerned, we are completely at one with the Government and look forward to concluding this matter rapidly for the benefit of trustees, beneficiaries and charities.
Lord Phillips of Sudbury
My Lords, I should have declared an interest earlier, which I need to do now. I am the founder of, and am still a consultant to, a firm of charity lawyers, Bates Wells & Braithwaite. I should have said that and apologise for not so doing. I will not enumerate the charities of which I am a trustee.
Lord Henley
The Committee will be grateful to the noble Lord for that declaration of interest.
I start by congratulating the noble Lord, Lord Beecham, on being the first speaker in this debate to mention Dickens, in this bicentenary of his death. I was wondering how long it would be before Jarndyce v Jarndyce appeared, and assure him that I was about to mention it. Although the noble Lord says that this has been only eight years in gestation, as my noble friend Lord Phillips put it, if we go back to a case that I was not familiar with but which is no doubt up on the wall in the noble Lord’s lavatory, Bouch v Sproule, that was some 125 years—so it has been going on for a considerable amount of time.
I hope to deal with some of the points that have been raised, but give an assurance to the House that this is the beginning of proceedings. We have rather a good form of procedure before us for these Law Commission Bills, which will allow this Bill to be properly scrutinised later on in Committee. Another place will also scrutinise the Bill properly—as it always does—in due course. I am sure we do it slightly better, but another place will have its role to play. I can give that assurance to my noble friend Lord Higgins—this is not some odd procedure whereby the Bill comes only to this House. It will go to another place in due course.
The first point that came up was raised by my noble friend Lord Phillips about Clause 3 and the discretion that is available to the trustees. What qualification was there for that discretion and might there be some alarm among trustees about whether they could be liable for how they exercise it?
I say to my noble friend that the Bill has so far been very carefully constructed. It has been looked at by many people of much greater erudition than me and, possibly, of even greater erudition than my noble friend. They have taken these points into consideration but the great advantage of this procedure is that we can look again as the Bill goes through the House. It is certainly something to which my noble friend might want to come back in Committee when we get to that stage, at which point our mutual noble friend Lord McNally will be dealing with the Bill for the Government. It will be a matter for that Committee.
Lord Phillips of Sudbury
Can I take it that the Minister will be happy for consultation with his officials to take place on this matter?
Lord Henley
Obviously, we are always more than happy for there to be consultation before, during and whenever to deal with these matters. They ought to be looked at and that is how we get the right result in the end on all Bills. It is something that we would more than encourage. I am sure the noble Lord will be in touch with the officials, and that he has already spoken to them, the Charity Commission and the Law Commission at some stage.
I move on to my noble friend Lord Hodgson’s concerns about whether the regulations in Clause 4, particularly the total return investment regulations in new Section 104B, will be too restrictive. Again, this is a matter that we will need to look at in some detail. However, it is a matter that the Charity Commission should be able to get right following consultation. I am certainly confident that it will strive to ensure that the regulations achieve just the right level of trusting the trustees to get things right and protecting charity funds. It is a matter that I hope the House will look at in detail.
I understand my noble friend’s concerns about English cathedrals and that he raised the matter at the Peers’ briefing in March. As a result of ongoing discussions at official level between the Ministry of Justice, the Law Commission, the Charity Commission and the Church Commissioners, they are all looking at the issue. In essence, the Association of English Cathedrals, which represents all the corporate bodies of our 42 cathedrals, has asked that Clause 4 be extended to include the cathedrals in its scope. The association considers that this would benefit the 20 or so cathedrals that have permanent endowment. That would put those English cathedrals on the same footing as the Welsh cathedrals. However, unlike cathedrals in Wales, cathedrals in England are not subject to the general regulation of the Charity Commission. The Government will consider the request from the Association of English Cathedrals carefully, but at present no final decision has been taken.
I cannot remember whether it was on this issue or another that my noble friend speculated as to whether the word “Resist” appeared in my briefing. I can assure him that it does not, although it might appear later as we discuss these matters further. However, this is not really a matter for the Government to resist; it is a matter for all of us to make sure that we get right. Again, I stress that this is not a government Bill; it is a Law Commission Bill, which we are ensuring gets on to the statute book.
My noble friend also asked about social impact and mixed-motive investment. The Government acknowledge that social or mixed-purpose investment is a highly important issue and are grateful to the noble Lord for drawing attention to it, both today and as part of the work of his ongoing review of charity law. The Government’s ambition is that social investment should become a major source of finance for the social sector. To this end, the Cabinet Office’s social investment team is working with other government departments to make this vision a reality. Social or mixed-purpose investment did not, however, form any part of the Law Commission’s work on capital and income in trusts and therefore has not been included in the Bill, by the Law Commission in its report or by the Ministry of Justice in its consultation. Therefore, at this stage we would not want to see anything further added.
I have already dealt with the question from my noble friend Lord Higgins as to whether the Bill will go to the Commons. I can give that assurance. My noble friend also asked whether it will apply only to new trusts, which I think was a question also raised by the noble Lord, Lord Beecham. I can give an assurance that the reform is prospective only. We believe that retrospective interference with existing trusts could frustrate the intention of the person who created the trust, contrary to the general principles of trust law. However, as the noble Lord, Lord Beecham, reminded us, in any drafting of trusts that he has been doing over the last however many years, he has been excluding the rules in Howe v Earl of Dartmouth and others, just as, I imagine, most practitioners have been doing.
My noble friend Lord Higgins also asked about the letter and whether there was going to be any effect on small and medium-sized businesses. We believe that it is unlikely to have a major effect on small and medium-sized enterprises. However, the impact assessment published by the Ministry of Justice states:
“While a reduction in the complexity of the current legal rules may lead to a very marginal reduction in trust related business for small legal firms and trust service suppliers, this is expected to be more than offset by reduced costs for trusts. Small legal firms and trust service suppliers may also benefit from additional business if there is an increase in the number of charities operating total return investment … We do not consider that the Bill is likely to have a disproportionate impact on the operations and performance of small businesses compared to others”.
Lord Higgins
I am still slightly puzzled about this. It says that the Bill is expected to be beneficial to small firms and micro-businesses. Does it mean small legal firms? The idea of a small legal micro-business strikes me as a little unlikely, so I do not understand how it affects small businesses and micro-businesses.
Lord Henley
My Lords, I had better look at the letter more carefully myself in due course and write to my noble friend to deal with that point.
My noble friend Lord Wakeham talked about the possibility of delays of the sort one finds in law, which no doubt provided the noble Lord, Lord Beecham, with his opportunity to bring in Jarndyce v Jarndyce. I hope that there will not be undue delay in dealing with this, but I can certainly give him an assurance that there will not be the gap that he was talking about. We will continue with the old system until we have the new system.
Lastly, I will correct a point that I made earlier, when I said that this was a Law Commission Bill. I must make it clear that it is actually a government Bill. However, the Government recognise that it is uncontroversial and that it has been put forward by the Law Commission; it can therefore continue through Parliament under this special procedure, which I think is appropriate for Bills of this sort.
I hope that I have dealt with most of the points. I will look carefully at what I have said in due course and if necessary write to noble Lords to deal with any points that I have missed. I commend the Bill to the Committee.
Grand Committee
Public Bodies (Abolition of Courts Boards) Order 2012
(12 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of Courts Boards) Order 2012.
Relevant documents: 53rd Report from the Merits Committee, 41st Report from the Joint Committee on Statutory Instruments.
The Minister of State, Home Office (Lord Henley)
My Lords, the purpose of this order is to abolish 19 courts boards across England and Wales. The order provides for abolition with no transfer of functions. Before addressing the order I will give some background on courts boards and their proposed abolition.
In 2010, the Government announced a review of all public bodies which aimed to increase transparency and accountability, cut out duplicated activity and discontinue unnecessary activities. In conducting reviews, departments were asked, first, to address the question of whether a body needed to exist at all. In the case of courts boards, the Ministry of Justice considered that the answer was no. This view reflected that of the previous Administration, who announced in March 2010 their intention to close courts boards. The abolition of courts boards was therefore listed in the Public Bodies Bill which received Royal Assent in December 2011.
Courts boards were established in 2003 with a remit relating to the Crown Court, county courts and magistrates’ courts. They do not manage or administer the courts themselves but advise HM Courts and Tribunals Service to improve its service. Courts boards were established partly because there was a fear that magistrates’ voices would be lost within a unified courts system. However, their role has diminished in recent years as other structures are now in place to ensure magistrates’ views are heard. Locally, there are strong relationships with magistrates’ Bench chairs and, nationally, views are represented by the Magistrates’ Association and the National Bench Chairmen’s Forum.
Another function of courts boards is to ensure that the voices of local community court users are heard. However, amalgamations within HM Courts and Tribunals Service areas have reduced courts boards areas from 42 to 19 in recent years, diminishing their ability to represent the whole community. While the Ministry of Justice fully recognises the need to respond to local needs, the Committee should recognise that it is not trying to recreate a like-for-like structure in place of what it is abolishing. One reason for reforming public bodies is to make necessary savings, and this could not be achieved by simply filling the gap with something similar, especially where functions are duplicated. Abolishing courts boards will save the public purse approximately £450,000 per year. Given their reduced role over recent years, retention cannot be justified in the current financial climate.
The proposal to abolish courts boards was included in a public consultation published in October 2011. Of the 23 responses received, seven were in favour of abolition, three were neutral and 13 were against. Arguments against abolition focused on concerns around the loss of a body to oversee Her Majesty’s Courts and Tribunal Service’s performance from a local perspective. As I will discuss, there are other ways in which these local voices can be heard. Those in favour of abolition agreed with the Government’s view that HMCTS is capable of addressing the gaps left by abolition. The department found no compelling argument within this consultation to change its proposal.
The order was laid on 31 January. Orders under the Public Bodies Act have a minimum 40-day scrutiny period, with a committee of either House able to extend this to 60 days by resolution if it feels it necessary. This order been scrutinised by several Select Committees within Parliament: in this House, the Merits of Statutory Instruments Committee; in the other place, the Justice Select Committee; and, collectively, the Joint Committee on Statutory Instruments. None of these triggered the optional 60-day extended scrutiny period.
The Merits of Statutory Instruments Committee reported on this order on 16 February, having requested supplementary information. The committee specifically asked the Minister to address several questions during the debate. On his behalf, I will now take these point by point. First, the report asked that the other avenues that could perform the same functions as courts boards should be more fully articulated, in order to support the assertion that courts boards’ functions are being duplicated. Courts board representatives can have their views heard through structures such as justice issue groups, area judicial fora, local criminal justice boards, victims and witnesses subgroups, and court user groups.
There are also strong local relationships between HMCTS and local magistrates’ Bench chairmen. Additionally to these groups, Section 21 of the of the Courts Act 2003 requires the Lord Chancellor to ascertain the views of magistrates on matters of relevance to them. This will of course continue after courts boards have been abolished. As for engagement with members of the public, courts already use a variety of methods to engage with their local communities, such as open days, open justice week, representation at local community meetings, customer satisfaction surveys and mock trials. These methods provide more direct engagement with local communities than courts boards do. Members of the community may also air their views through direct communication with their courts, writing to the relevant Ministers via their MPs or by responding to consultations.
I turn to the second point that the report requests be addressed specifically, that of giving reassurances about what provision will remain to monitor and influence how court services are tailored to the needs of the local areas. The Ministry of Justice remains committed to preserving the links between courts and local communities. Under the new agency framework, HMCTS regions will be encouraged to explore local options suitable to them, such as making more effective use of court user meetings, to engage the wider community in improving service delivery. This idea is already being developed in one HMCTS area and initial best practice has been circulated to other areas.
Furthermore, delivery directors and jurisdictional leads are working with the judiciary, stakeholders and other agencies to deliver a joined-up justice system that is responsive to the communities it serves. Further plans are being developed that will promote more direct engagement with communities. Neighbourhood justice panels are just one example of this. These panels will, through community volunteers, involve communities in finding restorative and reparative solutions to anti-social behaviour and low-level crime.
The department is also committed to increasing the transparency of the justice system in order to encourage better engagement with the public and enable citizens to hold services to account. This will, among other measures, allow for the release of various data with contextual information to promote public understanding of the justice system. This has already begun. For instance, earlier this year, the department published timeliness data for courts on the open justice system website, allowing users to see how their local court is performing.
The Ministry of Justice has taken on board the views of the Merits Committee and would like to thank it for its thorough reporting. Courts boards are an advisory non-departmental public body whose role has greatly diminished in recent years. Their functions can now be carried out in other ways. The Ministry of Justice remains committed to improving courts’ and tribunals’ performance and to listening to the local community. The department will continue to do this in the future, through the other means I have laid out today.
However, in the current financial climate, it is right that duplicated functions across government should be removed. As I said earlier, abolishing these boards will save around £450,000 per year. I therefore commend this order to the Committee and beg to move.
Lord Beecham
My Lords, again I thank the Minister and congratulate him on his very clear exposition of this order. I indicate at the outset that, as in the House of Commons, the Opposition do not in any sense oppose the proposals.
However, although the Minister has rightly referred to issues raised by the Merits Committee, it should be noted that, as well as raising individual issues, the committee expressed some concerns about how the whole process had taken place. In particular, in relation to the explanatory document, paragraph 13 of the Merits Committee report points out that both the Magistrates’ Association and the Law Society thought that the current system was better than nothing. The Government have made a judgment on that and I do not necessarily quibble with it. The Merits Committee came to this conclusion:
“On balance the low number of consultation responses would seem to support the Government’s view, that Courts Boards are not operating particularly effectively”.
However, it also pointed out that while the,
“Explanatory Document suggests that other existing avenues may perform the same function better”,
that would need to be articulated “more fully in debate”. Up to a point that has happened in another place and here today, but it did not happen unprompted. Similarly, on the impact assessment, the committee pointed out that,
“in order to demonstrate compliance with the statutory tests”—
departments—
“should, as a minimum, include in the ED a clear statement of the factors that have been included in their calculation of net savings”.
They have subsequently done that and, again, there is no issue over that. However, as the Merits Committee indicated, it would be better to have had that in place in the first instance.
The committee made a point about the reassurances over provision to monitor and influence how court services are tailored. Its conclusion was a modest rebuke to the Government, which said:
“In our consideration of future draft Public Bodies Orders, we will expect the Government to present a properly argued case that the tests in the 2011 Act have been satisfied, supported by objective evidence”.
I am sure that the Minister will wish to ensure that that is carried through in the event of any further orders coming from his department. I hope that the Government as a whole will take that point.
One or two issues remain outstanding, which relate partly to the answers that were given by the Minister, Mr Djanogly, in Monday’s debate in the House of Commons and those given by the noble Lord today. These refer to the other structures that are in place, such as justices’ issues groups and the Magistrates’ Association. As the Minister said on Monday, there are other bodies, which mean that,
“court users … can have their views heard through structures such as justices’ issues groups, area judicial forums, local criminal justice boards, victims and witnesses sub-groups, and court user groups”.—[Official Report, Commons, Delegated Legislation Committee, 23/4/12; col. 4.]
That raises the question of the number of bodies that might be involved and suggests rather a more fragmented approach to looking at the issues that arise in an individual area. It is striking that there is no mention of local authorities among those groups. I invite the Minister to consider whether it would be appropriate to encourage HMCTS to promote the involvement of local authorities, which are important partners in community safety and can make a significant contribution to dealing with the problems of crime and disorder, which manifest themselves locally and end up in the courts.
Useful experiments are taking place in different parts of the country in relation to some of these matters. For example, I am currently chairing a scrutiny panel in my own authority dealing with the mental health of offenders. In the course of that we have discovered that there are experiments about providing professionals at court who can assist those who might have mental health problems at a very early stage in proceedings. It is also something that the young offender teams are involved in, closely linked to the local authority services.
The point is that it will not be sufficient simply to have different groups of people relating to the HMCTS.
Lord Haskel
I am sorry to interrupt the noble Lord, but a Division has been called and so the Committee stands adjourned for 10 minutes.
Lord Beecham
My Lords, I shall resume my suspended sentence—which is not an inappropriate term in the circumstances. I invite the Minister to explore a couple of aspects, in particular in relation to the role of local government.
First, it would be interesting to know whether the experiment that the noble Lord has referred to includes the relevant local authority, or authorities, in that area; and secondly, whether he would encourage the system to co-operate with any local authority scrutiny committee, because it would of course be open to a local authority to scrutinise what is happening in this area. Also, in relation to monitoring and reporting on what is happening—which can be done locally, and the local authority scrutiny committee may be a suitable vehicle for that—there is the question about whether the department itself would collate information, so that what is happening and what improvements might be made to the system can be seen nationally, rather than simply leaving it at the local level. That was the thrust of the implicit suggestion of the Merits Committee when it inquired as to that.
Finally, I note that some £450,000 will be saved by this process. It is not an inconsiderable amount of money but has to be seen in the light of the £1 billion shortfall in the anticipated savings from the abolition of public bodies of one kind or another. It will be interesting to see how much more is to come in various other regulations or orders that we will no doubt be considering. Not just in the context of this department, but generally, there seems to be a long way to go to meet the Government’s target of £2 billion of savings. However, as I said at the outset, we will not oppose the order and trust that, in the developing system, there will be an adequate exchange of information. There might for example be peer review and, in particular, there should be an annual report by the department or the agency on the progress that is being made.
Lord Henley
My Lords, I thank the noble Lord for those comments and will deal with some of the points he has raised. Starting at the very end, when he talked about the savings that are necessary, he is right—£450,000 is a relatively small amount in the great scheme of things and we will continue to have to look across all departments and the whole of government for further savings to try to get the deficit down and, ultimately, to start reducing the debt that we inherited. The noble Lord knows that full well, and all parts of the Government will continue to do that. However, at this stage, discussing this particular order, he would not expect me to go any further.
I am grateful that he made clear that the Opposition do not oppose these proposals. It would be very odd if they did since they intended to do exactly this and announced it in the Budget in 2010. He then went on to talk about the various concerns that the Merits Committee had had and alleged that it had issued us with a modest rebuke. I appreciate that it was a modest rebuke, which we will take on the chin, but it could have given us a much more severe rebuke—it was open to it to insist on a 60-day period rather than a 40-day period. It is open to the Merits Committee to do even more than that. It is a very effective committee and one that we all, quite rightly, live in fear of and whose considerations we take very carefully. That is why I can give an assurance on behalf of the department that future Explanatory Memorandums will be clearer, with the financial impact fully laid out and the assessment against the various tests fully spelt out. We will make sure that that is the case. There are four further orders due from the MoJ in due course and we will try to make sure that we comply with the wishes of the Merits Committee.
The noble Lord then raised questions about my opening remarks and those of my colleague, Mr Djanogly, in another place, suggesting a fragmented approach and asking about bringing local authorities into consultation on these matters. As an old local authority hand—one with more experience than many people in this area—he is right to talk about local authorities, and we shall certainly look at how we can work with them and involve them. He suggested making use of their scrutiny committees and there are various ways in which we can look at that. Courts and the wider criminal justice system certainly try to work hard and liaise with local authorities and local authority groups, and they will look at how they can improve that in due course.
The noble Lord asked whether we will publish data nationally. Under the transparency agenda we are publishing data on a national basis in relation to the courts programme so that the public can see local and national performance directly. If the noble Lord would like further details about that and how to access it, I am more than happy to write to him in due course.
I hope that has dealt with the noble Lord’s points. If it has, I beg to move.
Apprenticeships (Alternative English Completion Conditions) Regulations 2012
Baroness Wilcox
That the Grand Committee do report to the House that it has considered the Apprenticeships (Alternative English Completion Conditions) Regulations 2012.
Relevant document: 42nd Report from the Joint Committee of Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, apprenticeships are synonymous with employment. It is the experience of genuine employment that sets an apprenticeship apart from most other forms of vocational training. It is the fact that apprentices have a unique opportunity to learn from one or more mentors and to develop, practise and hone real occupational skills which gives them a real head start in their careers. We all, I am sure, can envisage an apprentice working alongside the mentor or master, watching, copying and refining their skills. For his part, the master will demonstrate, guide and correct the apprentice’s work. Both apprentice and employer have a real stake in the apprentice’s development and success.
When this Administration came into office, approximately 21 per cent of 16 to 18 year-old apprentices were on a programme-led apprenticeship. This meant that one-fifth of our younger apprentices were not employed and did not get paid. Following the initiative of the previous Government to introduce statutory apprenticeships, we went ahead with that work and last year we stopped funding programme-led apprenticeships. The introduction of the apprenticeship agreement regulations in April of this year will end the few remaining programme-led apprenticeships. This means that we can be increasingly confident that apprentices following our statutory programme will be employed and remunerated.
However, this House agreed to make provision for limited exceptions to the requirement for apprentices to be employed. That is why we are here today—to agree those circumstances as specified in these regulations. This issue was thoroughly debated during the passage of the Apprenticeships, Skills, Children and Learning Act. The proposed exceptions fall into three categories, the first being where employed status is not the norm. This applies in a very small number of jobs or occupational areas. Apprentices in this category covered by the regulations will be engaged in specified occupations following a specified framework. A characteristic of such apprenticeships is that they will be supported by experienced colleagues involved in a collective venture— for example, share fishermen.
Secondly, there are those employed apprentices who are made redundant during the course of the apprenticeship. In such a difficult economic climate it would be unfair further to penalise people who have lost the opportunity to complete their apprenticeship through no fault of their own. Knowing that they can complete their apprenticeship, even if they are not able to find alternative paid employment, will, I am sure, offer some consolation. The regulations provide that they may complete their apprenticeship within six months of the date of their redundancy by working other than for reward—for example, by working in a voluntary or unpaid capacity. Having completed their apprenticeship, they should be better placed in the labour market.
Thirdly, we have considered the unique position of our elite athletes. Apprentices undertaking the Advanced Apprenticeship in Sporting Excellence with a view to competing in the Olympic, Paralympic or Commonwealth Games are covered by this final category. In the year of the London Olympics, we are reminded of how important it is to support young athletes to develop their skills. We have sought to ensure clarity over which sports and games are included in these regulations. They must be listed as an official sport from one of the Games mentioned and they must not be from a sport in which we would expect an apprentice to be employed. Such business sports include cricket and football. Apprentices in business sports will still be able to access apprenticeships using the standard conditions.
I hope that noble Lords will agree that these regulations balance the Government’s desire for apprentices to be employed with the need to allow for some flexibility in those circumstances where employment is not possible. That is what this House expects and it helps to enhance the quality of the learning experience by allowing apprentices to apply their blossoming skills as they work. This is also consistent with recent announcements introducing a minimum duration of 12 months for apprenticeships undertaken by 16 to 18 year-olds, and for adults unless they have prior relevant qualifications. I commend the regulations to the Committee.
Baroness Byford
My Lords, I am grateful to the Minister for explaining the reasoning behind the regulations. I reinforce again my commitment to apprenticeships, which are hugely important across whatever aspect of work people are able to secure. Apprenticeships are a wonderful way of learning. As the Minister rightly said, mentoring and the passing on of skills and knowledge are crucial in all this.
I apologise for not taking part in the Bill to which the Minister referred. Looking at Schedule 1, I was intrigued to see the fishing industry, which relates to the Minister’s background, listed. I rise to speak to ask for a little more clarification on that. One of the things that struck me was that the fishing industry, which the Minister knows so well, sometimes has restrictions on the days when it can sail. Therefore, I wondered whether there was enough flexibility for the apprentice to be able to complete their six months within six months or whether, under those circumstances—maybe because the ship cannot go out to sea—they could take a longer period. I am not being critical; it is because of my own ignorance that I am raising this particular issue.
Another question arises: if, for any reason, the person is made redundant for obviously commercial reasons, is that apprentice then able to transfer to another fisherman, for example, and reallocate the time that they have done already, or do they have to start afresh? I may have missed this when I was looking through the papers on this order, but I am not clear and I seek clarification.
I agree with the Minister that this is a unique opportunity. It is a shame that, over many years, apprenticeships have been perhaps underrated and undervalued. I am glad that the Government have taken up the role and are much more committed to encouraging and promoting apprenticeships. However, I seek clarification from the Minister.
Baroness Sharp of Guildford
My Lords, I too would like to thank the Minister for her explanation of the statutory instrument and I apologise for arriving late. The Committee moved on more quickly than I had anticipated.
I have two questions. First, am I right in thinking that these alternative regulations apply to relatively few young people? Given that this is an Olympic year, perhaps the numbers under Schedule 3 are rather greater than they might otherwise be, but the numbers under Schedule 1 are relatively small. On the issue of those made redundant, it will be impossible to tell because we do not know who might be made redundant. However, the total number of young people to whom these instruments might apply is relatively small.
The other thing to note, of course, is that these regulations are the result of an amendment that was carried when we discussed the Bill. At that point, we discussed at some length what would happen to those who were made redundant, and this has been put in specifically to make sure that there is a way forward for those who have more or less completed their apprenticeships. I am very pleased to see that. Perhaps the Minister could respond on the relative numbers in relation to the total number of apprenticeships.
Lord Young of Norwood Green
My Lords, I too thank the Minister for her explanation. I make no apologies for repeating a number of questions and concerns expressed by my honourable friend in the other place, Mr Gordon Marsden, as we—the royal “we”—are still awaiting written responses from the Minister.
On the question of quality, I was looking at the report of the Eighth Delegated Legislation Committee and read through the Minister’s contribution. At one point, he said:
“There are those who feel that I have gone too far on quality”.—[Official Report, Commons, Eighth Delegated Legislation Committee, 17/4/12; col. 3.]
I do not think that we have gone too far on quality, even allowing for a certain amount of his ministerial flamboyance, as I would describe it, in a nice way. I do not question his integrity or commitment on this issue but I do think there is no room for complacency
I listened carefully to what the noble Baroness said in her opening statement, where she described a fairly traditional approach to an apprenticeship. I do not know if noble Lords had the opportunity to watch a recent “Panorama” programme on apprenticeships which showed, unfortunately, a significant amount of exploitation of young people, who were led to believe that they were going to get training from this particular subcontractor. There was little or no training whatever. It was in no way the kind of quality we should expect.
Baroness Wilcox
My Lords, I thank everyone for taking part and asking some interesting and important questions. It is not necessarily the number of people who are in the Room but the questions that they ask, as I have discovered before in the Moses Room. I am always very careful when I see that there not many people here. It is usually the ones who really know what they are talking about who are.
I thank my noble friend Lady Byford for her question and for noting that I come from the fishing industry and am therefore interested. In opposition she led on Defra, so she knows the subject very well. Only sea fishing is covered by the maritime occupations in these regulations, namely share fisherfolk, crew and deck hands. The numbers are small. There were 30 apprenticeships in 2010-11. There has been no demand to develop other types of fishing apprenticeship. Officials will explore the potential to develop this sector further with the National Apprenticeship Service and the sector skills councils.
When I was in the industry I first knew about share fishing when my grandmother left me my little fleet of fishing boats. The captains of the boats said to me, “We’ll be share fishing, then”. I said, “Oh, right”. That meant that I got half of whatever catch came up to pay for the boat, the oil and everything else that was needed, while the other half went to them. It did not work terribly well so I think that what share fishing means has changed nowadays, but that is how it was explained.
It is sad that there is very little demand for apprenticeships in fishing now. I am delighted to see that the National Apprenticeship Service will explore this, particularly since I am involved with the National Lobster Hatchery in Cornwall. There are other ways of being in the fishing industry, along the lines of research into what we used to call fish farming but is now carried out wild at sea. Certainly, in the lobster hatchery it is being done as a scientific project. That area has moved to what look like scientific apprenticeships but are about the fishing industry, which may explain why we do not have more figures than that. I will look into that for my own information and see if we can find a better answer in the future.
My noble friend Lady Byford then talked about the fishing transfer. As she suggested, a fishing apprenticeship would take place over a longer period, as required to complete the training. Six months applies only to redundancy. Those made redundant can transfer their apprenticeship to another employer. However, although a fishing apprenticeship is about going to sea and fishing, in my experience apprentices also spend time on the quay, learning how to look after their nets, selling their catch and learning how to grade their catch. It is not just about days at sea and seamanship but their workmanship with the fish that they catch and the things that they have to use. I hope that that is helpful; it certainly gave me the opportunity to get an answer as well.
The noble Baroness, Lady Sharp, asked about the numbers affected by redundancy. I am told that we do not collect data on this. Surveys tell us that less than 5 per cent of the total number of apprenticeship starts finish in that way. However, we are considering what measures to put in place to collect these data. I thank the noble Baroness for that question.
I come now to the noble Lord, Lord Young. I have a note here from an expert whom I know the noble Lord recalls from his days as a Minister, which says, “A written and, I expect, flamboyant response from John Hayes will follow. However, I will attempt to address some of your questions now”.
As to the “Panorama” programme, my honourable friend the Minister for Apprenticeships has commissioned a detailed investigation into the cases identified by “Panorama” and the National Apprenticeship Service will report in the coming weeks on its findings. We are committed to rooting out and eradicating poor quality wherever it is identified, continuing the work that the noble Lord, Lord Young, and his people did before.
As to the monitoring and review of these regulations, the National Apprenticeship Service works in partnership with sector skills councils and other sector bodies and keeps the need for exemptions under review. The regulations will be formally reviewed every 12 months.
We considered the World Championships with DCMS, but the thinking at the moment is that to include not formally recognised sports would be too open-ended. On balance, we have decided to restrict it to only Olympic, Paralympic and Commonwealth sports. I am sure that if the noble Lord, Lord Young, were to pursue this matter we would no doubt look at it again, if provoked.
Lord Young of Norwood Green
All I was trying to point out is that this year is a good example because the World Championships were definitely a preparatory stage for the Olympics. Indeed, selection for the Olympics often depended on a person’s performance in the World Championships.
All I am making a plea for—I am not expecting this to be a negotiating session and for the Minister to say, “Yes, that is perfectly okay”, because I understand that there will be cost implications—is that it should be recognised that the Olympics come every four years, people prepare for them and that ought to be taken into account. For these sporting excellence apprenticeships, it depends how the phrase about working towards competing in the Olympics is interpreted. Perhaps the Minister will take that aspect away.
It is nice to see a wise adviser, who I remember from my days, still actively assisting the Minister.
Baroness Wilcox
I am sure that he has noted that.
I thank everyone for the time they have given and the contributions they have made. If I have missed anything, obviously they will have picked it up and we will take it back. There is clearly consensus on the underlying principle that apprentices must be employed. These regulations do not undermine that principle but, rather, they acknowledge that there are only a limited number of circumstances where we will accept that apprentices are not employed in order to complete their apprenticeships. Setting out those circumstances clearly in these regulations can serve only to ensure that the vast majority of apprentices will benefit from employed status and will help stamp out the ambiguity that has been a feature of the programme in the past. I commend the regulations to the Committee.
House of Lords
Death of a Member: Baroness Ritchie of Brompton
The Lord Speaker (Baroness D'Souza)
My Lords, I regret to inform the House of the death yesterday of the noble Baroness, Lady Ritchie of Brompton. On behalf of the House, I extend our sincere condolences to the noble Baroness’s family and friends.
Roads: Private Investment
(12 years ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what lessons learned from the privatisation of British Rail they will apply to any plans for increased private investment in the United Kingdom’s motorway and trunk road network.
Earl Attlee
My Lords, we are considering a number of options for the future ownership and financing of the strategic road network, looking at a greater role for private funding to provide more investment. This feasibility study is considering a wide range of possibilities, and it will be taking account of the experiences of water, electricity, telecoms and gas as well as rail and other transport sectors.
Lord Kennedy of Southwark
That is a rather disappointing response from the noble Earl. I was hoping for “We’ve looked at it, it’s a stupid idea, and we’re not going to do it”. What words of comfort does the noble Earl have for the motorist, the small business and the taxpayer that they are not going to have additional costs to bear if proposals to introduce further private capital to our road system come to fruition?
Earl Attlee
My Lords, the first comfort that I will give is that the feasibility study will consider the role that tolling can play, but it will not consider tolling existing capacity or road pricing. The purpose of the feasibility study is to look at how we can better run the strategic road network into the future so that investors can make long-term decisions rather than the short cycles that we are experiencing at the moment.
Lord Mawhinney
My Lords, will my noble friend learn two lessons from the privately designed, built, financed and operated stretch of the A1 between Alconbury and Yaxley? The first is that without that privately funded scheme—which I declare to the House I authorised—motorists on the A1 would still be bogged down in horrendous traffic jams with very little likelihood that that road would have been financed directly from the public purse. The second lesson that I hope he will learn is that when cost negotiations are taking place with the private sector they should be done with maximum vigour on behalf of the taxpayer.
Earl Attlee
My Lords, I regularly used to use the bit of road that my noble friend refers to. Particularly impressive was the rate at which the construction project went ahead. It had all the signs of an efficient process.
Baroness Scott of Needham Market
My Lords, given that the objective of government is to encourage the investment of private finance in the transport sector, do the alternatives include the slightly less risky idea of creating a fund into which private investors can put money to invest in a portfolio of transport projects both new and existing?
Earl Attlee
My Lords, I am not quite sure about the exact proposal that my noble friend puts forward, but we are looking at all options and I will be grateful for any input from noble Lords into possible models.
Lord Davies of Oldham
My Lords, it may well be the case that the noble Lord, Lord Mawhinney, authorised an effective improvement to the roads, but I am concerned that the Minister effectively told the House that pretty well everything could be covered by this initiative. For example, would it be possible that there would be designated lanes for those who paid a road toll, so that we had the equivalent of first-class passengers on rail operating on our roads? Or would it mean that a mere resurfacing of the road, or just the addition of a junction, would effectively mean that the road had been upgraded and therefore could be subject to one of these initiatives?
Earl Attlee
My Lords, the noble Lord has made just the same points as I made to my officials. The key question is: is it additional capacity or is it merely an enhancement? If it is additional capacity, we would consider tolling it, but if it was just an enhancement, perhaps that would not justify tolling. The noble Lord puts his finger on an extremely important point.
Baroness Gardner of Parkes
Can the Minister tell me on this Anzac day whether he knows that Sydney Harbour Bridge is a toll road? It has paid for itself probably thousands of times over, but as far as I know there is still a small toll payable. Does he not think that it is a great advantage for people to have a road that otherwise they would not have, but that the cost should not be so high that it creates a major problem, particularly for local people in meeting the toll cost?
Lord Anderson of Swansea
My Lords, the Sydney Harbour Bridge may well be a successful toll bridge. The Severn Bridge is a successful bridge but it is causing a major impediment to investment in Wales. Given the other problems we face, could that be looked at afresh?
Earl Attlee
My Lords, as the Question is linked to railways, I can point out that we are electrifying to Wales.
Spencer Perceval
(12 years ago)
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Lord Blair of Boughton
To ask Her Majesty’s Government whether they intend to mark the 200th anniversary of the assassination of Spencer Perceval, Prime Minister and parliamentary supporter of the abolition of slavery, on 11 May 2012.
Lord Wallace of Saltaire
My Lords, the National Archives holds a number of records relating to the assassination of Spencer Perceval. To mark the 200th anniversary, a selection of these will be digitised and made available online through the National Archives website. The full range of records held by the National Archives about Spencer Perceval can be viewed in the reading room at Kew. The noble Lord might also like to know that a number of events are planned by the House authorities to mark the anniversary. These were set out recently in response to a Written Question by the Chairman of Committees.
Lord Blair of Boughton
I am most grateful to the Minister for that Answer. I confess to being somewhat surprised that there is no memorial to such a grave and unique event within the precincts of Parliament. Perhaps, before I get to my supplementary question, I may beg the indulgence of the House for a momentary reflection on this man and his relevance to our times. Above all, he was the House of Commons end of Wilberforce’s great campaign for legislation to abolish slavery. Will the Government use the anniversary of Perceval’s death to consider whether enough is being done in this country to combat the pernicious and degrading trafficking of women and girls for sexual purposes by organised crime, of which we have seen appalling examples in recent years in Lancashire and Yorkshire and, only a few weeks ago, allegedly in Oxford?
Lord Wallace of Saltaire
My Lords, there is a rather large monument in Westminster Abbey to Spencer Perceval. On the question of whether there should be one here, since I also have connections to Westminster Abbey, I am not enormously in favour of adding more political statues within the Abbey and I am not sure how many more memorials we necessarily want around here—that is a personal view, not the Government’s view. On the trafficking of women, the Government issued their human trafficking strategy last year as a White Paper. We are carrying further the excellent work already undertaken by our predecessors on this very serious problem. It is not just a matter of the trafficking of women; a quarter of those who were trafficked in the last two years were children. The trafficking of children to this country is also a very serious problem.
The Lord Bishop of Chichester
My Lords, does the Minister agree that the continuation of slavery and quasi-slavery in very many parts of the world 200 years after the so-called abolition of slavery continues to be a scandal, and could he outline what Her Majesty’s Government intend to do in order to continually influence our partners in the international community to bring this to a speedy end?
Lord Wallace of Saltaire
My Lords, sadly, slavery has been with us from time immemorial. Governments have worked for more than 200 years now to get rid of slavery, but we are conscious that we do find instances, even within this country, where effective slavery is imposed, even occasionally on men. We are therefore working within and outside Britain through the United Nations, the Council of Europe convention and EU directives, and closely with our partners across the Channel, to see what we can do to operate against this worldwide problem.
Lord Walpole
My Lords, does the Minister know that I am directly descended from Spencer Perceval’s sister, and that Henry Bellingham, the Member of Parliament for King’s Lynn and now in the Foreign Office, is directly descended from his assassin? Mr Bellingham and I do speak to each other.
Lord Wallace of Saltaire
My Lords, I should like to know which sister he is descended from, because my understanding is that he had at least six sisters and at least six brothers. I should therefore explain that he was one of the many sons of the Earl of Egmont, so he was not entirely a commoner.
Lord Lexden
My Lords, would my noble friend think of reminding Mr Henry Bellingham that he has already experienced the Perceval family’s taste for revenge, having been deprived of his Commons seat at the 1997 election by a direct descendant of the assassinated Prime Minister?
Lord Wallace of Saltaire
I have to admit that that was not in my brief. Perhaps I might add that Spencer Perceval was, like Wilberforce, an evangelical, and having read a little about him, I have to say that he was something of a prig. Included within his entry in the Dictionary of National Biography is the fact that in 1800 he wrote a pamphlet on Biblical prophecy in which he referred to the French Revolution as,
“a divine instrument destined to destroy popish superstitions”,
and identified Napoleon Bonaparte as the woman in Revelation, chapter 17,
“who [sits] upon a … beast … the mother of harlots … drunken with the blood of the saints”.
Lord West of Spithead
My Lords, does the Minister agree that a suitable memorial to the 23,000 Royal Navy sailors who died stopping the slave trade might be more warships for the Royal Navy?
Lord Wallace of Saltaire
I note that the noble Lord makes a very strong point, which I have no doubt he will make again on a number of occasions.
Baroness Benjamin
My Lords, if the ghost of Spencer Perceval was to pass through this Chamber today, surely the question he would ask is, “Why, 200 years after my assassination, are not just slavery but discrimination and racism so rampant, and what is being done to eradicate them from society?” In honour of Spencer Perceval, therefore, will my noble friend tell the House how determined the Government are to completely wipe out this evil practice that affects certain parts of our society today who feel excluded?
Lord Wallace of Saltaire
My Lords, it might be beyond the capacity of government in an open society completely to eradicate all forms of prejudice. The Government are actively aware of the problems of the trafficking of women and children. Going around Yorkshire, I am aware that one of the things that the police come across, for example, is Vietnamese children trafficked into Britain to tend illegal cannabis factories. The trafficking of Nigerian children is also a problem. We are working closely with the authorities in a number of other countries. The Government and the relevant agencies have close liaison with their Chinese opposite numbers to combat Chinese people-smuggling. We are working as actively as we can.
Lord Foulkes of Cumnock
As far as I know, I am not descended either from Spencer Perceval or, thankfully, his assassin. On the more serious matter of anniversaries, I congratulate the Government on agreeing to support the 800th anniversary of the signing of the Magna Carta in 2015. Will they seriously also consider supporting the centenary of the start of the Great War in 2014 rather than the Battle of Bannockburn, which some people north of the border want to celebrate? I believe that it would be better to celebrate what Scots soldiers did to bring freedom to the whole of the United Kingdom.
Lord Wallace of Saltaire
My Lords, the question of which anniversaries we celebrate, particularly battles, is very sensitive. If any Members of this House find themselves in the Palace of Versailles, I recommend that they visit the Galerie des Batailles. It is a wonderful wing above the Congress room in which the two Chambers of the French Parliament met that celebrates French victories between, I think, the seventh century and 1813. It contains information on a large number of battles about which we were never told and on a very few battles about which we were told.
Baroness Butler-Sloss
My Lords, I congratulate the Government on their White Paper on human trafficking. However, is the Minister aware that a large number of men are trafficked both by debt bondage and by labour exploitation? They include not only those coming into this country but those being taken out of this country, particularly to Sweden.
Lord Wallace of Saltaire
I am aware that a number of men are trafficked. The figures I have suggest that the number is considerably smaller than that for women or children. I will check and will write to the noble and learned Baroness if she thinks that my figures are wrong.
Health and Social Care Act 2012
(12 years ago)
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Baroness Deech
To ask Her Majesty’s Government whether they have any plans for post-legislative scrutiny of the Health and Social Care Act 2012.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, all government Bills receive post-legislative scrutiny within five years of receiving Royal Assent. However, I can reaffirm the commitment that I made at the Second Reading and Committee stages of the passage of the Health and Social Care Bill. Although five years would normally elapse prior to the Department of Health undertaking post-legislative scrutiny of a Bill, we will bring that forward to three years for the Health and Social Care Act 2012.
Baroness Deech
My Lords, I am grateful to the Minister for his reply. However, does he agree that the reputation of this House rests largely on its ability to scrutinise, and that there is still insufficient capacity for this House, not a department, to carry out post-legislative scrutiny? Does he further agree that the Health and Social Care Act is very different in the end from what was proposed? It aroused huge concern and must be a number one candidate for monitoring, not necessarily by the department but by this House to ensure the appearance of total objectivity.
Earl Howe
My Lords, I am in tune with the sentiments that the noble Baroness has expressed. I am sure that she will be in no doubt that my department will be monitoring the implementation of the Act very closely. Of course Ministers will continue to provide information to Parliament—for example in response to Questions and in Select Committees and, indeed, in debates if noble Lords put down Motions. I am sure that we will provide a lot of information both on the implementation of the Act and on health and social care more widely in the months and years ahead.
Baroness McIntosh of Hudnall
I wonder if the noble Earl can explain a remark that he made early in his original Answer to the noble Baroness, Lady Deech, when he said that all government Bills are subject to post-legislative scrutiny within five years. I am sure that that is true in some way, but not in a way that I personally understand, and I am sure that it is not entirely clear to the House in what way such scrutiny is carried out. It certainly is not what is commonly meant by post-legislative scrutiny—that all Bills should be subject to it.
Earl Howe
My Lords, my understanding is that formal post-legislative scrutiny is a relatively new invention. It came in under the previous Administration in, I think, 2008. So until now there have been very few if any—there may have been one or two, a handful—formal post-legislative scrutiny processes. But we will, of course, see this as a more regular feature going forward.
Lord Mawhinney
My Lords, my noble friend has just reconfirmed that post-legislative scrutiny will take place in three years—that puts it in 2015. Can he tell your Lordships’ House whether the Government have a policy to have that scrutiny before or after the general election which is alleged to be taking place that year?
Lord Campbell-Savours
By whom is this post-legislative scrutiny on a five-year basis being conducted?
Earl Howe
My Lords, it will be conducted by the Health Select Committee of another place. The process is that the Department of Health will submit a memorandum to the Health Select Committee and that memorandum will include a preliminary assessment of how the Act has worked out in practice relative to the objectives and benchmarks identified during the passage of the Bill.
Lord Patel
My Lords, the noble Earl said in response to the Question of the noble Baroness, Lady Deech, that in the interim period the department will be undertaking scrutiny of the work of the bodies set up. Can he tell the House how the results of that scrutiny will be reported to Parliament?
Earl Howe
My Lords, the performance of the health service will be very visible as we go along: we will have the NHS Commissioning Board producing its annual report; each clinical commissioning group will be publishing an annual report; directors of public health must produce an annual report; the Secretary of State has to report annually on the overall performance of the health service; and HealthWatch England has to publish an annual report. So there will be no shortage of transparency along the way.
Baroness Jolly
My Lords, as for the Health and Social Care Act, scrutiny was, of course, done by this House. However, there is still more to be done, because there is quite a lot of secondary legislation still to come down the track. Can the Minister give the House some indication of how many pieces of secondary legislation are still to come, when they might be introduced and what areas they will cover?
Earl Howe
My Lords, I cannot yet give my noble friend a precise number, but before the House breaks up in the summer we hope to lay a number of statutory instruments. Some will come into force this October, others are designed to come into force next April, but we will of course be consulting, where appropriate, on all of those and I shall be happy to give the House further information when I have it.
Baroness Masham of Ilton
My Lords, does the Minister agree that HealthWatch has been left in limbo? Would he agree to a fast-track legislative scrutiny?
Earl Howe
I do not agree that HealthWatch has been left in limbo; in fact, only this morning I was attending a round table of pathfinder local healthwatches and witnessing for myself the tremendous energy and enthusiasm that they were devoting to HealthWatch. So the short answer to the noble Baroness is no, I think the process as regards HealthWatch is very much on track.
Baroness Thornton
My Lords, my question follows on very nicely from that of the noble Baroness, Lady Masham, because “No decision about me without me” was the Government’s mantra when they first introduced the White Paper and the Bill. I would like to know not only how soon that mantra might become a reality but also, in terms of post-legislative scrutiny, how the Minister thinks that post-legislative scrutiny might be carried out to allow independent scrutiny given that the two bodies that will essentially control the funding for the patients’ voice, HealthWatch, are the Care Quality Commission and local government—in other words, government bodies?
Earl Howe
My Lords, we should not forget the capacity of Parliament, particularly the Health Select Committee in another place, to conduct scrutiny whenever it chooses. Indeed, your Lordships' House could if it wished configure itself in a way to conduct scrutiny of any aspect of the Health and Social Care Act.
Police: Racism
(12 years ago)
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Lord Sheikh
To ask Her Majesty’s Government what recent assessment they have made of the level of racism within British police forces and how this can best be addressed.
The Minister of State, Home Office (Lord Henley)
My Lords, the Government take allegations of police racism very seriously. Any such allegations must be investigated thoroughly and, when and where required, perpetrators must be dealt with robustly. I have confidence in the ability of leaders of the police service to deal with this issue.
Lord Sheikh
My Lords, I thank the Minister for that reply. What assurance can my noble friend give your Lordships' House that police officers and staff are receiving appropriate training in community and race relations following on from recent events? Academic research has found that there is still a low level of diversity in senior and specialist ranks of the police forces. What more can be done to encourage police forces to recruit, retain and promote police officers from a diverse background?
Lord Henley
My Lords, taking the noble Lord’s first question first, he is right to talk about the importance of appropriate training, which all police forces are doing up and down the country. We will encourage them to continue doing so. As for his second question about low levels of diversity in the senior and specialist ranks of the police force, he is right to emphasise that point. It is important that we improve diversity at all levels and that police forces remain representative of the communities that they serve so that they can better understand their needs and ensure that the services they provide are appropriate. That is something that the leadership of police forces up and down the country is ensuring is done.
Lord Mackenzie of Framwellgate
My Lords, in fighting racism, which the whole House will support, does the Minister agree that the routine use of the race card is not helpful? Is he aware that when I made a complaint to the commissioner about Commander Ali Dizaei—they were serious allegations—who subsequently went to prison, a complaint was lodged against me with the Clerk to this House, alleging racism and abuse of authority? That complaint was written on behalf of the National Black Police Association by the Society of Black Lawyers. Does he agree that those organisations that seek to represent their members should check the facts far more clearly when making serious allegations that can affect people’s reputation and even livelihoods, and that it is not helping the fight against racism?
Lord Henley
The noble Lord makes a very important point about the problems that we are dealing with. What I want to get over is that we do not believe that the police are institutionally racist. It is very encouraging that in the case of the recent allegations the police officers themselves reported that issue, and it is evidence of the fact that there is no institutional racism in the police force. Obviously, cases will nevertheless come to light from time to time, and they must be dealt with in the most appropriate manner. That is why we are looking at the leadership of all police forces, and why we want ACPO and the Met to do their bit and the Mayor of London to do his bit—and in future we want police commissioners to do their bit—to make sure that racism is tackled at every possible level.
Lord Dear
My Lords, I am sure that we all deplore racism and discrimination wherever it occurs, particularly in organisations as pivotal as the police service, which can intervene and interfere in everyday life. I have two questions for the Minister, both concerning leadership, which have already been mentioned tangentially. Will he agree with me on the Floor of the House that in any organisation, and particularly in the police, leadership is absolutely key in influencing the culture of the service—its standards, ethics and so on? If he does agree, as I am sure he will, will he then go further and agree with me that part two of the recently published report from Mr Tom Winsor presents a golden and once-in-a-lifetime opportunity to seize the issue of police recruitment of top-level people and their advancement into rank at an early stage, that it will remain at the top of the Home Office agenda, and that there is a real will to continue to pursue that to its final conclusion?
Lord Henley
My Lords, I am grateful to the noble Lord, Lord Dear, for emphasising the importance with which we see the role of leadership within the police force in dealing with these matters and getting the culture right. I hope that will continue. As regards his second point about Winsor, I agree with him on that and we will pursue it. However, I believe that a degree more consultation is needed, and we will certainly do that in due course.
Baroness Hussein-Ece
My Lords, is not the failure to deal with incidents of racism, particularly in the Metropolitan Police, a stain on our tolerant civilised society? Is it not further in stark contrast to the case of Liam Stacey, the student who was jailed for 56 days for posting offensive comments on Twitter after the collapse of the footballer Fabrice Muamba? What urgent action is being taken to restore trust between the police and the communities, and to stamp out the evil scourge of racism that still exists in certain sections of the force?
Lord Henley
My Lords, I am afraid that I do not agree with my noble friend that there is a failure on this occasion. What has happened is that the police themselves have recognised that there is a problem. It was the police officers themselves who raised these allegations and are dealing with them. That is the encouraging sign, indicating that there is not the institutional racism that has been alleged existed in the Met in the past. I am very grateful therefore that that is happening and that those matters are being dealt with.
Lord Hunt of Kings Heath
My Lords, on the question of leadership I take this opportunity to commend the police commissioner on his robust action in relation to the matter to which the Minister has just referred. Can I, however, take the noble Lord back to the Statement that he gave yesterday? He told us that the Home Secretary is considering whether an independent inquiry should be established into allegations of corruption in relation to the original investigation into the murder of Stephen Lawrence. If the Home Secretary agrees to set up an independent inquiry, will the Minister consider passing on to her the suggestion that that inquiry might look at what progress has been made by the Metropolitan Police since the Macpherson report was published?
Lord Henley
My Lords, I echo the noble Lord’s opening remarks. As regards his other remarks about the Statement I made yesterday, I think he will remember that there was a general consensus in the House that this was a matter on which we needed to move relatively slowly. I can therefore say to him that things have not moved on much further in the 12 hours since I made that Statement. My right honourable friend the Home Secretary is therefore still considering what to do, and will go on considering those matters while the Met’s internal review continues. I will also make sure that she takes note of the comments that the noble Lord has made when she comes to make a final decision on that matter.
Sunday Trading (London Olympic Games and Paralympic Games) Bill [HL]
Lord De Mauley
That the Bill be committed to a Committee of the Whole House.
Lord Steel of Aikwood
My Lords, before we pass this Motion I want to ask a question of the Minister about how and which Bills are selected for expedited procedure and others not. I am particularly concerned because this Bill is due to go through all its stages in this House tomorrow, and all its stages in the other House on Monday. That is in stark contrast to what has happened to the Bill which we passed in this House unanimously, the House of Lords (Amendment) Bill, of which I was a sponsor, which was a very modest measure that would improve the workings of this House. I am increasingly annoyed that although that Bill was sent to the other place on 1 March, and despite all the representation that has been made, nothing has happened to it since.
My Bill does not need expedited procedure. It is such a small measure, purely internal to this House. It does not affect anybody in the outside world, or indeed the House of Commons. The current position is that it is due to be debated on Friday, thanks to my honourable friend the Member for Argyll and Bute, who has tabled it. But of course it has absolutely no chance of passing into law, despite the days that we spent on it in this House, unless the Leader of the House of Commons tables an expediting Motion tomorrow. That is what I am hoping the Minister will agree should be done. I remind the Minister that the Bill is purely internal to this House. It involves no public expenditure. It simply authorises the House authorities to do what the all-party committee under the noble Lord, Lord Hunt of Wirral, recommended, which was to draw up a retirement scheme. It enables the House authorities to consider withdrawing the Writ of Summons from those who without due cause do not turn up for six months or so. It also brings this House into line with the House of Commons on the ability to expel serious wrongdoers.
The reason for my mounting irritation on this matter is that I spoke to the Deputy Prime Minister about it at the start of the Easter Recess. He said he was going to speak to the Leader of the House of Commons. I have heard nothing since. I pay tribute to the Leader of the House here and the Leader of the Opposition, who have both made their representations on this matter.
I am asking the Minister to undertake today to convey to the Leader of the House of Commons that we want an expedited Motion tabled tomorrow to enable the Bill to go through. In doing so he could gently say to the Leader of the House of Lords that, if we do not get that, we might find a sudden outbreak of Sabbatarianism in this House. I have the Bill in my hand; it is capable of at least 300 amendments. That would make life rather difficult if he wants to get this Bill through. This may not be the right approach; I leave that to the Minister. However, do not underestimate my irritation that this matter has simply not been addressed properly. It is an insult to this House, which spent so long putting the Bill through to the House of Commons.
Lord De Mauley
My Lords, the House of Lords (Amendment) Bill which my noble friend introduced was passed by this House and sent to the House of Commons in March, as he says. My noble friend is quite right to point out that it contains a series of worthwhile measures which this House has shown it supports. However, the Bill is now in the hands of another place. It is a Private Member’s Bill, and will therefore be subject to the procedures which apply to Private Members’ Bills in another place. Having said that I will of course pass his comments to the Leader of the other place.
Parliament Square (Management) Bill [HL]
(12 years ago)
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Lord Martin of Springburn
My Lords, I have no intention of seeking to delay this piece of legislation, but I would like some assurances from the Minister. This is obviously a beautiful square, which was greatly enhanced by the cleaning up of the stonework at Westminster Abbey, and of the stonework and the creation of the visitors’ centre here at the Palace of Westminster. However, approximately 10 years ago, the Home Office promised and delivered a Bill through both Houses which stated that it would stop the permanent encampment of people like the late Mr Brian Haw in the square. He turned the square into an absolute eyesore and indeed a health hazard. All sorts of strange things happened at that place because of his permanent encampment. Every time that the police acted on the legislation that was introduced by the Home Office, a judge—and I make no criticism of the judges—duly instructed them to put Mr Haw’s dirty and unsightly equipment back on to the square, facing the House of Commons, where visitors from all over the world would turn up. It was a disgraceful situation.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, we are just passing my noble friend Lord Marlesford’s Bill, and it will then go to another place. However, I assure the noble Lord, Lord Martin of Springburn, that at the very highest level of our Government there is a great interest in what is happening in Parliament Square. There has been considerable improvement in recent months, but no stone is being left unturned—using legal means—to try to improve the situation. I hope that we can move on to whether the Bill do now pass.
Legal Aid, Sentencing and Punishment of Offenders Bill
(12 years ago)
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17:00 - Division on Motion B1 - Ayes: 238 / Noes: 238 - Motion B1 disagreed.
Lord McNally
That this House do not insist on its Amendment 1B to which the Commons have disagreed for their Reason 1C.
1C Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this reason may be deemed sufficient.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, Motion A is the Commons response to the amendment by the noble Lord, Lord Pannick. That amendment has prompted a great deal of high quality, thoughtful and principled debate, and I am extremely grateful to the noble Lord and other legal luminaries in this House who have given us the benefit of their expertise in exploring its effects. Although we have not been able to agree on precisely what those effects are, I thank the noble Lord for his clear argument and his commitment to the important constitutional principle of access to justice. I fully understand his motives in doing so. However, the House of Commons has given us its view on the amendment, and I ask the House to support the position that it has taken. I beg to move.
Lord Pannick
My Lords, I am very disappointed by the Government’s response to the amendment on the purpose of legal aid, approved by this House on Monday. Noble Lords will know that this amendment had its origins in a recommendation of your Lordships’ Constitution Committee, of which I am a member. The recommendation was strongly supported by many noble Lords at Second Reading and in Committee. The amendment was approved in this House on Report by a majority of 45 votes. After the other place disapproved of the amendment, this House voted again on Monday night, and your Lordships approved an amendment in similar terms, this time by a majority of 15 votes.
At no stage during this parliamentary process has the Minister or anyone else on behalf of the Government made any proposal, publicly or privately, for meeting the concerns of this House, whether by a revision of the wording of the amendments approved in this House or in any other respect. That is despite what the Minister kindly described as the very high quality debates that we have had in this place.
In my view, to ignore the views of this House in this way by bringing forward no proposal whatever to meet the concerns expressed here is, at the very lowest, most regrettable. It is all the more regrettable when the issue is of constitutional concern. I hope that these views may be shared, even by noble Lords who did not support the substance of this amendment.
The sorry state of this saga is exacerbated by the application of financial privilege to this amendment, even though it expressly stated that the allocation of financial resources was a matter for the Lord Chancellor’s discretion. This raises issues of considerable concern, which I hope will be shared on all sides of the House. Of course I recognise that financial privilege is not a matter for the Government, but I have had no indication at all that the Government made any representations in support of my contention, shared by many other noble Lords, that it would be quite inappropriate to apply financial privilege to an amendment that expressly stated that financial resources were a matter for the discretion of the Lord Chancellor.
Notwithstanding these matters, I have, with regret, come to the conclusion that I can take this amendment no further. Noble Lords have asked the other place to think again and it has done so. Although I disagree with the result, I do not think it appropriate to invite the House to press the matter further. I should add that if I were a Member of a House of which 80 per cent of Members were elected, I would certainly persist on this matter. Furthermore, given the very limited time made available in the other place for consideration of the amendments that we passed in this House, and given the general absence of scrutiny of this legislation in the other place, I suggest that it is not the procedures of this House that are urgently in need of reform.
I hope I will be permitted to make one other observation; I do so despite the genuine respect I have for the Minister. The unsatisfactory manner in which the Government have treated this amendment is, I regret, typical of the unsatisfactory manner in which the Government have proceeded on this Bill generally. The Government were defeated on this Bill on 11 occasions on Report and three times again last Monday. So large a volume of defeats occurred because the Government adopted inflexible attitudes and lost the arguments on their merits. Part 1 of the Bill has been made marginally better by the amendments, which are the product of the considerable work done on all sides of this House. The Bill would have been marginally better if this amendment had been accepted, but this remains a bad Bill and there remains in particular a bad Part 1 in it on legal aid.
The Government’s general inflexibility on the Bill, as with Amendment 1 in particular, has involved a failure adequately to assess the impact of the provisions before their implementation, a refusal to take on board the fact that many of the financial savings at which Part 1 is aimed are illusory because the denial of access to legal services will result in other financial costs to the state for disadvantaged persons who will be denied the benefits to which they are entitled, and because of a refusal to recognise that the limits on the scope of legal aid imposed by Part 1 will hit hardest the weakest and most impoverished sections of our society, often on complex questions of law such as are raised by immigration law.
The Government’s treatment of my Amendment 1 is, I regret, consistent with this inflexibility and narrow perspective. I am sorry to say that the product of the Minister’s hard work and the process followed by the Government on the Bill do not reflect well on this Government’s reputation. They have damaged access to justice, a fundamental constitutional principle, as this amendment sought to recognise. The Minister has repeatedly emphasised in this House that the Government have accepted amendments during the passage of the Bill, but those amendments have mainly been on matters that should never have been excluded from the scope of legal aid in the first place.
I pay tribute to the noble Lords, Lord Bach and Lord Beecham, for their tireless and eloquent work in exposing the defects in Part 1. I thank them, the noble and learned Lord, Lord Woolf, and the noble Lords, Lord Faulks and Lord Hart of Chilton, for adding their names to the amendment. I thank all other noble Lords who supported the amendment during the passage of the Bill.
Lord Howarth of Newport
My Lords, the amendment moved by the noble Lord, Lord Pannick, on Monday, and the sense of it being approved twice in your Lordships’ House, sought to enshrine in Part 1 of the Bill access to justice as the objective of the Bill. Such a statement of principle was made in the Legal Aid and Advice Act 1949 and has been reaffirmed in every Act of successive Governments, including Conservative Governments, dealing with legal aid. When the Labour Government introduced the Access to Justice Bill in 1998, it included Clause 4(1), which instructs the Lord Chancellor to promote,
“the availability to individuals of services of the descriptions specified … and, in particular, for securing (within the resources made available, and priorities set, in accordance with this Part) that individuals have access to services that effectively meet their needs”.
At that time, the Liberal Democrats and Conservatives, in opposition, wanted to place further duties on the Lord Chancellor. The noble Lord, Lord Goodhart, speaking from the Front Bench on behalf of the Liberal Democrats, said:
“What needs to be stated at the outset is the reason for providing the funding”.—[Official Report, 19/1/99; col. 480.]
It would be helpful if the Minister, the noble Lord, Lord McNally, speaking as a Liberal Democrat, would explain to us why the Liberals have now changed their tune.
Lord Howarth of Newport
If I may be allowed to finish my sentence, I would be grateful if the Minister would be willing to help us understand why the Government felt it appropriate to make that claim. As I have now finished my sentence, it is with pleasure that I give way to the noble Lord, Lord Thomas.
Lord Thomas of Gresford
The noble Lord suggested that the Liberal Democrats have changed their tune. The noble Lord will recall that in Committee, on Report and on Monday I said that this amendment meant nothing and added nothing to the Bill. I was supported by my noble friend Lord Lester, who said it was just water.
Lord Howarth of Newport
That may be the view of the noble Lord and his noble friend. It is not the view of the noble Lord, Lord Pannick, and those of us who supported him on two occasions in inviting the other place to think again about this matter.
Baroness Butler-Sloss
My Lords, I strongly support the noble Lord, Lord Pannick. It is manifestly absurd—to me, at least, and it may be to other Members of this House—that this particular amendment should be treated as having anything to do with financial privilege. I have always been very hesitant to vote against the Government at the ping-pong stage, as I have always thought that they should get their business through. I voted with the noble Lord, Lord Pannick, on Monday because of the financial privilege point, and for that reason I say today that, whatever else has been said, I find it inconceivable that the Minister in the other place should again have called it financial privilege.
Lord Mackay of Clashfern
Perhaps it is worth pointing out that when this amendment was called, the Speaker of the House of Commons intimated that financial privilege was involved in the amendment. The reason for that is not explained as part of House of Commons procedure. Your Lordships know that I have had some difficulty in the past with references to this feature in relation to other Bills. The fact is that it is not for the Government, at the beginning, to mention this point. It is taken by the Speaker on behalf of Parliament and on behalf of the House of Commons. I have no doubt that, as Speaker Martin told us the last time, he does so on advice from the Clerk of the House of Commons. The Government then proceed from there. They could, if they wished, ask the House of Commons to support the amendment, notwithstanding that it involved financial privilege, but the basic ruling that financial privilege is involved seems to come from the Clerks of the House of Commons. I confess that their way of dealing with the matter is not something that I fully understand.
Lord Woolf
Before the noble and learned Lord sits down, perhaps he could assist me with regard to the question of financial privilege. In view of what he just said about the Government’s ability to invite the House of Commons to consider the amendment notwithstanding the point of financial privilege, does he accept that the Government could also have taken the action of saying, “We do not accept the amendment for good reasons”—which would be identified—“and, in those circumstances, we ask the House to indicate, in view of what has been said in this place, what its view is of those matters”? Financial privilege has no substance in fact. As all lawyers know, if the facts are totally inconsistent with the conclusion that is reached, that is wrong as a matter of law. An appellate court will always interfere with a fact-finding tribunal’s decision if it is wrong in law in that sense.
Lord Woolf
It is. Perhaps I may make that clear to the noble and learned Lord, whose views I respect so much. I therefore request him to assist.
Lord Mackay of Clashfern
My Lords, the practice of the House of Commons, as I understand it, is that when an amendment is called that involves financial privilege—in the opinion of the Speaker acting on the advice of the Clerks—this is intimated; and my understanding is that the Government would not be able to challenge that at all, just as we, as a matter of practice, do not challenge it either, although sometimes there have been occasions when some have felt there was a possible reason for challenge. However, as a matter of practice, we do not do that. It is open to the Government—notwithstanding the fact that financial privilege is involved—to invite the House of Commons to agree to an amendment that involves financial privilege. Then the Speaker has to certify in the Journal that a matter involving financial privilege has been passed by the House of Commons. The reason for that is that the House of Commons requires, generally speaking, a money resolution in respect of any expenditure involved in a Bill; and if a Bill involves expenditure, a money resolution has to be passed at some stage during the course of the Bill.
In this procedure, there is no room for a money resolution as such, because that happens earlier, but the signification made by the Speaker—in that situation where the House of Commons has decided, notwithstanding that financial privilege is involved, to agree to the amendment, in whole or in part—goes into the Journal in order to replace the need for a money resolution, and it of course authorises the Treasury to disperse money on the basis of that resolution of Parliament. That has nothing to do with the question of whether or not the amendment should be agreed, but, so far as concerns this House, if the resolution is based on financial privilege, the understanding has been—notwithstanding how difficult it might be on occasion for some of us to understand exactly how it arises—that we do not dispute that proposition.
Lord Howarth of Newport
Perhaps I may put it to the noble and learned Lord that while the exposition he has just given seems to be entirely correct, what is interesting—and this may not be a matter on which he personally would wish to comment, although I hope the Minister will do so—is why the Minister chose to emphasise at the outset of his speech that the amendment was subject to financial privilege. Of course it was. The Speaker made it clear to the House that that was the case. However, the Government could have asked the House to waive financial privilege and chose not to do so. That seems curious in an instance where nobody has been able to identify the expenditure implications of the particular resolution. That is what is perplexing us. Some of us have a larger worry about the practice that the Government have adopted of brandishing financial privilege at the outset of speeches in which they seek to refute or reject the advice of the House, because it tends to close down the argument. It leaves us wondering what the Government consider the useful role of this House to be.
Lord Clinton-Davis
Before it is too late, perhaps I may pay tribute to the noble Lord, Lord Pannick, to whom this House owes a tremendous debt. Throughout, he has argued passionately in favour of something he really believes in: legal aid. It is important that the basic principles that were laid down so long ago are observed. Like him, I believe passionately in the purposes of legal aid. Many people outside this House are indebted to what has been achieved.
Lord Bach
My Lords, I can be very brief. The Official Opposition share the disappointment of the noble Lord, Lord Pannick, in the Government’s response to his amendment. The Government have approached that amendment—a modest and sensible one by any standards—in a most unsatisfactory and unconvincing manner. We certainly agree with what the noble Lord had to say about financial privilege in the context of his amendment. There will be many inside and outside Parliament who will wonder for some time to come why the Government were not able to accept his amendment. We had no satisfactory reason given at any stage, and people will fear the worst as far as concerns this Government’s intentions in relation to legal aid.
I, too, would like to pay a compliment to the noble Lord, Lord Pannick, as my noble friend Lord Clinton-Davis did. He is a model of the way in which a noble Lord can assist this House when dealing with difficult and complicated legislation, and he does it from a point of view that always has justice as its base. The noble Lord made some strong strictures on the Bill and I agreed with every word he said. I will be less polite than he was. There are parts of Part 1 of the Bill—the bits that destroy social welfare law—that are not just bad but actually wicked; and I choose that word with great care. They are wicked because they set this country back from the position it was in.
The noble and learned Lord, Lord Mackay of Clashfern, has a great reputation for making sure that the system of social welfare law worked well and to the benefit of the poorest in our society. I very much regret that the Government have changed all that for no savings at all. Even if the savings were great, they would not be worth it—but there will be no savings at all. Why do I say “wicked”? Because I think it makes this country more uncivilised and it diminishes something that is very precious to all Members of this House: our legal system. As such, it diminishes our country, too.
Lord McNally
We have heard that speech several times over the past few months. I repeat that the big betrayal of the poorest in our society would be to lose control of our economy. Sometimes noble Lords opposite take the biscuit in the way they put their arguments. The noble Lords, Lord Pannick and Lord Clinton-Davis, do not have a monopoly of passion in this area. The noble Lord, Lord Howarth, has used his argument before. We have consciously changed the direction of the 1949 and subsequent Bills that were open-ended in their commitment and now have one that is specific in its commitment. That is at the heart of our resistance to the Pannick amendment. It is to mislead the House to argue that the Government have not made clear from the start the purpose of the Bill and of the Lord Chancellor. I tremble to take on a former Lord Chief Justice or a most distinguished QC, but Part 2 states:
“The Lord Chancellor may make such arrangements as the Lord Chancellor considers appropriate for the purpose of carrying out the Lord Chancellor’s function under this Part”.
It is all laid out there in Part 2. To argue that it is not will mean that we will go round in circles.
I have never used the financial privilege argument. As is well known and as we have heard from some very experienced parliamentarians, if an amendment infringes privilege, that is the only reason that will be given. If noble Lords want a major reconstruction of our constitution going back 300 years, that is all very well; but, as I said, the financial privilege of the House of Commons is not something to be lightly dealt with. Our opposition to the Pannick amendment from the beginning was that it was flawed, providing as it does a duty that is unclear in both application and effect, as well as displacing a duty that is precise, unambiguous and inherently tied to the Bill and the legally aided services available under its auspices.
I therefore ask the House to support the House of Commons in rejecting the amendment—I understand that the noble Lord, Lord Pannick, is not going to press it. This is really the time to ask the House to agree with the House of Commons.
Lord McNally
That this House do not insist on its Amendments 2B and 196B to which the Commons have disagreed for their Reason 196C.
196C Because it is appropriate for provision about evidence of abuse for the purposes of an application for civil legal services described in paragraph 10 or 11 of Part 1 of Schedule 1 to be made by regulations.
Lord McNally
My Lords, we now move to Motion B, which contains amendments in relation to domestic violence. The noble and learned Baroness, Lady Scotland, told this House on Monday that we had a choice to make. Let me reassure this House that the Government have made a clear choice in favour of victims. The Lord Chancellor made this very clear last week when he stated:
“It was never in doubt that there would be legal aid for the protection of victims of domestic violence. Domestic violence is an issue that this Government, like any Government, including the previous one, take extremely seriously”.—[Official Report, Commons, 17/4/12; col. 219.]
The debate on the Bill that we have had over the past few months has not always reflected the extent of the Government’s clear commitment to victims, so I will give some examples.
The Home Office will provide more than £28 million of stable funding until 2015 for specialist local domestic and sexual violence support services, and will provide £900,000 to support national domestic violence helplines and the stalking helpline. The Ministry of Justice will contribute towards the funding of independent advisers attached to the specialist domestic violence courts a total of more than £9 million up to the end of 2012-13. We will also allocate nearly £3 million a year for the next three years to 65 rape crisis centres and are working with the voluntary sector to develop the first phase of new rape support centres where there are gaps in provision. Domestic violence protection orders are being piloted in three police force areas. We have also announced a one-year pilot that will take place from this summer to test out a domestic violence disclosure scheme known as Clare’s law.
We have always been clear that where there is a need for a protective order to prevent victims coming to further harm, legal aid will be available regardless of means. Separately, legal aid will be available for victims of domestic violence for the secondary issue of private family law proceedings—we have always made clear that this should be the case. The issue in hand is how best to apply this principle.
I will remind the House how far the Government have moved. The evidence list has been very significantly lengthened to include protective injunctions, criminal conviction or ongoing proceedings, undertakings, police cautions, evidence of admission to a refuge, evidence from social services and GPs, referral to a multi-agency risk assessment conference and a finding of fact by the courts. We have doubled the time limit on evidence to two years, other than for convictions, where the only limit will be if the conviction is spent. This is a wide-ranging evidence set, which we are confident will meet the needs of victims in these cases.
I remind the House that our package of proposals contains two very important safeguards that will provide genuine victims with a route into legal aid even if they do not have the headline forms of evidence, the need for which may not have been fully appreciated. One is a finding of fact by the court. This is not part of the UK Border Agency list, which is often cited when assessing proposals, but it is extremely important because it means that where someone does not have the evidence we have stipulated but the courts determine that domestic violence is a relevant factor, perhaps on the basis of evidence from friends or family or a domestic violence support organisation, legal aid will be triggered. As such, even in older instances of domestic violence that go beyond the two-year limit, funding will still be available where a court has determined that it is still pertinent to the case. Of course, there remains the more generic safeguard of the exceptional funding scheme.
I submit that this package represents significant movement by the Government. I remind the House that we have now accepted the ACPO definition of domestic violence in full. We have listened and we have learnt from what noble Lords, Members of the House of Commons, and others said about our proposals. We absolutely agree that victims of domestic violence should receive legal aid. However, other than in protection cases, there needs to be evidence, and this should be covered in regulations because of the level of detail that will be required. This package is now worthy of support. The House of Commons gave its support to this, and now should we. I beg to move.
Motion B1 (as an amendment to Motion B)
Baroness Scotland of Asthal
Leave out from “House” to end and insert “do insist on its Amendments 2B and 196B”.
Baroness Scotland of Asthal
My Lords, I listened with very great care to what the Minister said in support of his Motion. I listened to see whether there had been significant movement in the Government’s understanding of the damage that the restriction that remains in relation to domestic violence provision would do to victims, to their children and to the men engaged in this sort of behaviour. I have to say that I listened with disappointment.
I do not hesitate to adopt all the comments made by the noble Lord, Lord Pannick, on the Government’s approach to Part 1 of the Bill. I reiterate immediately my appreciation for the fact that the Government have at last moved on definition, and to an extent in relation to the evidential gateway, but I find myself echoing what was said by the noble Lord, Lord Pannick: it was something that we should not have had to ask and press for for so long. It should have been freely and immediately given because it was founded on a fundamental joint understanding of domestic violence, which had been shared, I believed, by all sides of the House for the past 13 years of our Government, and which I was innocent enough to believe was still shared and understood today.
In looking at the amendments, I reassure the noble Lord immediately that I understand that the Government seek to break with the past and with the way in which we provided justice for individuals in our country through the provision of legal aid. That is something that I understand and regret. I also acknowledge that it is the Government’s intention to limit their exposure to costs incurred by legal aid and to narrow the scope of provision. At the moment, 265,000 people a year get legal help. That will reduce by 79 per cent to 55,000 under the Bill. I understand that that is the Government’s intention and it is something that I regret. At the moment, 112,500 people a year get legal representation. This will reduce by 40 per cent to 67,500 people a year under the Bill. That is something I also regret.
The impact that changes to private family law and legal aid will have on women is another area where it was accepted in the equality impact assessment in the reform of legal aid consultation that it would be the largest number of potential users of legal aid who would be affected by these reforms. It was also accepted that clients in this category were more likely to be female than in any other category of law except education. They represent 63 per cent of total clients, excluding those who have not identified their gender. This proportion exceeds that of the 16-plus population, which is 51 per cent, and that of all affected cases involving females, which is 56 per cent.
I accept that it is an intentional policy decision by the Government to remove that support. I have just told the noble Lord that that is something that I regret, but I accept it. However, we have to look at the provision that will be lost if the amendments go through. The noble Lord knows that at the moment, for ancillary leave proceedings, if an applicant fulfils the financial criteria and is given legal aid, any money that they receive over and above £2,500 can be recouped from them by the Legal Services Commission. If the person has money, £2,500 is the extent of the support that we as a country are minded to give litigants.
The noble Lord knows only too well that the longevity of the domestic violence issue far outlives a two-year period. Many women will never go to the police, to local authorities, to refuges or to their GP. They simply run. Sometimes they run to their families, and sometimes they do not even seek ancillary relief. However, those women and their children will still have to respond if the perpetrator brings ancillary relief proceedings against them, whether in relation to maintenance, residence or contact, and if that comes after the arbitrary two-year time limit, the perpetrator, who will often be the more financially advantaged, will have the wherewithal to bring those proceedings, and the victim and her children will have no legal aid to support them. That is why, unlike the noble Lord, Lord Pannick, I will insist that we look at this again. The other place gave cursory attention to these issues. If this is the only issue that will be returned to it, perhaps it will be able to consider it at greater leisure. If it does, perhaps the sagacity of this House will assist it to do a little better than it has to date.
The Lord Bishop of Chichester
My Lords, I strongly support the noble and learned Baroness in everything that she has just said. She has very starkly set out the figures and the likely impact of not sending this back to the Commons. She has quite rightly said that people could die as a result.
It is hard to engage in this discussion without having a rerun of the long debate that we have just had about the non-pursued Pannick amendment. It seems to me that we are in considerable confusion—and I have to say, with all due respect, that I do not think that the Minister helped us at all in this—about whether what is really at stake is the focus, orientation and purpose of the Bill, or whether it is a genuinely financial provision. We are really—I nearly used the expression “having the wool pulled over our eyes”. I feel profoundly unsatisfied and unpersuaded by what we heard earlier this afternoon.
This boils down to the question of what kind of society we want to live in, and that is why it was so important to pursue the amendment in the name of the noble Lord, Lord Pannick, earlier on. I know that we have lost that, but this amendment gives us one more chance to say to the House of Commons, “If we do not get this right, people—in numbers that we cannot calculate, but certainly there will be people, women and children mainly, but some men as well—who will die as a result”. I want to give the strongest possible support from these Benches to the noble and learned Baroness, Lady Scotland. I hope very much that we will support her this afternoon.
Baroness O'Loan
My Lords, the serious dangers of restricting legal aid in this area have been recognised by Members of this House and the other place and by the third sector as well as by the churches. The leaders of the Christian, Sikh, Jewish and Hindu communities have all written to the Lord Chancellor saying that the Bill risks leaving domestic abuse victims,
“in dire need of support but without the ‘right kind of evidence’ to secure it”.
They also warn that,
“arbitrary time-limitations on the validity of evidence risk leaving victims without access to support, even when they may still be at risk of further abuse”.
There is no accommodation for those who cannot secure admission to a refuge because it is full, or they have complex needs, or they have little boys who are older than 11, or perhaps because they fled an abusive situation, going to a friend or relative rather than to a refuge. Or even because, unable to access a refuge, they have still accessed non-residential domestic abuse services. There is no logic in excluding these women. Their need is not necessarily any less, and may indeed be greater, than those who manage to make it into the refuges.
Bringing time limitations on the validity of evidence in line with the civil standard would be an appropriate and fair move, not least, as the noble and learned Baroness, Lady Scotland, has said, because of the considerable time—if it ever happens—that it takes victims to be able to face legal process.
Without these changes our legal system will let down many of the most vulnerable people in our society. It will leave them potentially trapped in violent and abusive circumstances. The risks of that are potentially grave if not, as the right reverend Prelate said, fatal.
Lord Macdonald of River Glaven
My Lords, I spoke on the issue of domestic violence on a number of occasions during the Bill’s passage. As the noble and learned Baroness, Lady Scotland, said, domestic violence is a phenomenon that breeds insecurity, violence and, as we know, sometimes death. Perhaps as bad as any of those, it travels across generations, repeating itself over and over, in worse and worse spirals of crime. In recent years, as noble Lords know, very much progress has been made by people working in social services, by medical professionals, lawyers, judges and others, in recognising and identifying domestic violence, sometimes in prosecuting it—winning convictions more often than we used to—and in dealing appropriately with its victims.
My concern was that, in its original form, the Bill plainly failed to heed some of these lessons. It failed to recognise that victims do not always present themselves in predictable ways, and that the justice system should—indeed must—offer a broad, expansive and empathetic approach to this crime, and to the victims of this crime.
I had two particular concerns. First, the definition of domestic violence within the Bill was far too restrictive, much more restrictive than the definition that is employed by ACPO and the CPS regularly, successfully and happily and to the good understanding of all agencies involved, including the courts. Secondly, I felt strongly that the range of material allowed to evidence domestic violence so that there was a gateway into legal aid for its victims was far too narrow. I am inclined to agree that neither of these defects should ever have been in the Bill in the first place, and I was surprised, to be frank, that they were.
I am extremely grateful to my noble friend, who has been happy—perhaps I do not know how happy he has been—to have many conversations with me on this topic. I am grateful to the Secretary of State, the Lord Chancellor, as well. I believe that the Government’s response has been broad. I have enormous respect for the noble and learned Baroness who, when she was a distinguished Attorney-General, was an inspiration to prosecutors on this topic, as well as on many others. Her distinguished period of office is remembered with great affection in the CPS.
The Government have adopted the ACPO-CPS definition, for which we were asking since before Report stage, and included it in the Bill. I commend them for that. They have also broadened significantly—with respect, more significantly than some noble Lords’ speeches have allowed—the categories of evidence that will trigger legal aid in these cases for the victims of domestic violence, including evidence from social services and medical professionals in addition to the other gateways which existed, and where the court wishes to consider a finding of fact that domestic violence exists so as to grant legal aid, it can consider matters such as police call-outs and referrals to domestic violence centres, as the noble and learned Baroness, Lady Scotland, has called for.
After considering the Government’s response with as much care as I can, I have concluded that this has been a strong example of a Government who were clearly—and who, with respect, had been badly in error, in my view—listening to the concerns of this House and responding. For my part, I shall support the Government on this issue.
Lord Blair of Boughton
My Lords, I lent my name to the first iteration of the amendment put forward by the noble and learned Baroness, Lady Scotland. I want to speak again for a moment about this. I accept and, as has the noble Lord, Lord Macdonald, I praise the Minister for the movement that the Government have produced. However, in my experience of 35 years of dealing with these kinds of cases, there is something very specific about a certain category of offender, including the offenders of child abuse, domestic violence, stalking and partner rape—namely, their deviousness and the control that they exercise on their victims. Therefore, I strongly support the idea that we should not let down this group of victims by imposing an arbitrary limit on the time in which the evidence can be produced in a way that will provide legal assistance to those victims.
Some of your Lordships will be experienced enough to remember the great Erin Pizzey, who was the first founder of women’s refuges. Her book had the most staggeringly accurate title about the kind of man who would commit these offences. I do not mean to say that there are no women who do this but we are primarily talking about men. The title of that book was Scream Quietly or the Neighbours will Hear. I think that we should say, just one last time, will the Government please look at this time limit again, because this group of offenders works in a completely different way from most other criminals?
The Earl of Listowel
My Lords, I wish to speak about the time limit as regards the abused children who come under paragraph 1 of Schedule 1. The noble and learned Baroness referred to these children. I have been approached by the Grandparents’ Association and Grandparents Plus, which have expressed their deep concerns about the time limit. For example, in the case of a mother who is a drug addict, child protection proceedings may be started. The mother may enter prison or disappear from the scene for some time and the grandparents step in to care for the child. The mother may return to the scene but is not be happy with the situation and wants to have her child back. The grandparents would need to apply for a special guardianship order or a residence order.
It would be helpful if the Minister would be prepared to go even further as regards paragraph 11 of Schedule 1 and lift the time limit in order that those grandparents who provide such an important role do not risk having to invest their life’s savings in trying to protect their relationship with the grandchild for whom they are caring.
Lord Mackay of Clashfern
There is one question I would like to ask the noble and learned Baroness. I understand the point about time limits; I listened carefully to what was said about that. I tried to follow fully what she was saying and I think that, on the whole, I succeeded in doing that. However, she said—and I know that this can happen—that a woman subjected to domestic violence may do nothing about it at the time and then wants to bring it up, very properly, later on. I do not at the moment see where that situation is covered in her amendment. I can see the relevance of the time limit, but when the woman in question has not done anything about it at all—except suffered it, which is enough—I do not at the moment see that that situation is covered, unless it be of the type prescribed in regulations. That is an open-ended thing, but so far as the rest of it is concerned—having listened, I hope, carefully and understood fully, I think, what the noble and learned Baroness was saying—I have not quite grasped that particular point.
Baroness Scotland of Asthal
I hope that I can help the noble and learned Lord. On the last occasion on which I spoke, I said that I accepted that even my amendment would leave out many people who needed and should have help and assistance, and that I was not happy that even my amendment would go as far as it should, but I was drawing back from the ideal, accepting that the Government wanted a very narrow gateway. That is point number one.
Point number two is that if, in such a situation, the woman had available to her and could produce evidence that there had been a number of police calls to her home, notwithstanding the fact that she had not pursued it to the extent of asking for or supporting a charge and a conviction, then she would still have evidence available to her which she could rely upon, notwithstanding the fact that while the parties lived together she had not pursued it as she should have. One reality that we have had to face for a number of years is that, quite often, victims will hide from the perpetrator, as opposed to confronting him, but there are occasions when the perpetrator will find and pursue the victim and then the victim has no choice but to respond. It is in those sorts of cases that, if we do not give a greater degree of flexibility, we will find that there is difficulty. That woman might have not gone to the refuge, but she may have received telephone or other support from it indirectly. Therefore, part of our amendment is asking for not only admission to a refuge to be included, but also other evidence that could be given by the third sector or professionals to say that there was valid evidence upon which the woman would be able to rely to prove that there had been domestic violence.
Baroness Hamwee
My Lords, I hope that my noble friend, in responding to this, can help the House as to how extensive regulations can be to cover the concerns that have been expressed. I have spoken on many occasions over the years about domestic violence, and my response to a lot of what has been said, particularly comments made by the noble Baroness, Lady O’Loan, whom I respect enormously, is to think that we should be doing more with the services that we give to, mostly, women who find themselves in this situation. However, that is about services—refuges and other sorts of help—and it does not go to the evidence, so I hope that my noble friend can help expand on the answer that we have been given by the Commons: that regulations should deal with these matters.
Lord McNally
My Lords, the noble and learned Baroness, Lady Scotland, is a powerful advocate. Throughout, she has presented a case against the Government which I am sure has swayed a number of your Lordships. That is why I sometimes get a little bit exasperated. For example, the right reverend Prelate says that the wool was pulled over his eyes, but I assure him that I made every effort to make clear where we are going, how we are going there and why we are going there on this Bill. Rather like the outgoing Labour Government in their manifesto, we sought to cut legal aid. The noble and learned Baroness read out a load of statistics that suggested that this Bill might achieve that purpose. I point out that part of our approach from the very start was to try to move away from litigation to arbitration, mediation and the alternative settlement of disputes, and we will do so in the various parts of the legal system that were covered by legal aid.
I worry sometimes when I listen to the language that is used. I heard what the noble Baroness, Lady O’Loan, said, and I read in a Sunday newspaper that women who could not get into refuges would be denied legal aid—as if that was it, and they were like Oliver Twist being turned away from the workhouse door. The noble Baroness knows that that is not true.
Baroness O'Loan
My Lords, with great respect, I did not say that women who could not get into a refuge would necessarily be excluded, but it is a fact that that is one of the forms of evidence. If you do not have either that form of evidence or the other forms of evidence that are required, you will not get in.
Lord McNally
But isolating one aspect and saying that if a woman goes to a refuge and cannot get in she will not get legal aid ignores the fact that I have put before the House—the whole list of options that people can turn to. I do not think that it serves the case of women subject to domestic violence to somehow suggest that the passing of this Bill will cut them off from legal aid. The fact is that we will be spending something like £120 million a year in legal aid in this area of law. As I pointed out in my opening remarks, one thing that I am most proud of about this Government is that we have put funding into domestic violence issues in a very detailed way—in a way to which the noble Lord, Lord Blair, referred.
We are talking about a very specific area of assistance in a very specific area of law, with victims seeking legal aid for private family matters. With her skills, the noble and learned Baroness, Lady Scotland, has turned this into a debate again and again on who is in favour of helping domestic violence victims, and who is against. I think that is a clever way of putting it to the House, but it is not a fair way. We have tried and listened and moved on all these areas. Long ago, the request from the Opposition was for the ACPO definition; when the ACPO definition was conceded, it was the UK Border Agency that became the mark. The fact that we have done ACPO-plus does not seem to matter. The fact that we have brought in funding for specific aid in this area does not matter. We will always find there is another bar to clear, so that as noble Lords come in asking, “What’s this about?”, it can be said to them, “It’s about voting for legal aid for those affected by domestic violence”. But legal aid is there for those affected by domestic violence. The criteria by which they qualify have been widened. We have listened to this House and acted on its advice.
On the point raised by the noble Earl, Lord Listowel, about family legal aid in children and kinship, where private family law proceedings are being taken as an alternative to public law proceedings—for example, where it is more sensible for grandparents to care for a child rather than the parents—legal aid will be available. If there is evidence of child abuse, it will also be there. I will look at the further points the noble Earl made, and if I may I will write to him, but we believe that exceptional funding will also kick in in this area.
The noble and learned Baroness, Lady Scotland, is a powerful and sometimes an emotive advocate but it is sometimes worth cutting through the emotion, and I ask the House to do that—to cut through the threat that this will cause death—and look at the facts. The fact is that this Government have listened and extended the criteria for this form of legal aid beyond what the House first asked for. This Government have put real money into real, pioneering services in terms of this terrible scourge of domestic violence. The Commons has considered this, and was right to return it to your Lordships. I believe this is the moment to ask your Lordships to accept the view of the Commons. I beg to move.
Baroness Scotland of Asthal
My Lords, perhaps I might say to the Minister straight away that I hope it has been clear from everything I have said that I have always believed, and still believe, that all sides of this House—and, I hope, of the other place—are of one mind in the approach that they take towards helping domestic violence victims. Nothing I have said from this Dispatch Box has undermined that. What I have been clear about is that this Government have been wrong not to widen the gateway. With respect, we have consistently argued about the time limit and the evidential criteria, right the way through, and we have not changed.
I also say gently to the Minister that in looking at reducing litigation, the one happy thing about domestic proceedings—both in private family law and in relation to domestic violence cases specifically—is that family lawyers worth their salt always appreciate that if a family has got to the stage of having to litigate, they are dealing with damage limitation and not winning or losing. That is why only about 5 per cent of the cases ever go right the way through into contested matters, so in this area of law we are not looking at cases running away and people litigating when it is unnecessary. The Government are continuing the approach that the previous Government took in advocating mediation whenever it is proper.
However, we have a difference of view. I thank the noble Lord very much for his compliments about my advocacy, but I have to tell him that this is not about advocacy. This is about truth and fact, and if I do nothing else I will always stand side by side with the victims of abuse. I believe that is where the Government should be too.
Lord McNally
That this House do not insist on its Amendment 31 and do agree with the Commons in their Amendment 31C.
“Sections 43 and 45 and diffuse mesothelioma proceedings
(1) Sections 43 and 45 may not be brought into force in relation to proceedings relating to a claim for damages in respect of diffuse mesothelioma until the Lord Chancellor has—
(a) carried out a review of the likely effect of those sections in relation to such proceedings, and
(b) published a report of the conclusions of the review.
(2) In this section “diffuse mesothelioma” has the same meaning as in the Pneumoconiosis etc (Workers’ Compensation) Act 1979.”
Lord McNally
My Lords, I would like to start by paying a sincere tribute to the noble Lord, Lord Alton of Liverpool, for his vital role in pursuing his cause conscientiously and relentlessly. I know how conscientious and relentless he can be when he gets hold of a campaign, this time in the cause of mesothelioma victims and their families. I know others have followed his lead, but, as he pointed out, when this Bill first came before the House, there was no mention of this cause and he has, quite literally, put it on the front pages. He can take great personal credit for helping us achieve the position we have reached today and on which I hope all sides can agree.
In the past few days, we have had the opportunity to debate at some length issues in relation to the plight of sufferers of this terrible disease. I and ministerial colleagues have also held a number of meetings with the noble Lord, Lord Alton, and others, including my noble friend Lord Freud, which have been extremely productive. I am grateful for the general recognition of the value of what the Government now propose in respect of a pause in commencement of the reforms in Part 2 in relation to mesothelioma.
Let me be clear about what we are doing. The Jackson reforms in Part 2 of the Bill are due to come into effect in April next year. They will continue to come into effect then, except in so far as they affect mesothelioma claims. Mesothelioma claims will therefore continue for the time being with the current arrangements of recoverable success fees and insurance premiums. As I informed your Lordships on Monday, we are working hard to agree an acceptable scheme to help victims who are unable to trace their employer’s insurers; as I said, I hope that we will be in a position to make an announcement before the Summer Recess. The arrangements for any new process will obviously take some time to bring forward. We will review the position in due course and publish the findings of that review. Only after we have done so, and we are satisfied that the time is right to implement the provisions in Part 2 in relation to mesothelioma, will we do so.
Amid general approval in the House of Commons yesterday, one issue was raised which related to the terms of the review that we have committed to undertake. I hope that your Lordships will understand that I cannot say much more at this early stage about the precise terms of that review, but it will be a proper and appropriate one. My right honourable friend the Lord Chancellor will publish the results, and we will not commence our reforms as far as mesothelioma is concerned until we are satisfied that a structure exists which enables swift and fair compensation for victims and their families.
The strength of feeling in this debate has been palpable and genuine. I am glad that we have been able to meet some of the concerns expressed by tabling the amendment that we have. I beg to move.
Lord Alton of Liverpool
My Lords, I first thank the Minister for the kind remarks at the outset of his speech. I suspected that he might have meant that I have been a bit of a pain in the neck on this subject.
Lord Alton of Liverpool
He put it rather more elegantly. The Minister having had a tough time during proceedings on Part 1 this afternoon, he will be glad to know that I can be very warm in what I am about to say to him, and also to the noble Lord, Lord Bach, and my good friend, the noble Lord, Lord Avebury, for the encouragement and support that they have given me as I have taken this amendment forward at every stage of the Bill.
It puts me in mind of a passage from EM Forster’s book, Two Cheers for Democracy. He said that only “love, the beloved republic” deserved three cheers, but that sometimes the cantankerous, difficult, awkward Member of Parliament who sees some minor injustice and is able to get it right is the justification for our system. I suspect that that is something that unites us on all sides of this House and, indeed, in another place as well. On that note, the noble Lord, Lord Cormack, is about to intervene.
Lord Cormack
I was going to draw the House’s attention to the fact that our dear friend Tam Dalyell from another place recently published his autobiography and entitled it The Importance of Being Awkward.
Lord Alton of Liverpool
I am happy to be in the company of another member of the awkward squad on this occasion; I was happy to be in the Division Lobby with the noble Lord, Lord Cormack, during earlier proceedings on this Bill. Although it has not been possible for us to achieve all of the things that we would have wished to achieve during the proceedings, it speaks well of your Lordships’ House that we were willing to send back to the House of Commons for the second time, on Monday, the provisions in the Bill which relate to men and women who have been exposed to asbestos and, as a result, have developed the fatal illness of mesothelioma.
Yesterday in another place, Mr Jonathan Djanogly, the Parliamentary Under-Secretary of State, moved an amendment in lieu of Amendment 31, which was agreed in the other place, as the noble Lord has told us, without Division. The amendment specifies that the mesothelioma provisions may not be brought into force until the Lord Chancellor has carried out a full review of their potential impact and has published a report on the conclusions of the review. The practical effect of this is that terminally ill victims will not have to surrender up to 25 per cent of the compensation which they have been awarded in success fees over and above the base fees which lawyers will already have received. There is now an opportunity to recast what many of us believe is, in any event—and the noble Lord, Lord Thomas, alluded to this during our proceedings earlier in the week—an immoral use of success fees in cases where causation is not in issue, as well as to devise a new scheme which the noble Lord, Lord Freud, told us on Monday is now being worked on by the Department for Work and Pensions.
Therefore, before we leave this matter I would like to ask the Minister—and during a conversation yesterday I was able to give him some notice of my intention to do this—if he would clarify one or two questions which arise from the Government’s announcement and the amendment in lieu. First, is the Minister able to assure us that there will be absolute synchronisation between the Ministry of Justice and the Department for Work and Pensions to ensure that the mesothelioma provisions in the Bill will not be implemented in advance of the new regime coming into force? Secondly, Mr Jonathan Djanogly told the House of Commons yesterday that the new proposals,
“could well require DWP legislation, in which case we would look to roll the ending of the provisions into the commencement of the DWP provisions”.—[Official Report, Commons, 24/4/12; col. 839.]
That would certainly be the best way to proceed; can the Minister tell us when he expects his noble friend Lord Freud to be able to make a statement on the shape of the new scheme and whether there will be formal consultation with victims’ groups and other interested parties before a Bill is introduced? Also, do we have any idea of a timetable for the proposed legislation?
Let us assume for a moment that such a scheme—which has proved elusive in the past—were not brought forward, and that the insurance industry simply decided to play fast and loose with the Government: what would the Government do in those circumstances? Would they simply rely on the outcome of the review which they have instigated, and if the internal Ministry of Justice review concluded that it wanted to proceed with the mesothelioma provisions which have now been suspended, can the Minister assure us that there would be robust parliamentary scrutiny and opportunities to contest such an outcome? Will formal commencement orders be required, for instance, before the now dormant mesothelioma provisions in the LASPO Bill can be put into effect? Would such orders be introduced by statutory instrument, and, if so, is it the case that they would not be subject to parliamentary debate? In those circumstances, can the Minister assure the House that the Government would find a way for both Houses to be able to return to this question? It would be a pretty unsatisfactory situation if we were unable to do that.
With regard to the review itself, will it be conducted entirely by Ministry of Justice officials? Will the Minister at least reflect upon the desirability of involving some independent voices—perhaps, at least, a representative of one of the asbestos victims’ groups? Will those conducting the review call witnesses, take evidence and have a record of proceedings—will it be transparent?
I will end by making two short observations. First, as I have said, I am extremely grateful to all noble Lords, and indeed honourable Members of another place, who have supported this amendment at every stage. In particular, I want to put on the record that the right honourable Member for Wythenshawe and Sale East, Mr Paul Goggins, and Tracey Crouch, Member of Parliament for Chatham and Aylesford, gave considerable help, across the political divide, to ensuring that the case there did not go by default. The cross-party concerns which were raised in this House and in another place, and which were followed through by votes in the Lobby, were crucial in persuading the Government to think again.
I also pay tribute to the indefatigable efforts of Mr Tony Whitston of the Greater Manchester Asbestos Victims Support Group, whom I met with the noble Lord, Lord Avebury, and Mr John Flanagan of the Merseyside Asbestos Victims Support Group, for keeping these issues before us. The information and case histories which they have provided have been focused, understandable and rooted in their own day-to-day experience of working with the victims of this killer disease. Their resolve and dignified approach do them, and those who they represent, great credit. I know how grateful they are to your Lordships for insisting that their case be heard.
Secondly, and rather topically, this outcome says something about the particular strength of your Lordships’ House. Like the Minister, I served in another place for 18 years before I stood down. When the Bill came to us, I was staggered to find—as the noble Lord mentioned at the beginning of his remarks—that the issue of mesothelioma, which has after all claimed the lives of 30,000 British people, had not been debated or scrutinised at any stage. I repeat the observation I made on Monday last, that that is a vivid example of the vicious use of guillotines and programme Motions. The revising role of this Chamber—carefully scrutinising legislation and assessing its impact—is a strength that should not be lightly dismissed.
Finally, in three days’ time it will be Workers’ Memorial Day, which commemorates those killed, injured or made ill through work—a day that is meant to highlight the importance of good health and safety in the workplace. Asbestos disease is often called “the widowmaker”. In 2010, asbestos-related diseases accounted for 93 per cent of all industrial injuries disablement benefit payments for respiratory disease. It is a wretched disease—a death sentence with fatal consequences. All over this country, men and women were exposed for decade after decade to toxic substances, mainly at work, which ruined their lives and cost many their lives. As well as those 30,000 who have already died in the United Kingdom from mesothelioma, an estimated 60,000 more are yet to lose their lives due to past exposure—the vast majority of which, of course, occurred at work. The victims of this disease sacrificed their health and often their lives while working to support their families and contributing to the wealth of this country.
Throughout our debates, I have argued that it is iniquitous that such people should have to surrender up to 25 per cent of the damages they have been awarded. Happily, the Government have been persuaded that there is no racket involved in these cases, no ambulance chasing, and no compensation culture. They are right to have thought again, and I welcome that. We all now wish them well in coming forward with a far better approach to dealing with such cases. Linked to that is a promise that we remain diligent in monitoring the progress that has been made.
Once again, I am appreciative to the House for the support and encouragement that it has given in pursuance of this important matter.
Lord Avebury
My Lords, I want to add only a few words about the outstanding role of the noble Lord, Lord Alton, in leading this campaign during the proceedings on the Bill over many weeks and months. I do not think that anybody else could have had the success that he has achieved, because he is one of the most assiduous Members of this place. If he likes the label given him by the noble Lord, Lord McNally, it is a title that he well deserves and which we would all be proud to wear.
I want to add only one question to those that have already been posed. In the review of the potential impact, will it be possible for asbestos victims and their relatives to make representations and be heard orally by those conducting the review? This is important, if I may say so, because some of the material provided to us by Tony Whitston was of great importance in deciding certain questions—in particular, whether or not people would be deterred from taking proceedings if the Bill had come into effect in its previous form. There was abundant written evidence from victims that if they knew that 25 per cent was going to be deducted from their damages, they or their bereaved relatives would not have bothered to go into the fray. It is important that that evidence is presented to the review.
Perhaps I may say, finally, how grateful we are to my noble friend Lord McNally, because he has listened carefully all the way through. In particular, as he mentioned earlier, he was willing to meet the noble Lord, Lord Alton, myself and others, and take carefully back to his department the arguments that we put. That meeting and the further meetings that the noble Lord, Lord Alton, had with him have been instrumental in enabling the Government to arrive at this welcome conclusion.
Lord Wigley
My Lords, I also welcome the Government’s shift on this matter. I am sure it is one that will give the noble Lord, Lord McNally, considerable satisfaction, given the family dimension and his understanding of this condition. It will, I hope, be of considerable benefit to many thousands of sufferers and their families. I join in congratulating the noble Lord, Lord Alton. I am aware of his campaigning ability from many years in another place. We campaigned sometimes together and sometimes on opposite sides. When one was on the opposite side, my goodness, one knew one had a contender to deal with. The diligence that he and other colleagues across parties have applied to this issue will be of considerable satisfaction to the groups of campaigners who represent sufferers and their families.
I want to raise a couple of points with the Minister. I note with interest that the definition of diffuse mesothelioma used here is the one that was incorporated in the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. Another dimension of what he mentioned a moment ago is the fact that there are still people who cannot trace their employers or pinpoint which employer was responsible at the time at which the disease may have developed. That is the case for a number of diseases. The 1979 Act, as noble Lords will remember, arose largely from the position of slate quarriers, but many other workers were affected in the cotton and pottery industries and some in the steel industry.
I am not going to reopen the debate that we lost the other night. We lost that one, and so be it, but there will be some cases in which there is suffering that is not covered by any other provision. When the review is undertaken, I hope that some consideration can be given to whether there are other cases of industrial workers who have suffered loss of health, and in many cases loss of life, and do not have an avenue through which to get compensation. If they do get compensation, they should not have that compensation unreasonably eroded. I hope that can be taken on board by the DWP. I understand that the noble Lord, Lord Freud, the Minister in the DWP who may be handling this, also has a good understanding of the suffering that arises from these conditions, so hopefully we can make progress.
Finally, this may be a lesson for us in this House to try and try again. We could have abandoned this the other night without insisting on the amendment that we put through to the other place. We did not and that is what enabled progress to be made on this occasion. There may be other instances when we need to be equally tenacious and determined in order to make sure that the other place gives adequate attention to a subject and that progress such as this can be made.
Lord Thomas of Gresford
I add my congratulations to the noble Lord, Lord Alton, on all the very hard work that he has put into this matter. I also pay tribute to the work of the Greater Manchester Asbestos Victims Support Group, in particular to Tony Whitston, who has lobbied so hard on behalf of victims; and there are other support groups, such as the Merseyside support group, which have lobbied just as hard.
I argued on Monday that success fees ought not to be claimed by solicitors in this type of case. I was pleased to hear the Minister in another place, Mr Djanogly, say yesterday:
“this is not an issue of causation. I heard Lord Thomas speak in the other place yesterday, and I very much agree with what he had to say, which was essentially that in cases in which causation is not an issue, there is—in many respects—no reason why solicitors should have a success fee for that type of work”.—[Official Report, Commons, 24/4/12; col. 831.]
I was strongly supported on Monday by my noble friend Lord Faulks, and I am grateful to him for the concern that he has shown on this issue. An objection was made by the noble Lord, Lord Bach, that it was impossible to guarantee that solicitors would not charge a success fee against their clients’ damages.
I interjected that if public opinion saw it as an abuse, no doubt the Lord Chancellor would step in to deal with it by way of regulation. There is another way in which this issue could be approached. I suggest to Mr Whitston, his excellent organisation and other similar support groups that he should draw up a list of solicitors who have indicated to him that they would not charge a success fee when, ultimately, the new regime for CFAs is introduced for mesothelioma sufferers. The support group could receive applications from solicitors to be put on an approved list and satisfy itself that firms that are accessible to victims in those industrial parts of the country where the disease is most prevalent—shall we say Newcastle, Leeds, Manchester, Birmingham, Bristol and, of course, the industrial areas of north and south Wales?—are geared up and competent in this area of work. Sufferers from mesothelioma turn to the support groups, and if they had a list of solicitors who had undertaken not to charge success fees against the damages they receive and who they are satisfied are competent, that would be a great way forward.
Lord Wigley
I follow the point that the noble Lord made the other night; I well understand it and have some sympathy with it. Clearly, if the sort of provision he is suggesting were to be made, it would be very helpful. Does he feel that it should be limited to mesothelioma, because there are many other cases of compensation in which it is equally unreasonable that there should be a deduction of up to 25 per cent from the compensation?
Lord Thomas of Gresford
The noble Lord will recall that on Report, I referred not only to cases of mesothelioma that Mr Tony Whitston drew to our attention from the Brymbo steelworks in Wrexham but to cases of pneumoconiosis that I have known. He is a slate quarry person; I come from a colliery area and I know of the long-term suffering of those victims. With mesothelioma, that could be done now and could be extended to other diseases in due course.
The support groups would be uniquely placed to monitor the service that such firms gave to mesothelioma sufferers, who could report back on their experiences to both the support groups and their successors. That is the answer to those who say that solicitors will not do this work at all unless they are cosseted by success fees. It spreads the work around the country to areas that are particularly concerned with this disease, where experience could be built up by firms of solicitors. It may discourage any idea of focusing litigation of this type in the City of London branch offices of firms that then claim to be paid at City of London rates. Anecdotal evidence suggests that that happens in some CFA cases.
As my noble friend Lord Faulks said on Monday, there are lawyers who are dedicated to achieving the best result for their clients and not so much for their fees. I have no doubt that they would flock to be placed on an approved list and forbear charging a success fee at all. I hope that such an approach will appeal to the Minister, the Lord Chancellor and the Ministry of Justice.
Lord Bach
My Lords, I begin by congratulating the Minister on being a member of the luckiest Government there can ever have been in the history of Parliament. The odds against drawing three votes on crucial amendments, two on Report and one at this stage of proceedings so that the Government win the vote, as it were, must be immense. He has managed to do that and I congratulate him on it. I just hope for his sake and the Government’s that their luck does not begin to run out.
On this issue, the Minister also deserves some congratulation if, as I suspect he did, he played a part in persuading his fellow Ministers, and the right honourable and learned gentleman the Lord Chancellor, that there had to be some give or concession. If he played a part in that, I congratulate him and think that he has served the House well in that regard.
I, too, want to compliment those outside the House. As the noble Lord, Lord Alton, stressed, the co-ordinator of the Greater Manchester Asbestos Victims Support Group, Mr Tony Whitston; Mr John Flanagan, the Merseyside equivalent of that organisation; and many others outside have worked incredibly hard to make sure that people who do not always have a very loud voice have had a say in Parliament—or rather in this House of Parliament. It is absolutely clear that when these matters were raised in the House of Commons when this Bill was first taken through, they were completely dismissed. It was only when the Bill came to the House of Lords that the noble Lord, Lord Alton, with his usual courage and zeal, managed to raise these matters, with the help of the noble Lords, Lord Avebury and Lord Wigley. Eventually, at the very last minute, he got a concession from the Government.
I pay tribute, too, not only to those I have mentioned but to the noble Baroness, Lady Doocey, the noble Lord, Lord Avebury, and the Conservatives who abstained in the vote on Monday night. Had they not played the part that they did, the amendment in the name of the noble Lord, Lord Alton, would not have gone through. I remind the House that it won by nine votes. If it had been lost there would have been no review or concession; there would have just been rejoicing in the Ministry of Justice. It was as close as that. It is because of the bravery of those who were prepared to abstain or vote against their own Government that we are here today congratulating the Government, quite rightly I am sure, on their concession.
Seriously, it is a good concession and we know, or trust, that the review will be genuine. We look forward to playing our part in making sure that the sufferers of this terrible disease get a fair deal when the Government have had their review. Not only the noble Lord, Lord Alton, but all of us will be watching very closely to see how developments move forward in this very vexed field. As for this House, for once it can congratulate itself.
Lord McNally
I think that if the noble Lord were to ask Señor Torres, he would find that a draw is also sometimes a victory. He is the Chelsea centre forward. I know that the noble Lord, Lord Bach, is a Leicester City supporter and does not mix in that kind of high-class company.
I was very grateful for the comments at the beginning of the speech of the noble Lord. I notice that he quickly tailed off towards the end to start initiating rebellions, and so on. I have continually made the point that I am well aware that any Minister is a bird of passage, but I have always been a lover of this place—I mean the whole Parliament building. I sometimes say when I show visitors around that I never come into this place without a sense of awe for what it stands for and what it does. Anyone who stands at this Dispatch Box takes the buffeting and advice and has to work through very much with the help of the awkward squad. The only problem with the awkward squad is that when one campaign is over it immediately starts on another. I noticed from the remarks of the noble Lords, Lord Avebury and Lord Wigley and, indeed, the noble Lord, Lord Alton, himself that further campaigns will be on the way.
Leveson Inquiry
(12 years ago)
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Baroness Garden of Frognal
My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Secretary of State for Culture, Olympics, Media and Sport. The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement following yesterday’s developments in the Leveson inquiry. Although I intend to respond fully to allegations about my conduct and that of my department when I present my evidence to Lord Justice Leveson, I believe it is important to update the House on actions that have been taken as a result of evidence released yesterday.
We are 273 days into a process whose early stages will last until October. This is not the time to jump on a political bandwagon. What the public and all colleagues want to hear is Lord Justice Leveson’s views after he has considered all the evidence. I do, however, think it is right to set the record straight on a number of issues in light of the evidence heard yesterday at the inquiry.
Specifically on the merger of News Corp with BSkyB, I would like to remind the House of the process I followed. Throughout, I have strictly followed due process, seeking the advice of independent regulators and, after careful consideration, acting on their advice. I have published all advice that I have received from Ofcom and the OFT, together with correspondence between myself and News Corporation, including details of all meetings I have held in relation to this process. As part of this process, my officials and I have engaged with News Corporation and its representatives, as well as other interested parties, both supporters and opponents of the merger.
Transcripts of conversations and texts published yesterday between my special adviser, Adam Smith, and a News Corporation representative have been alleged to indicate that there was a back channel through which News Corporation was able to influence my decisions. That is categorically not the case. However, the volume and tone of those communications were clearly not appropriate in a quasi-judicial process, and today Adam Smith has resigned as my special adviser. Although Adam Smith accepts that he overstepped the mark on this occasion, I want to set on record that I believe that he did so unintentionally and did not believe that he was doing anything more than giving advice on process. I believe him to be someone of outstanding integrity and decency and it is a matter of huge regret to me that this has happened.
I only saw the transcripts of these communications yesterday. They did not influence my decisions in any way at all, not least because I insisted on hearing the advice of independent regulators at every stage of the process.
I will give my full record of events when I give evidence to Lord Justice Leveson. However, I would like to resolve this issue as soon as possible, which is why I have written to Lord Justice Leveson asking if my appearance can be brought forward. I am totally confident that when I present my evidence, the public will see that I conducted this process with scrupulous fairness throughout”.
Baroness Jones of Whitchurch
My Lords, I thank the Minister for repeating the Statement.
It has not come as a great surprise to many on this side of the House, and perhaps around the Chamber, that we are debating this issue this afternoon. For those of us who over the past 18 months have been regularly debating the wisdom of allowing one media organisation to own 40 per cent of market share, it has often felt that the Secretary of State has interpreted the rules so as to give maximum advantage to News Corp’s bid. We may be surprised by the source of the new allegations—old friends settling scores, perhaps—but not the substance.
The Secretary of State’s current predicament might have been averted if he had listened to those of us around this Chamber, and many in the wider media world, who urged him to refer the merger of News Corp with BSkyB directly to the Competition Commission in the first instance. Instead, he chose the quasi-judicial role in overseeing the process that his previous support for the Murdochs would always have left open to question. The serious allegations made in yesterday’s e-mails seem to bear out the concerns that he proved unable to carry out this role in a suitably impartial and transparent way.
There are serious questions at the heart of this issue about the operation of the Ministerial Code, to which the Secretary of State must now be held to account—which is why it is important that he give a full and frank explanation to Parliament rather than waiting for Leveson to take its course. As we have seen over the past few months, many other careers have foundered on the evidence presented to Leveson in advance of his findings, and there is no reason for MPs to be immune from facing up to their immediate responsibilities and failings. Ultimately, it is not the job of the Leveson inquiry to oversee the implementation of the Ministerial Code.
First, therefore, in the light of the Statement, perhaps I may ask the Minister whether the Cabinet Secretary has been consulted on the process now being pursued to scrutinise Mr Hunt’s role, and is he happy that the Secretary of State continues to have responsibility for overseeing the BSkyB bid rather than Parliament? Is it the view of the Cabinet Secretary and the Prime Minister that consideration of any breaches of the Ministerial Code should now be put on hold until the end of the Leveson inquiry? If not, what steps have been put in place to pursue this issue further?
Secondly, in the light of the resignation of Adam Smith, Mr Hunt’s special adviser, does the Minister accept that this does not absolve Mr Hunt from responsibility for the actions of his adviser as set out in paragraph 3.3 of the Ministerial Code? Can she clarify what instructions were given to Adam Smith by Mr Hunt throughout the negotiating period, and whether he specifically disobeyed those instructions? Can we also be told the precise reasons for Mr Smith’s resignation?
Thirdly, can the Minister confirm whether the DCMS Permanent Secretary sanctioned the use of Adam Smith as a go-between with News Corp over that period? Did Mr Smith keep notes of his discussions, and, in the interests of transparency, can she assure us that they will be published?
Does the Minister accept, with the benefit of hindsight, that if there was to be any liaison between News Corp and the department during this highly sensitive period, it would have been better carried out by a departmental official? Does she also accept that it would have been improper for the Prime Minister to have any private discussions with Mr Murdoch on the subject of the bid regardless of whether he had direct quasi-judicial responsibility for the decision? Can she now tell us what the nature of that discussion was and whether it was minuted? If it was, should it not also now be published?
Next, can the Minister explain the rationale of giving News Corp private advance notice of Ofcom’s advice and the Secretary of State’s intentions before they were presented to Parliament, and can she state categorically that those opposing the bid were given equal access to the advance information?
Finally, what is the Government’s response to the question raised today by Robert Peston about the potential involvement of the Financial Services Authority in assessing whether there has been a leak of price-sensitive information? Mr Peston suggests that if Fred Michel did indeed receive advance information on 24 January that Mr Hunt intended to make an announcement the following day that he was minded to accept undertakings in lieu in order to prevent a referral to the Competition Commission, then that had price and market sensitivity and the FSA should investigate. Does the Minister agree that the FSA should be asked to check whether any breaches of financial trading rules were involved?
I do not apologise for raising a range of significant questions on this issue today, as there are important issues of propriety and confidence in government processes at stake. I look forward to hearing the Minister’s answers and would ask her to write if she does not have the full details and responses to hand.
Baroness Garden of Frognal
The noble Baroness asked some highly pertinent and relevant questions on this rather complex and difficult matter. I will answer as best I can while recognising that most of the evidence will be pulled together for presentation to the Leveson inquiry and may not be readily available at this stage.
My right honourable friend the Secretary of State answered extensive questions this morning in the House of Commons on many of the matters that the noble Baroness raised, including the fact that before he took over the BSkyB bid he was on record as having expressed some sympathy with the Murdoch media. He reported that to the Cabinet Secretary and it was fully discussed. He assured the House of Commons that, from the time he took over responsibility for it, he took steps at every stage to demonstrate his impartiality, to ensure that there was openness and objectivity in the process.
My right honourable friend the Secretary of State cited in particular four decisions, each of which were against News Corporation’s wishes: first, that he was minded to refer the bid to the Competition Commission; secondly, that he would not accept the bid until Ofcom and the OFT had advised on issues of plurality; thirdly, that he would extend the consultation more widely; and finally, after the Milly Dowler evidence, that the coalition Government would set up the Leveson inquiry to try to ensure that all these matters were very fully looked into. Now that BSkyB has withdrawn its bid there are matters that no longer need pursuing in that respect, although obviously the reasons behind that and all the factors leading up to it are still open for debate.
The noble Baroness mentioned Adam’s Smith’s resignation. He stated in his resignation letter that,
“the content and extent of my contact was done without authorisation from the Secretary of State. I do not recognise all of what Fred Michel said, but nonetheless I appreciate that my activities at times went too far and have, taken together, created the perception that News Corporation had too close a relationship with the department, contrary to the clear requirements set out by Jeremy Hunt and the permanent secretary that this needed to be a fair and scrupulous process”.
It is certainly a matter of regret that Adam Smith has resigned, but he has obviously taken that decision in the light of events as they have unfolded. The noble Baroness asked whether his role had been agreed by the Permanent Secretary. As I understand it from my right honourable friend, the Permanent Secretary was indeed in discussion regarding the roles at every stage. There is a complex set of contacts at many levels for such a bid, but my right honourable friend has given assurances that he operated with transparency throughout.
On the details of meetings and communications, my right honourable friend stated that he published all relevant material and meetings, and that these are still available on the DCMS website. For the sake of clarity, in response to a PQ from Mr John Mann, he stated:
“Records of meetings, telephone calls held between officials and press officers with outside parties and records of telephone calls and email exchanges between officials and Ministers and outside parties are not recorded centrally and would incur a disproportionate cost to collect”.—[Official Report, Commons, 7/9/11; col. 616W.]
In the light of all that has been published today, we are more than ever aware of just how amazingly convenient e-mail can be and just how amazingly dangerous it can be when misused. Undoubtedly, the evidence that is available will be presented in full to the Leveson inquiry. If there are aspects of other matters that the noble Baroness raised that I have not covered but could, I will indeed take her up on her offer and write to her afterwards.
Lord Fowler
My Lords, although I am very touched by the Government’s faith in the independent review—my noble friend might remember that that was not always the view of her department when refusing to set up an independent review—I wonder whether she agrees that not everything should wait for Leveson, particularly in one respect. Is it not a fact that the current way of deciding media bids is, frankly, now bust? Do not politicians need to be taken out of the decision-making process and a demonstrably independent system, with either Ofcom or the Competition Commission deciding, set up, and set up now? If that change requires new legislation and there is no room in the programme, we can all think of a Bill that can be dropped to make way.
Baroness Garden of Frognal
There is one aspect of my noble friend’s question to which I shall resist replying at this stage. He is absolutely right. Under the Enterprise Act 2002, the Secretary of State has the power to intervene in the public interest and in a quasi-judicial capacity. My right honourable friend is on record as stating publicly that there are very strong arguments for politicians to be taken out of discussions on these sorts of matters and for them to be undertaken by the regulators. We will certainly look to be taking that forward.
Lord Low of Dalston
My Lords, I do not envy the noble Baroness having to answer questions on matters which are so obviously a matter of the personal responsibility of the Secretary of State. However, does she agree that the focus on the Leveson inquiry in this instance is a complete smokescreen? The terms of reference of Leveson, which I have just looked up, are entirely general and directed towards the future. It is not the role of the Leveson inquiry to pronounce on the Secretary of State’s handling of the Murdoch bid for BSkyB. Does the noble Baroness not agree that the Secretary of State has to answer to Parliament and not to Lord Justice Leveson?
Baroness Garden of Frognal
The noble Lord is quite right that Leveson has a very broad remit. However, it is a vehicle for all manner of evidence to be brought into the open and fully discussed. It appears to be doing an extremely thorough job on that basis. The Secretary of State is very well aware that he needs to answer to Parliament, which is one reason why he gave the Statement today followed by a full set of answers to questions. That will continue to be the position. We are not simply pushing these questions to the back of Leveson, but once you have set up an inquiry of this nature, you might also ask—and indeed Lord Justice Leveson has also asked, having set up the inquiry—that it be allowed to proceed.
Baroness Bonham-Carter of Yarnbury
I thank my noble friend for repeating the Statement. As so often, I find myself echoing my noble friend Lord Fowler. Does the Minister agree that this affair demonstrates that there should be safeguards to ensure that no one organisation should be in a position to own a disproportionate share of the British media—which, by the way, is possible thanks only to the Communications Act 2003 and despite prescient warnings by my noble friend Lord McNally and the noble Lord, Lord Puttnam—and finally, as my noble friend said, that decisions on media mergers should not be taken by politicians but openly and transparently by an appropriate and independent regulatory body?
Baroness Garden of Frognal
I entirely agree with my noble friend. As I mentioned in my reply to my noble friend Lord Fowler, these measures are under way. We are not intending to delay taking this forward. We recognise that in the past the Murdoch empire was an enormously powerful factor for both the Labour Party and the Conservative Party. The coalition Government have now set up a thorough inquiry into those matters, which we hope will come up with some really good answers.
The Minister of State, Ministry of Justice (Lord McNally)
Perhaps we may hear from the noble Lord, Lord Puttnam, first.
Lord Puttnam
My Lords, while entirely agreeing with the noble Lord, Lord Fowler, that the situation must change, many of us worked in this Chamber for two years on the Enterprise Act 2002 and the Communications Act 2003 to ensure that no Secretary of State was ever placed in the position in which Jeremy Hunt placed himself. We thought that we had achieved that. I agree with the noble Lord, Lord Fowler, that we need to find another way forward.
However, I have a greater concern that I will put to the noble Baroness. On 9 July 2009, David Cameron, who was then the Leader of the Opposition, made a speech that became known as the “bonfire of the quangos” speech. He mentioned only two quangos but picked out Ofcom as one that needed to be trimmed back and to have its powers curtailed. I do not think that there is anyone in this Chamber or in the other place at the moment who would suggest that this is a moment for Ofcom’s powers to be curtailed. Three months later, the Sun came out in support of the Conservative Party. Was this a coincidence, and could politicians of all parties think twice before they start talking about reducing the power of regulators and regulation?
Baroness Garden of Frognal
The noble Lord makes a very powerful point. What he said about Ofcom was of course proven to be absolutely valid in the light of the events that unfolded. The sequence of events unfolded fairly rapidly, and the power of the regulator and the respect in which regulators are held have been enhanced by what has happened. We certainly see that Ofcom still has a role to play in matters such as this.
On the matters concerning my honourable friend the Prime Minister, I cannot comment directly.
Lord Smith of Finsbury
My Lords, as a former Secretary of State I re-emphasise the point made by the noble Lord, Lord Fowler. Matters relating to media ownership, public interest and plurality are surely matters to be determined by Ofcom or by the Competition Commission, not by any Secretary of State, however honourable.
Baroness Garden of Frognal
My Lords, we are hearing consensus from all sides of the Chamber on that, and I entirely agree with the noble Lord.
Lord Cormack
My Lords, is there not another issue we should be considering: the exact role of special advisers? I cast absolutely no aspersions on Mr Jeremy Hunt, for whom I have a very high regard, but it seems to me that while special advisers have an understandable role in liaising with party politicians and so on, they should not usurp the role of the career civil servant. I believe—I raised this as long ago as the early 1970s in another place—that Governments of all parties have tended to be careless in the way in which they have used special advisers. This is not the first example we have had in the past 12 months. Could we have a review of the exact role, position and duties of special advisers within government departments?
Baroness Garden of Frognal
My understanding is that in this case the special adviser was one of a number of people, including officials, who had particular roles in respect to the BSkyB bid—but I hear what my noble friend says and if there are matters I can write to him on, I will do so.
Lord Myners
My Lords, while the House has very many concerns about plurality and media ownership, the issue here is a very narrow and precise one. It is about ministerial accountability and compliance with ministerial regulations and the code. This is not to be left to Leveson, who will take a long time and no doubt do a very good job. This is a Secretary of State whom I hold in high regard—I have been very impressed by the way in which Mr Hunt has conducted his affairs, particularly in support of arts institutions—but the simple fact is that there was a complete breakdown of control within DCMS and for that the Secretary of State, who appointed the special adviser, must take entire responsibility. I cannot believe that there was not daily contact between Mr Adam Smith and the Secretary of State and, as we have seen from the e-mails, decisions to be announced by the Minister were disclosed to News Corporation in advance—textually precisely accurately. This is also a breach of Financial Services Authority regulations, which the Permanent Secretary of DCMS should immediately investigate and report to the FSA. Will the noble Baroness confirm that that will be done, and explain why the Secretary of State is not taking responsibility for the people he appointed and who reported to him?
Baroness Garden of Frognal
My right honourable friend in the other place this morning pointed out that he had a number of people in the department working for him to whom he gave responsibility for particular tasks, and he did not then monitor them in precise detail—but I hear what the noble Lord says.
Lord Martin of Springburn
I put it to the noble Lady that the impression I got when I listened to the Secretary of State and the Prime Minister was that they were far keener to allow this matter to go to Leveson than to speak to the House. Perhaps she could convey to the Prime Minister that in my experience, if a Prime Minister or a Minister of the Crown in some way feels that they can hedge the situation over to Leveson, it is highly likely that my successor, the Speaker, will allow an Urgent Question and even, in a very serious case, put aside the business of the House. Only two or three years ago, when Mr David Cameron and the Cabinet were in opposition, they put the case that Ministers must come to the House and be accountable. They cannot have it both ways.
I will ask another question on the point that has already been raised about special advisers. I am deeply concerned at their behaviour. Is it the case that special advisers have a code of conduct? If they do, then the young man, Mr Smith, would have known that he was in breach of that code by breaking a confidence and giving information before it was conveyed to the House. Today the name of Damian McBride was shouted out. It is alleged that Mr McBride, as a special adviser, was keen to blacken the name of the Prime Minister and the Chancellor when they were in opposition, and of the honourable Nadine Dorries. It is sad situation when the taxpayer has to pay for people who are not only incompetent but prepared to blacken the name of decent men and women.
Baroness Garden of Frognal
The noble Lord asked a number of questions. I was in the Chamber during Prime Minister’s Questions and while the Secretary of State was making his Statement. On his point about the Secretary of State being accountable to the House, I say that my right honourable friend was doing just that in coming to the House to take questions in great detail for well over an hour from Members of the House. I hope that he proved himself accountable to the House on that front.
The noble Lord asked about the role of spads and whether they have a code of conduct. My understanding is that they do. They perform an incredibly useful function, as successive Governments have discovered—but obviously, if something has gone wrong, that needs to be looked into on an individual basis. He also mentioned some of the evidence that we saw in the media today. We need to be somewhat cautious about taking at face value all the reports that appear in the media. This is the very aspect that we are discussing today, and it might be wiser in some respects to wait until the evidence has been fully investigated so that we know which parts of the reports of the media are true and which are somewhat creative.
Lord Davies of Stamford
For the avoidance of doubt, will the noble Baroness confirm to the House that what the Government are asking us and the country to believe is that a special adviser, whose office was no doubt next door to that of the Secretary of State, who saw him several times a day, who worked in close collaboration with him and had been appointed by him as a person of trust, without any instruction from the Secretary of State, without any encouragement, without any connivance, took it upon himself to become deeply complicit with one particular party to a highly controversial decision that the Secretary of State was going to have to make, got into the business of leaking documents, talking about tactics and substance, exchanging views, and never thought to tell his Secretary of State what was going on, to check with him that he was happy with that or to report to him on any of the content of those exchanges? Is that actually the story that the Government is inviting the House and the country to believe?
Baroness Garden of Frognal
Once again, the noble Lord is fielding reports from the media that have not necessarily been substantiated, and it would be wise to wait to see which of them are true. All I can say on the question of Adam Smith’s role is to refer to his letter of resignation in which he states that,
“the content and extent of my contact was done without authorisation from the Secretary of State”.
Lord Inglewood
Does my noble friend agree, first of all, that the allegations made about the Secretary of State are extremely serious; and, secondly, that the Secretary of State’s Statement in the House of Commons was an explanation of what occurred but what we need to see is the evidence on which the explanation was based so that Parliament and the public can make up their mind about the events that have occurred?
Baroness Garden of Frognal
Yes, my Lords, what my noble friend says is probably right.
Lord Bates
Are we not missing something of the big picture here? The questions over News International have not appeared only in the past 18 months. They have run beneath the surface, at the core of public life in this country, for some 15 years. Now what we have is an inquiry that is tasked to look at this. I, too, looked at the terms set out for the Leveson inquiry. The case has been made that they are not relevant, but they are exactly relevant. What is being considered now is the relationship between press and politicians and, specifically, the extent of unlawful or improper conduct within News International and other media organisations. That is highly relevant. We now have an inquiry that is two-thirds of the way through its consideration, which should be allowed to consider this important issue in the round—and which this Government actually set up.
Baroness Garden of Frognal
I agree with my noble friend that that is the position, and that a lot of lessons will come out of the Leveson inquiry that could range very much wider than the remit that was set for it. We certainly hope that the end of the inquiry will not be the end of the matter and that these various disturbing cases will be taken forward and we will reach a resolution.
Lord Storey
Where are we up to on the Government’s commitment to a statutory register on the lobbyists of public affairs committees, and when are we likely to see legislation enacted?
Baroness Garden of Frognal
My noble friend is quite correct that in January the Cabinet Office announced that it was looking actively at a statutory register of lobbyists. It was interesting that we saw in the debate just before this one support for the positive power of lobbyists to make valuable changes to things going forward. On the actual dates, I am afraid that I do not have the answer, but I will write to him.
Lord Beecham
Will the Minister say whether the Government think it right that they should seek from the most interested party in an application of the kind that has precipitated this affair a comment on the submission of another interested party opposing that application?
Baroness Garden of Frognal
My Lords, there were many aspects of the matter that need more inquiry and further looking into. On the issue that the noble Lord raised, we need to look at exactly what happened and who was told what, and why. There may well come out of that lessons about what we could learn to do better in future. But he is right that that is certainly an area of concern.
Lord Stoneham of Droxford
I congratulate the Minister for handing these questions in difficult circumstances on behalf of the coalition Government. Would she like to join in congratulations to the Department for Business for the way in which it conducted itself during these troubles? Also, while we have had a number of attacks on the role of special advisers, we should also congratulate the behaviour of the special adviser in that particular department during this time.
Baroness Garden of Frognal
I thank my noble friend. We can see that there was much that went correctly in the Department for Business—but as we all know, the matter was transferred to the DCMS. On all these things we need to look and see what went right and what went wrong and try to do it better next time. This is definitely not the end of this particular matter.
European Communities (Amendment) Act 1993
Lord De Mauley
That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the United Kingdom’s Convergence Programme.
Lord De Mauley
My Lords, I welcome this opportunity to debate the information that will be provided to the Commission this year under Section 5 of the European Communities (Amendment) Act 1993. As in previous years, the Government report to the Commission on the UK’s economic and budgetary position in line with our commitments under the EU’s stability and growth pact. The Government are to submit their convergence programme by 30 April. It explains our medium-term fiscal policies as set out in the Autumn Statement, Budget and OBR forecasts, and is drawn entirely from previously published documents that have been presented to Parliament. It makes clear that this year’s Budget reinforces the Government’s determination to return the UK to prosperity, and it reiterates our number one priority—tackling the deficit and restoring economic stability.
Last month’s Budget builds on the foundations laid in the 2010 Budget to safeguard our economic stability; to create a fairer, more efficient and simpler tax system; and to drive through reforms to unleash the private sector enterprise and ambition that are critical to our recovery. As my right honourable friend the Chancellor of the Exchequer said in his Budget speech, Britain will earn its way in the world.
Today’s news that UK GDP fell 0.2 per cent in the first quarter is, of course, disappointing. We face a very tough economic situation. It is taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime, even taking account, for example, of the recent fall in unemployment. But over many years this country has built up massive debts, which we are having to pay off, and it is made much harder when so much of the rest of Europe is in recession, or heading into it. The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt. You cannot borrow your way out of a debt crisis.
We can succeed only if we continue to safeguard our economic stability. But because of actions we had already taken, we were able to put forward a Budget this year that has a neutral impact on the public finances, implementing fiscal consolidation as planned, and keeping us on course to achieve a balanced structural current budget by 2016-17, with debt falling as a percentage of national income in 2015-16. Fiscal sustainability is the vital precondition for economic success, but there is much more that we are doing to catalyse growth. First and foremost, we are undertaking far-reaching reform to ensure that our tax system is simple, predictable, fair and supports work. We are committed to creating the most competitive tax system in the G20, cutting, for example, the rate of corporation tax to 22 per cent by 2014, the lowest rate in the G7, fourth lowest in the G20. But as well as creating the right and competitive conditions for business to flourish, we will continue to invest in our future.
We have announced that we will take forward many of Alan Cook’s recommendations for roads and developing national road strategy. We have confirmed investment to provide ultrafast broadband to 10 cities across the UK, with a second wave of cities to follow, and we will continue to support the establishment of a new pension infrastructure platform to unlock an initial £2 billion of investment by as early as 2013.
Of course, a return to prosperity depends not only on what we do here in the United Kingdom, but on events beyond our shores. As the Office for Budget Responsibility said in its March report,
“the situation in the Euro area remains a major risk”,
to the UK’s economic forecast. More than 40 per cent of our exports are to the euro area. In that regard, it is encouraging that progress has been made over the last year. The European Central Bank’s monetary loosening has helped stabilise the banking system. There has been progress in stabilising Greece, and a number of countries have announced economic reforms.
Lord Eatwell
My Lords, on the day that the British economy has fallen back into recession, it might have been expected that the Treasury spokesman would take the advantage of this economics debate to explain himself to the House. Apparently, he prefers to stay away and avoid the embarrassment. I am sure we are all grateful to the noble Lord, Lord De Mauley, for valiantly throwing his body into the breach.
We have learnt over the past couple of years that quarterly GDP figures should be taken with several grains of salt, but the figures released this morning are consistent with all the revised numbers over the two years that the coalition Government have been in office. Basically, the economy has ground to a halt and growth is negligible, and because of this the rate at which government borrowing is being reduced has also slowed down. Indeed, the deficit in March this year was higher than in March a year ago. No one can doubt that these dismal results are the consequence of the coalition policy of austerity. As the Financial Times has pointed out:
“Official figures on Tuesday showed five more years of grinding austerity were in prospect”.
Tightening your belt to pay back a debt is becoming painfully familiar to many households in this country, so simple arguments about austerity being the price of excess borrowing resonate with daily experience. Yet the analogy is false; coalition austerity is impoverishing not only the borrower but the lender too, for from whom have the UK Government borrowed this money? None other than our pension funds, our insurance companies and our investment trusts, all of which are suffering from the recession created by coalition austerity policies.
The Budget documents before us reveal the true dimension of the failure of the coalition policy of general impoverishment. It is that general failure that I wish to concentrate on today, rather than pick over the decaying bones of the Budget itself. I remind the House of the state of the economy that the coalition inherited; it was growing at 2 per cent per year, an almost inconceivable figure today. The coalition’s actions on taking office reduced that to zero in just a few months, primarily, as has been so effectively argued time and time again by the noble Lord, Lord Skidelsky, by destroying business confidence. They followed this by imposing the coalition one-club policy: austerity as the cure for all economic ills. Also, as is made clear in the Budget report, 90 per cent of planned government cuts are still to come—squeezing the life out of the British economy.
The Government also inherited an economy in which the public sector was running a fiscal deficit unprecedented in peacetime. That deficit inheritance is well illustrated in Chart 2.5 of the convergence programme report. Noble Lords will note that at the beginning of 2008 the deficit was about 2.5 per cent of GDP and was falling, as it had been doing for the previous two years. Then, in mid-2008, the Government’s finances were engulfed by a veritable tsunami as the financial crisis resulted in rapidly falling tax revenues and rapidly rising expenditure, such that the deficit rose to over 11 per cent of GDP by 2010. The question before us today is simple: is austerity securing recovery? Is it securing an effective elimination of that deficit and building strong foundations for future growth?
The answer to these vital questions can be found in the OBR report that accompanied the Budget, and indeed is embodied in the convergence report. The OBR points out that the austerity programme does not simply result in loss of output over the next five years or so, but results in a permanent loss of output as the productive potential of the economy is reduced, undermined by the lack of investment in productive capacity and the erosion of skills among a lost generation of the unemployed. The OBR could not be clearer in stating that,
“our estimates of potential growth do imply a significant and persistent loss of potential output relative to the pre-crisis trend … Our … estimates for 2011 imply a potential output loss of around 8 per cent … This shortfall widens to around 11 per cent by 2016”.
The permanent loss of potential output also results in a permanent loss of potential revenue for the Government and hence worsens the deficit, prolonging the age of coalition austerity. As the OBR argues,
“the output gap determines the ‘structural’ or cyclically adjusted component of the deficit. A more negative output gap”—
that means greater productive potential—
“implies that more of the deficit will disappear automatically as the economy recovers, pushing up revenues and reducing spending”.
As chart 6.7 in the report shows, the output gap is being narrowed, productive potential is being reduced by the recession itself. So according to the OBR, the policy of austerity is itself reducing the beneficial impact that growth can later have on the elimination of the deficit. Put another way, if the growth rate of the economy were to be stimulated now, if the policy of austerity were to be abandoned, not only would growth be higher now, but the long-term output of the economy would be permanently higher, and the potential for cutting the deficit would be strengthened.
The essence of the OBR’s powerful case against the Government’s austerity policy is the starting point of a case for a policy of fiscal stimulation put forward by Professor Larry Summers of Harvard University, the former US Secretary of the Treasury. In an important paper, co-authored with Professor DeLong of the University of California, Berkeley, delivered at the Brookings Institution on the very day before the Chancellor presented his Budget, Professor Summers provided empirical estimates of the long-term impact of austerity, and of the alternative policy of fiscal stimulation. He demonstrated that under current depressed conditions, a fiscal expansion would pay for itself by enhancing the permanent potential output of the economy—the OBR’s point—and producing higher long-term revenues for the Government. As Summers put it,
“temporary expansionary fiscal policies may well reduce long-run debt-financing burdens”.
What if the Government were to take up the Summers policy, and undertake “temporary expansionary fiscal policies” that are self-financing in the long run? Where would the money come from to pay for such policies today?
Fortunately, the Chancellor himself has provided the answer. If the nation can afford to lend £10 billion to the IMF, then it can afford to lend to £10 billion to a national infrastructure bank directly to attack the decline in productive potential that the austerity policies have produced. Mr Osborne said the IMF loan would come from the UK's reserves, was not money that would otherwise have been available for public spending, and would not add to the national debt. Okay, let us perform the trick again, but this time at home.
However, it might then be argued that the rating agencies—to which the Chancellor regularly pledges allegiance—and the bond markets may not be convinced by the Summers argument, resulting in a loss of confidence in Britain with knock-on effects on interest rates. Summers presumes no increase in risk premia, resulting in no increase in interest rates. His point is that the expansion would be self-financing and therefore an increase in risk premium would be irrational. However, perhaps it is too much to expect rational behaviour from Mr Osborne's friends in the ratings agencies. After all these are the clowns who told us that securitised sub-prime mortgages were as safe as Uncle Sam. How might we protect Britain from their irrationality? May I offer two proposals that have been floated elsewhere?
First, it has been suggested in the United States that austerity policies—cuts in spending or increases in taxes—should be contingent on the economy reaching predefined goals in terms of growth and/or employment. Legislation would commit the Government to cutting the deficit when the growth target had been hit. The potential flaw in this proposal is obvious. Cuts in demand might stifle a recovery before it had properly begun. But at least this idea of contingent deficit reduction provides some escape from coalition austerity.
Secondly, the fact that the 2010 deficit was unprecedented should have prompted some thought. Coalition austerity might have been appropriate if we were facing normal cyclical swings in the economy, rather than the most severe economic shock since the Second World War. And it is the funding of World War II that is instructive. The war was a severe economic shock, and Britain borrowed heavily to pay for it. We finally paid off our borrowing to pay for the war in 2006, 61 years after the war ended. That is a sensible way of dealing with unique financial shocks, with important lessons for economic management. Even though the debt to GDP ratio in 1945 exceed 250 per cent, rather than the 70 per cent of today, this did not stop the Government creating the NHS, introducing major educational reform, expanding the welfare state and starting the difficult process of rebuilding the postwar economy.
Given that we are facing an extraordinary event, why not place the excess debt created by the circumstances of the global crisis into a sinking fund? The fund could be financed by selling the long-term bonds that the Chancellor has suggested be issued, and bond redemption could be tied to a dedicated revenue stream. The repayment of the debt could then be extended over, say, 20 years—it need not be 61—and the Government could pursue a sensible growth strategy managing the normal residual debt on an annual basis. Neither of those proposals is a perfect solution. There is no perfect solution. But at least they are alternatives to blindly following coalition austerity. Of course, these rational responses to a unique event may not convince the irrational ratings agencies, but we cannot allow Britain's future to be dominated by their irrationality.
The failure of the policy of austerity is becoming more evident day by day, not only here in Britain, but in Europe, too. Even Germany is coming to realise that impoverishing your own customers may not be a wise policy. Only the coalition fails to recognise reality. A source close to Mr Osborne is quoted by the Financial Times as arguing that, with respect to low growth in the eurozone:
“It’s not too much austerity: it’s too much debt and not enough competitiveness”.
That is how out of touch they are. They have not understood the OBR's case that austerity is weakening competitiveness and making debt reduction more difficult. However, abandoning the austerity policy will require a new framework, within which to construct a sensible fiscal and monetary platform. The OBR and Professor Summers have provided the necessary framework. Their demonstration that austerity is permanently destroying future production, and hence future government revenue, is the starting point for a sensible new policy debate both in Britain and in the eurozone. Policy must be changed now, before coalition austerity does yet more permanent damage to the UK economy.
Lord Skidelsky
I take it that the question for debate this evening is not whether Britain is on track to meet the Maastricht budget criteria, but why, nearly four years after the economic collapse of 2008, our country finds itself officially back in recession.
Since July 2010, the policy for recovery has been set by the coalition Government. The main plank of that policy has been an accelerated programme of deficit reduction. Since the coalition came to office, recovery has gone into reverse. In 2010, Britain’s economy grew by 2.1 per cent. In 2011 it grew by 0.8 per cent. With today’s figure showing a fall of 0.2 per cent in the last quarter, the OBR forecast of 0.8 per cent growth this year has been exposed as a fantasy. I feel sorry for the Treasury official who wrote in paragraph 6.1 of the convergence report, just published:
“We still expect the economy to avoid a technical recession with positive growth in the first quarter of 2012”.
The truth is that the economy is smaller now than it was in September 2010. According to the latest NIESR report, the present slump is the longest in British history. Naturally, the Osborne Treasury denies that its recovery policy was in any way responsible for the non-recovery. A correct policy, it claims, was derailed by external shocks such as the rise in import prices, the euro crisis, the structural impact of the financial crisis, and so on. Now the extra bank holiday for the Diamond Jubilee will apparently be a further impediment to growth this year, so the Queen joins the list of shocks. No, these are excuses, not explanations. The policy was wrong from the start and would therefore never have got us out of the hole into which we had fallen.
The eurozone crisis, for example, which has now spread from the Mediterranean to Holland and France, results from exactly the same austerity policy that is being implemented in this country. I never believed that the policy would work, either to promote recovery or to meet the Government’s own deficit targets. Speaking in this House on 1 November 2010, I said:
“I have never been able to understand how cutting the budget deficit in present circumstances is supposed to help employment and growth”.—[Official Report, 1/11/10; col. 1501.]
I still await enlightenment.
Chart 2.4 of the convergence report shows that the ballooning of the Budget deficit in 2009-10 was almost entirely caused, as the noble Lord, Lord Eatwell, has pointed out, by the collapse of national output. This ballooning was quite common, and there is a good comment on it dating from 1931, penned by none other than Keynes, who remarked that the rise in the deficit was,
“nature’s remedy for preventing business losses from being ... so great as to bring production altogether to a standstill”.
It has always seemed bizarre to me to believe that the best way to eliminate a deficit caused by the collapse of output is to pursue a policy that retards the recovery of output. The OBR itself estimated in 2010 that every 1 per cent of GDP decline in current government spending knocks 0.6 per cent off economic growth. It believes that without the Osborne cuts in government spending, GDP in 2016 would be 2 per cent higher than forecast—that is, nearly £50 billion higher. Translate that into extra jobs and houses, schools and hospitals that will not be built as a result of current policy.
That brings me to a second bizarre feature of the Treasury document, which is almost too arcane to discuss in polite society. Most people understand the notion of the deficit; it is the gap between what Governments spend and the revenues that they raise in taxes. The task that the Chancellor set himself in his first Budget was to liquidate not the deficit but the “structural” deficit—the deficit that would remain after the economy had recovered and actual output was again equal to potential output. Unlike the actual deficit, the structural deficit depends on estimates of such things as potential output, the output gap and the trend rate of growth—all intellectual constructs to which a high degree of uncertainty attaches, yet the Government have tied their programme to this particular shaky mast.
One might suppose that the actual deficit would shrink as the economy recovered. The structural deficit, though, has to be eliminated by policy; that is the argument. The latest OBR forecast shows it on track to fall from 7 per cent of GDP in 2010-11 to 0.7 per cent in 2016-17. En route to this mandate that the Government set themselves, something very mysterious happened. The structural deficit, which had been chugging along at about 2.5 per cent in the Brown years without causing any alarm or increasing the national debt, suddenly turned into a structural deficit of 8.9 per cent in 2009-10, with the threat of large permanent additions to the national debt. How did a deficit mainly caused by the cyclical downturn mutate into a structural deficit that threatened the Government’s long-term solvency? That was the mutation that caused alarm bells to ring and anathemas to be rained down on the Brown chancellorship for having left his successors such a horrendous mess to clean up.
The Treasury report suggests two interesting reasons for the mushrooming of the structural deficit. The first, in chart 6.2, is that the pre-recession economy had been growing above trend. The actual level of output, it claims, was 2 per cent above the potential level consistent with inflation in the long term. Since the inflation rate was almost always below the target of 2 per cent between 2000 and 2007 and the Treasury’s current assumption of the sustainable level of unemployment, at 5.25 per cent is exactly the same as the rate that prevailed in the Gordon Brown years, it is difficult for me to understand why the Treasury thinks that the pre-recession level of output was too high.
The second explanation, in paragraph 2.8 of the report, is something that the noble Lord, Lord Eatwell, referred to: that the crisis itself has left potential output 11 per cent below its pre-crisis trend. In other words, the economy will emerge from the slump permanently smaller than it was before the recession. Again, no explanation is given for this assertion. Of course, if your policy closes down capacity, it is quite likely that you will get that result. It is on this mixture of assertion, slippery definitions, and dodgy calculations that the logical foundation of the present policy is built. The Government and Treasury clearly believe in the power of incantation—if they say often enough that their policy is restoring confidence and credibility, that will make it true.
Some time last year the penny started to drop and the Chancellor produced his Plan for Growth, a belated admission that deficit reduction is not itself a growth policy and that the Government cannot just stand back and wait for the private sector to spontaneously ignite. There were a lot of measures designed to stimulate growth: lower corporation tax, bigger capital allowances, enterprise zones, green investment and so on, and now a £20 billion credit guarantee for bank loans. The measures are useful but too small, and will hardly offset the 25 per cent reduction of public capital spending this year alone. So much for the Treasury’s claim that the Government have been,
“using the savings over the Spending Review period to fund infrastructure investment critical”.
That claim is simply wrong.
It is clear that the main plank in the Government’s growth strategy is what the report calls “monetary activism”, defined as,
“additional monetary stimulus through quantitative easing”.
There was £200 billion of it in 2009-10, and the Chancellor has recently authorised another £125 billion. Studies have shown that this is useful; it has raised GDP growth by between 1.5 per cent and 2 per cent more than it would have been in its absence. And yet the effectiveness of additional quantitative easing is far more limited—there are fewer bonds left to buy and less scope to move bond yields—so this source of growth is, at best, highly uncertain.
We are sure to get out of this recession; we always do. If, however, we are to escape from semi-slump in a reasonable period of time, we have to break free from Angela Merkel’s strategy of bringing Europe to a standstill and take some initiatives of our own. The noble Lord, Lord Eatwell, has made some suggestions, and I add three of my own. First, in its April world economic outlook, the IMF advocated “balanced budget fiscal expansion”—that is, tax increases matched by increases in government spending, a fragment of forgotten wisdom from the Keynesian era. Secondly, we could follow the example of Ireland and set up a bad bank to buy illiquid assets from the banks at fair present value, aiming to minimise losses to the taxpayer from their later realisation. That would address one cause for the much noted breakdown in bank lending. At least Ireland is growing, which is more than we are. Thirdly, I have long been an advocate of setting up a national investment or infrastructure bank to afford institutional investors such as pension funds a higher yield than they can earn on gilts. I believe that we will be driven to one or other of these unorthodox measures in the end—so why not act now, without wasting more time on excuses?
Baroness Bakewell
My Lords, I wish to address a small example of what has so far been elucidated in highly theoretical and impressive terms. In the course of this austerity Budget, the Government imposed what they hoped was an unnoticed small adjustment to taxation, but it was not unnoticed. It made the headlines and became known as the granny tax—a misnomer that was joked about on several television programmes in which I took part to discuss this move.
What was interesting about the days subsequent to the Budget and the discussion of the granny tax was the implication that pensioners had done well by the Budget. One segment of the population had been treated better than the rest. I wish to challenge that; I have on record that this is by no means the situation and that the Budget missed an opportunity to improve the economy among consumers. Some 50 per cent of pensioners pay no tax because they earn so little. The increase in the pension, which the Chancellor boasted about, was £5 for each pensioner and was merely a catch-up with inflation that had gone before; 4.5 million pensioners lost out, but not by very much. It allowed Age UK to refer to the Budget change as “small beer”, by which I think it meant small sums of money. Small sums of money for people who do not have very much are far more significant than large sums of money for people who have plenty. Those turning 75 were hit more by this Budget change than the 4.5 million who had the small loss.
Pensioners are suffering and they suffered from the Budget. They suffer because VAT affects all they consume; they suffer from the inflation in food, fuel and heating prices. I simply want to make the point that 10 million people over 65 are spending all they earn and all they get from their pension because they need to. Small adjustments in their favour would have increased spending across a large segment of the population and helped to boost the economy. This was a missed opportunity and the pensioners noticed.
Lord Pearson of Rannoch
My Lords, I trust that the noble Lord, Lord De Mauley, knows that he has my sympathy in his very difficult, some might say impossible, task. I trust he will forgive me if I start by asking whether it is not surreal, even grotesque, that we have to submit anything, let alone our Budget, to the corrupt, expensive and now pointless outfit in Brussels, which has not been able to have its own accounts signed off for the last 17 years in a row. In the background, and as a related matter, is it not even more absurd that this outfit in Brussels now presumes to tell us how to reorganise our own accounting standards, how much our banks and insurance companies should reserve and much other mischief that is actively designed to diminish the City of London and our vital financial services generally?
Could the noble Lord tell us what exactly the United Kingdom’s convergence programme is? With what are we converging and to what benefit? We are told that we are doing this in pursuit of the EU’s stability and growth pact. Surely even the Government must now acknowledge that this is a dead duck: that the whole EU adventure has not brought any stability or growth but merely civil unrest, unpayable debt and slump. The countries of the future sail on, including the Commonwealth, while we stay on the “Titanic”, with the iceberg obvious in front of us.
The European Communities (Amendment) Act 1993 was the Act that put the destructive Maastricht treaty into our national law. Perhaps the worst aspect of that treaty, at least for our friends in Europe, was that it paved the way for European economic and monetary union, or the EMU, the bird that cannot fly. It came complete with its attendant single currency, the euro, which is now causing so much havoc among its members and elsewhere. The United Kingdom was of course right to avoid that part of the treaty, and credit for this is often given to the then Prime Minister, Mr John Major, and later to Mr Gordon Brown when he was Chancellor of the Exchequer. However, I understand from friends in the Civil Service that neither of these gentlemen deserves much credit for this fortunate deliverance. The credit should instead go to the bureaucrats in the Treasury and the Bank of England, who disliked the EMU because it would have passed much of their power to the European Central Bank in Frankfurt. The Treasury would no longer have been top dog in the British pecking order. That position would have passed to the Foreign Office—perish the thought.
Be that as it may, it seems that our proceedings today have their justification in the failed process of European economic and monetary integration. I cannot see, therefore, why we should have anything to do with it. Why should we submit anything at all to Brussels, let alone our Budget? It is true that the Government have rightly refused the insolent demand by Brussels that they should submit our Budget to Brussels before the House of Commons sees it. They are to be congratulated on that small show of defiance. However, I come back to the question: why are we doing this at all? I fear the noble Lord’s answer will be that it is a treaty commitment, that we take our treaty commitments seriously and that we will be fined by Brussels in the Luxembourg Court if we do not do it.
I conclude with some advice for the Government, which I have attempted to give before but which I do not think has quite sunk in yet: that there is no way in which the EU can enforce a fine against a donor member state such as the United Kingdom. EU fines can be enforced against individuals and companies in the national courts where they reside. Recipient nations can have their fines deducted from the money Brussels sends to them. This, however, does not work for donor nations such as us or Germany or, dare I mention it, Holland.
Perhaps the Minister could pass this advice on to his right honourable friend, Mr David Lidington, the Europe Minister, who I learned from today’s Daily Telegraph does not want us to pay the extra £890 million now being demanded by the Commission into the bottomless pit of Brussels. A senior EU official has apparently told the Daily Telegraph that we could be sent to the Court and fined if we did not pay up. So what? Just knock the fine off the £10.2 billion in net cash we sent Brussels last year—and it is more this year. Just knock it off and see whether they dare to do it again. If Mr Cameron and his Conservative colleagues started to behave like this, they might even win the next election. So it should be with this insulting Motion before us, which I oppose.
Lord Davies of Stamford
My Lords, I will come back to the Budget, if I may, and not take up the very challenging, provocative and frankly misconceived points that the noble Lord has been talking about in the European Union context. I do not want to come back to the macroeconomic stance represented by the Budget for more than two very brief remarks, because that matter has been thoroughly dealt with by my noble friend Lord Eatwell and the noble Lord, Lord Skidelsky. I also want to talk about two particular tax proposals in the Budget, the significance of which has unfortunately not been sufficiently understood so far.
Before I do that, I have those two brief comments on the macroeconomic debate. First, it is clear that the Government are committed to the Pigouvian idea, which was discredited in the 1930s and is clearly being discredited now, that if the Government cut borrowing and spending, then the reduction in aggregate demand following from that would be automatically compensated by an equal and opposite increase in borrowing by the private sector to finance consumption or investment spending. That is a very hoary doctrine that, as I said, has been proved to be wrong in the past. The Government seem to continue to be committed to it. It has become a sort of Panglossian piece of self-deception on their part.
The phrase that the noble Lord from the Treasury used this afternoon—I heard the Prime Minister use exactly the same phrase earlier today in another place—that the solution to a borrowing crisis cannot be more borrowing reflects the preference of this Government to fall back into PR slogans rather than to think through matters carefully. It is a completely nonsensical statement. Clearly, if you have a deficit, you cannot get rid of it overnight. If you are going to continue with a deficit, you are going to continue to increase borrowing. We are merely talking about the rate at which you continue to increase borrowing. There is no doubt that the solution, whatever it is—whether it is the one we on this side of the House propose, or the one to which the Government opposite are committed—would involve more borrowing. We want more clarity, a bit more analysis and perhaps a little more straightforwardness with the public, and rather less of the generation of PR slogans to disguise reality from the public.
The two particular points emerging from the tax proposals in the Budget which I want to highlight this evening are not matters which will rouse great passion around the breakfast tables of millions of families in this country. They might even seem, at first glance at least, rather technical and esoteric but they are extremely important in terms of the vibrancy of the supply side of the economy, the ability of the economy to respond to opportunities, and the willingness of people to risk their money—to invest in new or expanding businesses, to generate wealth and employment in the future. I have already raised in the earlier Budget debate the first measure that I am concerned about. I was given a one-sentence response by the noble Lord, Lord Sassoon, which made me feel that the Government either did not want to or could not be bothered to engage seriously with the issue. This concerns the introduction of a general anti-avoidance rule. I am in favour of the introduction of a general anti-avoidance rule, with the important condition—I always make this clear in any debate on the subject—that, to avoid doing considerable damage to the economy, it must be accompanied by a provision under which HMRC would provide pre-transaction rulings to taxpayers.
Briefly, what a general anti-avoidance rule—a GAAR—means is that every taxpayer is exposed to the risk that HMRC will suddenly challenge his or her tax return and say, “We are not accepting this particular structure or bottom line of taxable income because we think that you have engaged in some artificial practice for the purpose of tax avoidance. Therefore we are going to see through this structure and tax you on a completely different basis”. Under a GAAR regime, you never quite know when you may be exposed to such a risk. I suppose that it is true to say that if you always make sure that you adopt structures which cost you the most tax of any structure that you could adopt to solve a particular problem or to arrange for a particular transaction, you would not be exposed to a revenue challenge of this kind. That, of course, would mean that there would be an enormous increase in the tax burden. That would be a very undesirable thing. It is not something that the Government have ever thought of, I am quite certain. If, in fact, you have a reasonably tax-efficient structure which you have adopted for totally respectable operational, strategic or other reasons, you are always exposed to the Revenue saying, “No, no; you only did this in order to avoid tax, so we are going to attack you with the GAAR”. The only way around this is to have a system under which you can ask HMRC in advance whether or not it would accept a particular structure and, if it does, you know that you are safe. The IRS regularly provides pre-transaction rulings, and there is no reason whatever why HMRC should not do so. I will come on to that in one moment.
The first proposition that I put to the Minister is that the effect of introducing a GAAR without a pre-transaction ruling facility is greatly to increase tax uncertainty in this country, or to reduce tax certainty. I do not think that he will argue with that, but he will argue with my second proposition, which is that tax certainty is an important factor in the determination of willingness to exist and the location of investment decisions. That decision process which sometimes may be more intuitive and sometimes may be an explicit equation will always include certain key factors. Of course, these include political stability, the real output cost of labour, access to markets, availability of skills and monetary stability. All these things are important, but tax rates are important and tax certainty is extremely important. Therefore, if you change the variable of tax certainty, or produce a greater degree of tax uncertainty, you will change the outcome of that particular equation. You will have less investment. That is a very undesirable thing to do.
Lord Myners
My Lords, I hesitated for a moment to rise to speak because I was assuming that there would be contributions from the other side of the House. However, not only has the Minister, the noble Lord, Lord Sassoon, decided to desert the House on what is a particularly important day for an economic announcement and debate, but we have not had a single speech from the other side, and, as far as I can see, not a single Member on the other side of the House is even trying to speak in this debate.
Let me suggest that the Government’s proposal to accord with our obligations under Article 121 of the European Union Treaty on Functioning could be achieved in a better way than by submitting 500 pages of documents, as is proposed. I suggest that the Chancellor instead write a shorter letter to Commissioner Barroso, as follows.
“Dear Manuel, here is our annual submission on convergence. The news is good. We are converging with Europe on policies—austerity is the byword for everything we talk about now here at Horseguards—and we are converging on outcomes: we are back into recession, just like most of Europe.
“We are now officially into recession. In fact, output at the moment is 4.5 per cent below the previous high. We are seeing a contraction in output capacity. We are contemplating the inevitability of the longest recession for over 100 years. I have had to reduce my growth forecasts, or those produced by my Office for Budget Responsibility, on five occasions, and increase my debt forecasts each time. Between you and me, Manuel, I am beginning to lose confidence in Mr Chote and his two colleagues. To put it at its mildest, they have made an absolute Horlicks of their economic forecasting. Now I am afraid that they are going to tell me that lower growth and taxes will mean even greater public sector spending cuts in order to meet the fiscal policy constraint that I have imposed on myself.
“I also suspect that they are going to tell me very shortly that the output gap is even smaller than they previously believed it to be and accordingly the cyclically adjusted deficit and the adjustments that I will have to make in public expenditure are going to be even greater. You may remember that I was able to tell Parliament during the last Budget that we were still on course to meet my fiscal objectives. I did rather fudge the issue, as I pushed out the target date, and, importantly, pulled the wool over the eyes of my Liberal Democrat colleagues by pointing out that I was going to make a further £16 billion of unidentified public expenditure cuts in the two years after the general election—cuts which the Liberal Democrats will presumably have to reflect in their own manifesto at the time of the next election.
“I am loath to admit that perhaps Vince Cable and Andrew Tyrie were on to something when they said we needed a credible and coherent strategy for growth. I have promised Parliament on many occasions that I will produce a strategy for growth, but somehow I have not been able to find one. But needs must: I have painted myself into a corner with a policy of expansion through fiscal contraction. By the way, if you can give me any examples of where this has worked elsewhere in the world, or some academic sources, to rebut the evidence that comes at me from the Opposition Benches and Cross Benches in the House of Lords, that would be most welcome.
“I take some comfort from the fact that you in Europe are, on the whole, following the same policy. By the way, how is it going for you fellows—do you see any light at the end of the tunnel? Things have not been helped here in the UK by inflation. The Bank of England appears to have got this completely wrong: in all the time I have been Chancellor it has never hit the inflation target for a single month. Now the inflation figure is rising again. This is really squeezing consumption, particularly for the poorest in society, who, regrettably, have had to bear the largest burden of the fiscal adjustments I have announced to date. I must not, of course, be too critical of the Governor of the Bank of England. The governor keeps reminding me that he is older, wiser and more experienced than me, and writes me regular letters—one every three months—explaining that, when it comes to inflation, everything will be fixed before he leaves next year. By the way, he appears fixated now with his legacy.
“We continue to do this QE thing. I am damned if I can really understand it, but the governor says that it will be easier to reverse than to implement. I cannot see that myself, but I cannot risk asking him about how he has reached this conclusion, in case he does not know the answer, or I will not like it.
“Consumer demand in the UK economy has not been helped by unemployment. The news is not too bright here. We now have the highest level of unemployment since we were last in office. We have 1 million young people out of work, and the figure is increasing. We have the highest level of female unemployment for over 30 years. Business investment is also a bit in the doldrums. They say it is all about confidence. I do not understand that myself. There is some better news on manufacturing and exports, which are up. But this is largely due to trade with Europe, which rather pulls the rug from beneath my feet when I say that our economic problems are caused by the difficulties currently being experienced in Europe.
“Things would obviously be lot easier if the banks lent more. The Bank of England has just produced a credit report showing a further very substantial contraction in lending to SMEs. You may remember we tried that Merlin thing last year. Quite frankly, it did not work at all: the banks lent less in the end than they did before it started. We are now working on something called credit easing, although between you and me, it has all gone rather quiet on that front, and the banks do not seem very keen on it at all. Of course, it does not stop the bankers taking huge bonuses. Mr Diamond at Barclays is about to trouser another £20 million. There is very little prospect of any of that ending up in the accounts of HMRC, as he is a non-dom. In any case, he seems to have negotiated a deal under which his tax is paid for him by the bank.
“However, I must not get too annoyed about the bankers: it is not as if they got us into this problem in the first place. Nor must I get upset with the pension funds, which seem to be remarkably loath to step forward and support any of the infrastructure investment that I so proudly announced in my Autumn Statement last November.
“By the way, I am going to have to adjust the words in my speeches about the fact that the Government are increasing capital expenditure, because I realise that we confused a negative figure with a positive figure and, in fact, we are reducing public expenditure at a time when we have excess capacity.
“Interest rates, of course, are low. I claim this as one of our successes, and I have precious few others to offer in competition. But I recognise that this is largely because of QE, where we are buying back our own debt, and the generally recessionary tone of our economy. The consequence of low interest rates is hugely damaging to savers and pensioners. Please don’t mention to me the Japanese experience, where low interest rates had no positive impact on economic growth.
“I mentioned the poor earlier in my letter. I have just given 10,000 or so bankers, and others who are earning over £1 million a year, an extra £50,000 in tax benefit. Fat chance that they will give me any thanks for that. In fact, I am finding it increasingly difficult to get business people to speak up in favour of the Government’s economic policy now. All those people who signed letters just before the last general election seem reluctant to come to our kitchen suppers.
“House prices continue to fall—although fortunately not here in Notting Hill. We have introduced a new scheme, regarding which some people tell me I will be legged over by house builders, but at least we are seen to be doing something positive in encouraging new house building.
“You probably know that my opposite number, Ed Balls, is having a rather good run at the moment. Quite frankly, I find him very frustrating. But that hand gesticulation he makes about flat-lining is beginning to look as though it is right. Mr Balls has come up with a five-point plan for growth. Some of the ideas are quite good. In fact, one for abolishing or reducing VAT on housing improvements and repairs is rather a good one to me, although the house builders tell me that it isn’t. But I can’t really reduce VAT on repairs to domestic houses when I have just put VAT on repairs to cathedrals.
“Well, there we are. We are converging. We are tightening our buckles. We are tightening our belts. I even had to tell my father, after that rather injudicious interview he gave to the Financial Times’ How to Spend It magazine, that it really wasn’t sensible to say that my next ambition is to spend £19,000 on buying a desk. Yours ever, George.
“PS—it is going to be like a hole in the head if that Frenchman Hollande gets elected. How are we going to cope with that? By the way, can you please make sure that the IMF and the OECD don’t go through a further change of mind and begin to say that perhaps my fiscal policy is wrong and I should be doing something to encourage growth because that is the best way of reducing the deficit and the debt.
“As you know, Manuel, I have got to keep my distance from you because that is our policy as far as Europe is concerned. However, my colleague Jeremy Hunt says that you can always call me on the mobile”.
Lord Stoddart of Swindon
My Lords, I should like to join the noble Lord, Lord Myners, in pointing out that the Benches opposite are virtually, but not quite, empty. The one occupant is from the junior partner of the coalition. I have to sympathise with the Minister who is to reply, the noble Lord, Lord De Mauley, because his party has completely deserted him. It is a very serious matter for a Government when a Minister is confronted by so many erudite speeches from the Labour Benches and, indeed, the Cross Benches. The last speech that we heard was very amusing indeed. This has enabled the Opposition to make a concerted attack on the Government’s Budget, and their economic policy, without one criticism or speech of reply from the Benches behind the Minister. That is quite shocking and I hope that in future the Whips, or whoever else is in charge, will ensure that the Minister is far better supported than he has been this evening.
This debate is,
“to move that this House approves, for the purposes of section 5 of the European Communities (Amendment) Act”.
As I have already said, what we have had, except for the excellent speech of the noble Lord, Lord Pearson of Rannoch, is a debate on the Budget and economic policy. I have to say that I congratulate all those who have spoken, because the speeches have in some ways been superior to those made in the House of Commons. That is something that noble Lords and people who read Hansard might care to consider when we debate, perhaps in the next Session, the future of this House.
First of all, I support what my noble friend, if I can call him that, Lord Pearson raised—the matter of Europe and whether we should be having this debate at all tonight. When I saw the item on the agenda, my mind went back to 1992 when the Maastricht treaty was before Parliament, having been signed by the then Foreign Secretary, who then said, “Perhaps I had better now read what it says”. We had a long debate about what was going to happen with regard to the Maastricht treaty. At that time, people such as me and the noble Lord, Lord Pearson, warned that what was contained in that treaty would eventually lead to many powers reverting from this House and the Government to the institutions of the European Union. So it has happened. As the noble Lord, Lord Pearson, rightly said, it is absurd and outrageous that we, the Government and Parliament, should have to send our economic policy and our Budget over to Brussels to be supervised by the Commission and 26 other countries. That is not self-government, if I can put it that way; it represents being governed from abroad by bureaucrats who are completely unaccountable and insensitive to what our own nation state requires, or what is required by the other nation states in the European Union.
The document I am holding here is the Convergence Programme for the United Kingdom, but convergence with whom and for what purpose other than to create a single European state? Why would we wish to be concerned with the basket-case countries on the brink of default and collapse? The Conservatives say that they want to be in Europe but not governed by Europe, but convergence is about government, and about European governance. As I have already said, it is outrageous that this country should be obliged to submit its plans to Brussels bureaucrats for oversight by 26 other countries, many of which are very much smaller and less important than us.
What if Parliament refuses to agree? We could have a vote tonight. Probably everyone has gone home, so we might even win it. What if Parliament refuses to agree to submit the convergence criteria? What then? The noble Lord, Lord Pearson, raised this matter. He told the House that it was impossible for the Commission—or the Community or the Union, as it is now called—to fine, but we have been amazed at the sort of things that the European Union and its institutions can do, so I am not at all certain that he is right that no attempt would be made to fine this country if we refuse to submit our economic policy under Section 5.
Lord Pearson of Rannoch
My Lords, I did not say that no attempt would be made to fine us. It is certain that an attempt would be made to fine us. A fine would indeed be issued by the Luxembourg so-called court of so-called justice. All I said was that there is no way that Brussels and Luxembourg can force a donor nation to pay a fine.
Lord Stoddart of Swindon
I hope the noble Lord will be able to answer that question. They could not send troops over here to enforce their will. I do not want to keep the House for much longer, although there have been some long speeches tonight, but people in this country are getting quite disillusioned with politics. The Hansard Society published its latest figures today, which show that only 42 per cent of the electorate are interested in politics—a 16 per cent drop since the 2011 figures. Their disillusionment is understandable because they have realised that the United Kingdom is increasingly governed not by its own elected Parliament but by the EU and other international institutions. No wonder percentage turnouts at elections are now so low because people see no point in voting for a Parliament in which EU treaties hand decisions and governance to the EU and its institutions.
Lord Layard
My Lords, I agree with every criticism that has been made, and I note that this is not wisdom in hindsight, because all these criticisms were made before the policy was embarked on after the election.
The basic problem, which is making the policy not work, is that it is based on a misdiagnosis of the underlying issue. This is exactly the same situation as we have in Europe. The policies which are not working there are based on the same misdiagnosis. That misdiagnosis is that Governments have been behaving irresponsibly and that is why we have a problem. That is not why we have a problem. One or two Governments have—Greece, certainly—but most countries have not had irresponsible behaviour by their Governments. The irresponsible behaviour was by the private banks. That produced the economic collapse, and the economic collapse is what produced the government deficits. The government deficits were not produced by the Governments; they were produced by the misbehaviour of the private sector.
These deficits sprung up because tax receipts had collapsed. Corresponding to that there was the increase in the surpluses of the private sector as private households and companies were trying to retrench. As for how the public deficits could be financed, they would be financed by private savings. That is how it works, and it could work perfectly well provided that private savers had some assurance that they were putting their money in a safe place. What did that require? It required only two things. First, it required some guarantee by the Governments of our own country and other European countries that there would be no increase in government expenditure until tax receipts had come back up as a result of the return of growth. That was a perfectly reasonable requirement from investors. The other thing which was required was some underwriting of the public debt by the central banks.
Lord Lea of Crondall
My Lords, like the noble Lord, Lord Stoddart, I have not failed to notice the empty Benches opposite. I think that the view of members of the Conservative Party is that they do not need to worry about things such as this because they do not support the Maastricht treaty and perhaps do not support the present economic policy of the Government, although they have not been able to produce anybody to say so tonight.
Contrary to what the noble Lord, Lord Stoddart, said, I have no doubt that the Minister will have no difficulty at all in waving aside all the points made from this side with his Etonian insouciance. It is obviously tempting to have a vote, but I think, on balance, the fact is that for many years—10 or 15—we have been committed to this procedure and Labour Governments, as well as Conservative Governments, have thought it right to make a proper contribution to the debate about the EU stability and growth pact. That includes the input of the social partners, the trade unions and employers. That has been to the good.
On this occasion, I think that the future environment of the stability and growth pact is a big question, and I am surprised that the Treasury, with its excellent syntax and arithmetic, has not addressed any of the bigger issues which confront us at what I think is the end of one chapter in Europe and the opening of a new one.
I am referring, among other things, to the fact that we have a presidential election in France. As the Prime Minister said that he supports President Sarkozy, I will take this opportunity to give my maximum support to our comrade over the other side, François Hollande, and wish him well in 12 days’ time, or whatever it is. I shall sketch out a hypothetical scenario to which the Treasury should pay some attention. If and when President Hollande is in place and has his first meeting, as he will, with Chancellor Angela Merkel and they reach some agreements and then, one way or another, our Prime Minister meets him in Paris or London, what is he going to say? Is he going to say, “Bingo, the French and the Germans have reached a good agreement”? Have we nothing to contribute to their implicit complete relook at the stability and growth pact? Of course, there is not a word in this document, but I do not know whether any thinking is going on in the Treasury at all. I do not think that it has had any green light from Mr Osborne to do any such thinking, but it had better start in the next 10 days.
Where do we start from? The position of the incoming President Hollande, to take that hypothesis, would be—as he has said pretty consistently—not to undermine the fiscal pact but to but to add a big dimension of growth to the stability and growth pact. So this is the time to examine how on earth they would, without some highly innovative banking ideas, square the circle of getting out of a general slump. It is different from when the Maastricht treaty was created. We were there at its creation and there was a relatively good level of employment. At that phase of the economic cycle, with the underlying position at that stage, it was not unreasonable to have the figure of 3 per cent. By the way, there was a quite separate debate as to whether Greece should not have been treated much more stringently in inquiring about its position when it joined the euro. Allow me to say that that discussion has got totally mixed up with our discussion now, although in principle it is not central to it.
The circle is impossible to square unless we recognise that the arithmetic entails at least 4 per cent economic growth in Europe per annum for a few years to get the 2 per cent underlying growth of productive potential. That is to do with new technology, productivity, science and so on. I have no reason to believe that in Europe generally, one should put the underlying productive potential at less than 2 per cent growth per annum.
Lord De Mauley
My Lords, I am grateful to all noble Lords for their contributions and for the opportunity to do my best to reply. Following this debate, as I said earlier, the Government are required to report to the European Commission their assessment of the UK’s medium-term economic and budgetary position as they have done since the stability and growth pact came into operation.
There has been a large number of questions, so let me make a start on them. I cannot guarantee that I will have time—I have as much time as I like, but your Lordships may tire. I will do my best. The noble Lord, Lord Eatwell, suggests that the Government’s economic policy is not working. I acknowledged in my opening remarks that it is taking longer than anyone hoped to recover from the biggest debt crisis of our lifetime, even after the recent fall in unemployment. Over many years, this country has built up massive debts, which we are having to pay off. That is made much harder when so much of the rest of Europe is in recession, or heading into it. Fiscal consolidation is critical for the UK to maintain confidence and minimise risks. International institutions and credit rating agencies support the Government’s fiscal strategy, with, for example, the IMF recently saying that it had,
“concluded that the degree of fiscal consolidation for 2012 is right”.
That is why Standard & Poor’s recently reaffirmed the UK’s AAA credit rating. Reversing the historic rise in public debt will strengthen the UK’s medium-term growth prospects. A recent OECD study showed that high levels of debt damage growth but, with respect to the noble Lord, Lord Eatwell, considerable action is being taken to stimulate growth. We are supporting investment in energy. The Government will introduce a package of oil and gas tax measures to secure billions of pounds of additional investment in the UK continental shelf and publish a strategy for gas generation in the autumn of 2010, recognising that gas-fired electricity generation will continue to play a major role in UK energy supplies over the next decade and beyond.
We are supporting the housing market by providing an additional £150 million to the Get Britain Building fund to help to deliver more than 3,000 more homes. We are expanding private investment in infrastructure. The Government have supported the establishment of a new pension infrastructure platform, which will make the first wave of the initial £2 billion of investment infrastructure by early 2013. We are making rail investment. The Budget gives the go-ahead to Network Rail to deliver three elements of the northern hub proposal at a cost of £130 million, subject to a final value-for-money assessment.
We are supporting technology. The Government are setting an ambition to make the UK the technology hub of Europe. To help achieve this, we will extend mobile phone coverage to 60,000 rural homes and along at least 10 key roads by 2015 and will set up a new £100 million fund to support investment in major new university research facilities. I earlier referred to what we are doing in the area of ultrafast broadband.
We are reforming planning. We are supporting investment across the United Kingdom and are decentralising decision-making power away from central government. We have agreed to proposals by the Greater Manchester Combined Authority to pilot a new model that is set to unlock £1.2 billion of infrastructure investment.
The noble Lord, Lord Eatwell, suggested that the recession was the result of the Government’s policy of austerity. Our credible fiscal plan has helped us maintain our top international credit rating and has lowered interest rates to record lows, making, for example, family mortgages and business loans cheaper. In fact, the one thing that would make us lose our credit rating would be a deliberate decision to increase borrowing and debt. As the noble Lord knows well, we argue that spending more would be counterproductive. It would increase the deficit and put the UK’s status as a safe haven at risk. Cutting the deficit is critical to maintaining market confidence. That is why the Government’s deficit reduction plan is endorsed by the IMF, the OECD, the European Commission, the credit rating agencies and UK business organisations.
The noble Lord, Lord Eatwell, proposed that long-term bonds should be issued. There has been evidence of demand for gilts with long-term maturities against the backdrop of historically low long-term interest rates which provide a direct benefit to the economy and help keep interest payments lower for families, businesses and the taxpayer. In 2012-13, the Debt Management Office will consult on the case for issuing gilts with maturities significantly longer than those currently issued.
The noble Lord, Lord Skidelsky, referred to a line in the convergence programme document stating an expectation that we would avoid technical recession. The Government established the independent Office of Budget Responsibility, and it is the OBR that expects a recovery in underlying growth momentum over the year and that measured GDP growth will be broadly flat in the first half of 2012. That forecast is unchanged, as is the overall OBR forecast for 2012. The noble Lord made quite a number of suggestions. I refer to the Government’s focus on encouraging greater investment in infrastructure, increasing access to finance for SMEs and reforming tax policies to ensure that the UK is the best place to build finance and set up a business. I would like to consider what he said and write to him addressing the issues he raised.
The noble Baroness, Lady Bakewell, is no longer in her place, so I will leave her points.
The noble Lord, Lord Pearson, supported by the noble Lord, Lord Stoddart, asked why we are converging and who we are converging with. Those who are not members of the euro are legally obliged to submit convergence programmes to the European Commission. All the euro-outs, as they are known, with the exception of the UK and Denmark, are committed to join the single currency when they meet the relevant convergence criteria. As noble Lords well know, the UK has an explicit opt-out from joining the single currency under its protocol to the EU treaties, and the Government have made clear that we have no intention of joining or preparing to join the single currency in the lifetime of this Parliament, so we are not converging and we have no intention of doing so. However, it is a legal requirement under the Lisbon treaty to submit this document.
Lord Stoddart of Swindon
I am a little puzzled by what the noble Lord has just said. He appeared to say that we do not need to converge and that there is no requirement for us to do so. Is that what he said, or have I misunderstood him?
Lord De Mauley
There is no requirement to converge, but we none the less believe that we should honour our legal commitments.
I think the gist of what the noble Lord, Lord Pearson, said is that we should not be contributing to the EU budget. The UK remains a committed member of the European Union. However, it is unacceptable for the Commission to impose an inflation-busting budget increase for the 2013 EU budget when Governments across Europe are making difficult decisions on public spending, and we will be pressing for a more realistic budget that recognises the economic reality across Europe.
The noble Lord also suggested that there was no accountability for EU spending. For the 17th successive year, the European Court of Auditors is unable to grant an unqualified positive opinion on the EU accounts. That is entirely unacceptable. The UK Government demand concrete action by the Commission and member states to improve EU financial management.
I am just coming to the noble Lord, Lord Davies of Stamford, and perhaps he will let me have a go at his initial questions.
Lord Davies of Stamford
In response to what the noble Lord just said to the noble Lord, Lord Pearson, is it not the case that the auditors have consistently declined to sign off on those aspects of the accounts of the Union which involve money disbursed by member states—for example, structural funds and CAP funds? There have been a number of difficulties in a number of countries, but there has never been any doubt at all about the robustness of the accounts of the Commission and the institutions of the Community. Therefore, this issue is an indictment of a lack of federalism, not of too much feudalism. If the Commission were directly responsible for disbursing all these funds, there probably would be no problem. The problem is with member states that have had a lot of difficulty in keeping accounts properly.
Lord Pearson of Rannoch
Before the noble Lord rises to reply to that well known canard, it is, of course, true—is it not?—that a third of the budget is under the direct control of the European Commission. If the noble Lord, Lord Davies, would like to understand how it really works, instead of continuing to produce Europhile propaganda, I suggests he reads Brussels Laid Bare by Marta Andreasen. Then he will understand how the whole thing works, and we will no longer have these fruitless debates trying to pretend that this is not the fault of the corrupt octopus in Brussels but entirely the fault of the wicked nation states, which are also at fault, of course.
Lord Lea of Crondall
Is it not absolutely clear that the funds directly being disbursed in Brussels by the Brussels bureaucracy, as is often said, are the funds that have a clean bill of health in the auditing? It is the funds down to the nation states that are the reason why the auditors cannot sign off all these accounts. It is as simple as that.
Lord De Mauley
My Lords, I am not going to enter into this discussion any further.
The noble Lord, Lord Davies of Stamford, talked about the general anti-avoidance rule. I am not sure it is entirely relevant to this debate, but I can say that the Government will consult on the GAAR in summer 2012 with a view to bringing forward legislation in the Finance Bill 2013. A targeted GAAR is the right solution to tackle the persistent problem of artificial and abusive tax-avoidance schemes. I will take the noble Lord’s specific points back to the Treasury and write to him on them.
In an amusing speech, the noble Lord, Lord Myners, referred to, among other things, IMF and OECD support. The IMF and the OECD support the Government’s policy. The IMF’s Madame Christine Lagarde said that under the current circumstances the policy in place is the “right thing to do”, and the OECD Secretary-General said on our Budget 2012:
“The Budget announced today is another important step towards a sound fiscal position for the United Kingdom. The confirmation of the UK’s fiscal consolidation programme should keep bond yields low and support the recovery”.
Lord Myners
Will the Minister also acknowledge that the OECD has said that if the UK’s growth performance is lower than that forecast by the OBR, it will be necessary to revisit the fiscal strategy being pursued, and to ask whether that was contributing to the problem rather than solving it? In the interests of completeness, the Minister should give the full position of the OECD rather than a highly selective summary.
Lord De Mauley
Perhaps I can come back to that in a moment. The noble Lord, Lord Layard, suggested that there were optimistic assumptions in the OBR forecast, in particular on oil prices and risks from the euro area. The OBR says that,
“oil prices remain a significant uncertainty and the possibility of a further temporary spike in prices represents a risk to our forecast”.
Renewed upward pressure from the record oil prices in recent weeks is also recognised as a risk to the Bank of England’s forecast, most recently in the minutes of April’s MPC meeting.
The noble Lord, Lord Lea of Crondall, spoke about what might happen in the forthcoming French presidential election. He will appreciate that it is not for me to speculate on the outcome of the French election. Of course, the UK is not a party to the fiscal compact; it does not apply to us. The SGP was strengthened last year. Any proposal for fundamental change would require treaty change and that would require the consent of all 27 nations.
Lord Davies of Stamford
Can the noble Lord tell the House why, apparently on two occasions, the Prime Minister has refused to meet with Monsieur Hollande? Are his judgment and power of prediction in political matters as bad as in economic matters?
Lord De Mauley
My Lords, no, I cannot answer that question. The noble Lord, Lord Stoddart, asked what would be the repercussions if the House voted against this Motion this evening. The result would be that the Government would not have the statutory authority to submit the information that forms the basis of the convergence programme. The UK would therefore breach its obligations under the EU treaties, which could lead to infraction proceedings brought by the Commission under Article 258 of the treaty, for failure “to fulfil an obligation”. As I have said before, the Government take their legal obligations seriously.
It is worth saying that a strong Europe is in the UK’s economic interests. The Government want to contribute to a strong, prosperous Europe, while safeguarding our interests.
Lord Stoddart of Swindon
Can the Minister explain what would happen if Parliament decided that it did not want to obey this particular instruction or law under the treaty, and infraction proceedings took place? Is it possible for the United Kingdom to be fined? If it refused to pay the fine, what would then happen?
Lord De Mauley
My Lords, as I said, we would be in breach and subject to infraction proceedings and, yes, I am sure that we would be subject to a fine. I do not want to speculate on what would happen if we did not pay it.
There were a number of questions that I have been unable to answer, including the recent question posed by the noble Lord, Lord Davies. I will, of course, write to noble Lords with answers to those questions.
It is right that we share our budgetary and economic plans with the European Commission and other member states through the convergence programme and our national reform programme. This is a key step in the European semester process. These plans are provided after the Budget is presented to Parliament, and the Budget makes clear that Britain will earn its way in the world. It shows our commitment to fiscal consolidation and economic growth and, along with the OBR’s forecast, it forms the basis of the UK’s convergence programme.